Law Times

Law Times • sepTember 13, 2010 NEWS PAGE 5 BY MICHAEL McKIERNAN Law Times hen fraudsters target- ed Rachel Lammers, they left her with a bogus cheque, a voice mail mes- sage with a return phone num- ber, 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. The associate at Morelli Chert- kow LLP in Kamloops, B.C., thought her collection of evidence should put police well on the way to finding the attempted fraud- sters. 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 be- cause 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 separa- tion 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 dis- burse 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 varia- tions on the fraud targeting fam- ily 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, ab- solutely," he says. "We've gone from messages with spelling mis- takes and bad grammar to mes- sages 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 Pinning- ton. They provide specific infor- mation and show knowledge of the local jurisdiction. "They are getting to the point where they provide enough detail that it's believable," Untitled-3 1 www.lawtimesnews.com 9/8/10 10:52:43 AM Family law scam gets more sophisticated W Pinnington says. The most recent iteration saw lawyers receiving CIBC cheques from St. Christopher House in Toronto complete with water- marks and holograms. After that came an aggressive request from a woman to disburse the funds be- fore her errant husband changed his mind. Pinnington says one LawPRO claim is outstanding as a result of such frauds. In ad- dition, 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 frustrat- ing being unable to track them down, particularly when you're seeing a dozen of the exact mes- sage with the same e-mail address behind it," he says. "You know that it's the same person." In the meantime, while he ad- vises lawyers to inform their local the Internet protocol addresses of some e-mail addresses used in the scams, he found no consis- tent origin. He guesses the fraud- sters 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 'We've gone from messages with spelling mistakes and bad grammar to messages that are virtually perfect language- wise,' says Dan Pinnington. police service, he doesn't expect much to come of it. "Unfortu- nately, 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 action and seek an order compel- ling the [Internet service provid- er] to disclose, and by that time they're long gone," Pinnington says. "Practically speaking, track- ing these people down is difficult, if not impossible, and extraordi- narily costly." On the upside, Pinnington says the rash of e-mail scams has made many lawyers better at spotting red flags. "I get some sat- isfaction now from the fact that lawyers are now more aware of these types of frauds. From the re- sponses I'm seeing, they are more aware, more careful, and a bit more discerning. They realize cer- tified cheques are not guarantees of real funds in their accounts." Toronto lawyer Gene Colman was part of an early wave of law- yers targeted by the family law fraud. He contacted LawPRO once he'd realized his prospective client was bogus but never seri- ously considered calling police. "It would be nice if they could go after them, but I understand one has to do a cost-benefit anal- ysis 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 ex- tra caution when it comes to disbursing funds from their trust accounts and practis- ing 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 per- son really well. I don't know what funds they're relying on. If we do what the law soci- ety tells us to do, we won't be defrauded." LT WESTLAW® CANADA GIVES YOU ACCESS TO REAL PLEADINGS, MOTIONS AND FACTA MORE THAN JUST WORDS ON A FORM. TRUE INSIGHT. You get access to real court documents from selected leading cases. Link directly to the actual pleadings, motions and facta fi led with the courts. 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• Sophisticated Scams
• HST On Trial
• Focus On Human Rights Law