June 22, 2011
From the web page of the Ohio Supreme Court:
The Supreme Court of Ohio issued a warning today about an Internet scam continuing to affect Ohio lawyers.
This latest email scam is similar to previous ones about which the Supreme Court has warned attorneys, according to Amy C. Stone, Assistant Disciplinary Counsel with the Office of Disciplinary Counsel.
“This is how it starts,” Stone said. “The phrase ‘to exert pressure on our delinquent customers in the USA’ in the email is signaling that the company – in this case Malaysia Steel – seeks debt collection services. The attorney ‘collects’ a bogus check from the delinquent customer, deposits it into her IOLTA account, keeps a ridiculously large agreed fee for herself (given the amount of work performed) and then wires the remainder of funds out of the IOLTA to Malaysia Steel. The actual wire recipient (who is not Malaysia Steel) receives the attorney’s ‘good’ IOLTA funds, (which end up being funds from the attorney’s other clients), while the attorney receives a returned bogus collection check which is charged back against her account.”
According to Stone, the banks are aware of the scam and in most of the recent incidents have been able to reverse the wire transfer. However, the attorney is stuck paying the difference in the exchange rate for the currency wired out of and coming back into the IOLTA.
The proposed client is typically an actual Asian company – although the scammers have no connection with the company. Also, sometimes the scammers use real lawyers’ names in the initial e-mail.
Attorneys are advised to exercise caution when approached by unknown persons seeking to enter into financial transactions involving foreign entities. To report a suspected online crime, contact the FBI at www.ic3.gov.
Each Ohio attorney – or the attorney’s employer – that holds the funds of clients that are nominal in amount or held for a short period of time must have an IOLTA. Interest from IOLTAs funds the Ohio Legal Assistance Foundation, which distributes these funds to the state’s legal aid societies to provide free legal aid to the poor.
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