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Family law scam gets more sophisticated

|Written By Michael McKiernan

When fraudsters targeted Rachel Lammers, they left her with a bogus cheque, a voice mail message with a return phone number, a photocopied passport, and a string of e-mail correspondence in what appears to be a copy of a scam affecting many Ontario family law practitioners.

‘We’ve gone from messages with spelling mistakes and bad grammar to messages that are virtually perfect language-wise,’ says Dan Pinnington.

The associate at Morelli Chertkow LLP in Kamloops, B.C., thought her collection of evidence should put police well on the way to finding the attempted fraudsters. She didn’t like the answer she got, however, when she called the RCMP’s fraud department in Ottawa to report the scheme.  

“They were like, ‘Yeah, yeah, yeah. We hear this all the time,’” Lammers says. “They said they wouldn’t do anything with it because we weren’t going to send them any money, so we hadn’t been defrauded.”

The officer told her she could drop the cheque off at her local RCMP detachment if she liked but says she’d rather let it gather dust at the bottom of her own filing cabinet as opposed to the Mounties’.

“It’s disappointing, especially because there’s always lots of police resources to convict petty crimes. We can prosecute people for stealing packs of gum but we can’t go after big-time fraudsters.”

The scam involved a woman who claimed her husband owed her $1 million as part of a separation agreement.

After Lammers attempted to verify the woman’s identity, the husband eventually contacted her by mail and phone to say his wife had been in touch and he would send a cheque to the office.

By the time the fake $200,000 cheque arrived in the mail, Lammers was on to the scheme. The idea was that she would cash the cheque and disburse the funds to the wife before the bank raised the alarm.

“It looked very real,” Lammers says.

“It was printed on a form with a tear-off bottom, like a pay stub. It’s a pretty good fake.”

It’s a ruse that Dan Pinnington is quick to recognize. As director of PracticePRO, LawPRO’s risk management arm, he sees variations on the fraud targeting family law practitioners in the e-mails he gets from lawyers every day.

He notes the scheme is getting more sophisticated all the time.

“They are getting better, absolutely,” he says. “We’ve gone from messages with spelling mistakes and bad grammar to messages that are virtually perfect language-wise.

They use all the right lingo.”

Fraudsters have created more convincing back stories and are willing to engage with lawyers by e-mail or phone to prove they’re legitimate, according to Pinnington. They provide specific information and show knowledge of the local jurisdiction.

“They are getting to the point where they provide enough detail that it’s believable,”

Pinnington says.

The most recent iteration saw lawyers receiving CIBC cheques from St. Christopher House in Toronto complete with watermarks and holograms. After that came an aggressive request from a woman to disburse the funds before her errant husband changed his mind.

Pinnington says one LawPRO claim is outstanding as a result of such frauds. In addition, at least three more lawyers deposited the St.

Christopher cheques without disbursing the funds before the bank noticed they were fakes.

While the fraudsters hone their game, Pinnington finds himself catching up with the scams by sending out e-mail blasts detailing the latest advance.

“It is frustrating being unable to track them down, particularly when you’re seeing a dozen of the exact message with the same e-mail address behind it,” he says. “You know that it’s the same person.”

In the meantime, while he advises lawyers to inform their local police service, he doesn’t expect much to come of it. “Unfortunately, these types of matters tend not to be high priority on their side,” he says.

Pinnington knows what a difficult task the police face from his own attempts to trace e-mails. When he tracked down the Internet protocol addresses of some e-mail addresses used in the scams, he found no consistent origin.

He guesses the fraudsters use software that disguises their real location. Even if he can determine the location, finding a name to go with the address can be even more difficult.

“You have to bring a John Doe action and seek an order compelling the [Internet service provider] to disclose, and by that time they’re long gone,” Pinnington says. “Practically speaking, tracking these people down is difficult, if not impossible, and extraordinarily costly.”

On the upside, Pinnington says the rash of e-mail scams has made many lawyers better at spotting red flags. “I get some satisfaction now from the fact that lawyers are now more aware of these types of frauds.

From the responses I’m seeing, they are more aware, more careful, and a bit more discerning. They realize certified cheques are not guarantees of real funds in their accounts.”

Toronto lawyer Gene Colman was part of an early wave of lawyers targeted by the family law fraud. He contacted LawPRO once he’d realized his prospective client was bogus but never seriously considered calling police.

“It would be nice if they could go after them, but I understand one has to do a cost-benefit analysis because, practically speaking, resources are tight these days,” Colman says.

“Would you rather protect lawyers or go after rapists and murderers?”

Colman also notes lawyers should be able to look after themselves by exercising extra caution when it comes to disbursing funds from their trust accounts and practising more defensively.

“If I get a solicitor’s trust cheque, I’m not going to pay it out right away even if I know the person really well. I don’t know what funds they’re relying on. If we do what the law society tells us to do, we won’t be

defrauded.”

  • It\'s Happeningin Alberta Too

    Joseph A. Caruk
    I have been approached with almost an identical scheme here in Alberta. Not only that but the response from the RCMP was alarmingly similar despite the fact that I had a phone number that worked and supposed passport identification to follow up with; apparently not enough money was involved. I fear that these kinds of schemes are going to catch someone because even following all the safeguards you can there is still a risk that the lack of desire on the part of the police to follow up on these frauds leaves the perpetrators free to keep trying.
  • Prioritizing cops\' work

    Karen Selick
    Gene Colman is correct to say that we need to prioritize the use of police officers' time. Unfortunately, we seem to waste inordinate amounts of it chasing people for "crimes" that have no victims--such as using marijuana or worse yet, raw milk.
  • Prioritizing Cops Work

    Brian L. Fish
    Karen That's the second time in as many weeks I've fully agreed with you. It seems more and more cops are doing that. Could it be that it's so easy to do
  • Be careful...

    jfbushell@hotmail.com
    FYI
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