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The Great Lawyer E-mail Scam

If you think lawyers are too savvy to fall prey to an e-mail scam, think again. One lawyer who fell victim to it estimates that the scam has bilked lawyers out of more than $1 million. That lawyer is now being sued by Wachovia Bank for the $190,000 he wired from his escrow account to a Korean bank on behalf of what he believed was a company in Taiwan. The lawyer, Gregory Bartko, who practices securities law in Atlanta, reveals how it all went down in an interview with J. Craig Williams on this week's episode of the legal-affairs podcast Lawyer2Lawyer. Also on the program is a lawyer and former FBI agent who almost fell prey to the scam before a series of red flags stopped him from going through with it, John P. Donohue, senior counsel at Thorp Reed & Armstrong in Philadelphia. Donohue tells Williams that his subsequent investigation revealed a number of other lawyers who have been victims of this.

The show's topic is particularly timely. Just this week, the New York State Bar Association e-mailed an alert to members warning them to watch out for the scam (as republished by lennyesq). Gary Munneke, chair of the NYSBA's Law Practice Management Committee, wrote, "Although the allure of new business can be enticing in these economic times, the need to remain vigilant to possible fraudulent practices does not diminish."

Bartko's plight was detailed in an Aug. 27 story in the Fulton County Daily Report. Wachovia is suing him in federal court for the money he wired from his escrow account and it reported him to the State Bar of Georgia. The article gives this summary of how the scam works:

An overseas company contacts a U.S. lawyer by e-mail and retains that attorney as a settlement agent to collect a debt from a U.S. company. The U.S. company sends a settlement check to the lawyer, who deposits it into his trust account and then wires the settlement amount, minus his fee, to the "client." But the settlement check is counterfeit, and the lawyer loses the money he wired abroad.

As scams do, this one is morphing into different forms, so lawyers need to be on the alert. The July issue of the California Bar Journal provides more details in its report on lawyers in that state who were targeted. Do yourself a favor -- take some time today to listen to this podcast and read these articles.

Posted by Robert J. Ambrogi on September 12, 2008 at 11:33 AM | Permalink | Comments (0)


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