Lawyers whose new-case inventory has diminished of late would ordinarily welcome an unexpected $1 million collection matter that comes through the door, or the office email inbox.
The message of the story below is that you should not let the promise of a lucrative new case that is too good to be true cloud your law-school-trained skepticism.
I received an email from an electronics company in Japan, with which I had no prior contact. The company was looking for a “Business/Commercial litigation lawyer” to handle claims against “a number of debtors in your jurisdiction.” I concluded that it certainly contacted the right person, with my 23 years of collection experience as a Family Part judge who has not litigated a business/commercial claim in more than 50 years. But it was a slow day, so I responded that I would be available to handle the “outstanding payment matters” in my jurisdiction.
The company offered to pay a $25,000 retainer to be applied against one-third of the amount collected — a “breach of contract” claim for $1.2 million against a company in Edison. Google confirmed that there was a company with that name, but not in Edison.
I advised my new “client” that I would handle the claim on receipt of the retainer and a copy of the invoice describing the items that were delivered. The next day, I received an itemized invoice totaling $1.2 million, including $31,300 in taxes and $18,700 in shipping costs.
Two days later, I received an email from my client informing me that I would receive a check from the Edison company “within a few days.”
I received a check in the amount of $650,000, delivered by a Canadian delivery company, EMS. The check was payable to my firm, drawn on an account at The Bank of Nova Scotia and it was “certifided.” A note appended to the memo portion of the check explained that the $500,000 balance would be paid by the end of September (seven days away). The arithmetic of these scammers was as good as their grammar — the balance due was $550,000.
The next day, I received an email from my client asking me to confirm receipt of a “certifided” check and instructing me to deposit it into the firm trust account, deduct $25,000 and wire $625,000 to a bank in Japan (detailed instructions were included — account number, wire number, etc.).
Keep in mind that at this point, seven days after the first email, I had no contact with the Edison company, yet I received a “certifided” check for $650,000 with a promise to pay the balance within seven days. I was impressed with my collection skills.
In an effort to slow down the process, I sent an email to my client, explaining that my firm “might” have a conflict of interest — a lawyer in the firm represented a company with a similar name in 2010. I explained that if there were a conflict, it could be waived by an officer of the debtor company.
The next day, I received an email from a “vice president” of the debtor company who waived any conflict. He was away on a business trip and he would call me when he returned in six days. This was the first direct contact I had with the debtor company, other than receipt of the “certifided” check.
Sensing that the scam was about to be successfully completed, my client advised me to proceed “ASAP” to deposit the check and to send a check to him for $625,000.
I replied to my client that the check would not be deposited until I met with the vice president of the Edison company on his return from his business trip. Within two hours, my client advised that he was “anoyed” (sic) and that I was “unprofessional.”
The final email I received from my client read as follows: “We are be looking forward to collect this payment. If you don’t have any conflict with company please go ahead and processed the check. They accept to pay us our money because they know we have involved your firm. Please get back to me we want this resolve today.”
I have heard nothing further from the “vice president.” I assume that he is still on a business trip. I still have the $650,000 “certifided” check; the $550,000 balance was never paid.
This scam has so many red flags that one might ask how a sophisticated lawyer could become enmeshed in its tentacles. I know of firms in New Jersey and elsewhere that have lost more than $200,000 in similar scams.
To paraphrase an old cliché, beware of anonymous emails promising gold at the end of a rainbow. •