A commercial equipment purchase scam recently circulating in the U.S. is now targeting Alberta lawyers.
An Alberta firm reported that a fraudster reached out to them via an email to a partner in the firm. The fraudster purported to be the owner of a large Florida construction company selling a 2015 Caterpillar bulldozer to a Calgary buyer for $876,000 (currency not specified) and requested the firm act as seller’s counsel. A term sheet was also provided.
Once the firm commenced client identification and verification procedures, a phony U.S. passport page of the purported company owner was provided. Although this document was reasonably sophisticated, further digging into the fake construction company – including Google searches and cross-checks – revealed several red flags.
The red flags included:
- the email address of the alleged owner of the fake company (a personal Gmail address) did not appear to be an email address that would be used by a large construction company;
- the Florida street address of the fake company did not exist;
- materials used in the fake company’s website were copied from materials contained on legitimate websites of other construction companies, which resulted in inconsistencies in the fake company’s website;
- the fake company’s name and logo on its website did not match its name and logo contained in the materials sent to the law firm;
- the name of a company representative listed in the term sheet was discovered to have appeared in a Texas attorney blog that contained recent warnings of a similar scam using some of the same facts (same equipment and purchase price, but different seller); and
- the term sheet contained drafting errors, including failing to refer to the buyer company using a full corporate name and referring to the bulldozer as a truck throughout.
This is a bad cheque scam that is presented as a legal matter requiring the service of a lawyer. These scams are designed to trick lawyers into wiring funds from their trust accounts to the seller after depositing a counterfeit cheque received as payment from the buyer (who is part of the fraud and often pretending to represent a legitimate company). After the lawyer sends the funds, the cheque is discovered to be bad, and the lawyer is left with a shortage in their trust account.
Another bad cheque scam involving an alleged divorce settlement – which has been reported in several Canadian provinces over the past several years – was recently received by an Alberta lawyer. In this scam, the fraudster purported to be a South Korean resident who wished to enforce a divorce settlement against her ex-spouse living in Alberta. Lawyers who replied to this scam in other jurisdictions have received counterfeit documents that include a fake ID, separation agreement and decree of divorce. The intent is to have the lawyer duped into sending funds to the fake client after receiving a fake cheque from the ex-spouse who is part of the fraud.
An explanation of typical bad cheque scams, including red flags and actions that can help firms protect themselves, can be found here
ALIA remains grateful to Alberta lawyers and firms for their continued reports of potentially fraudulent activities.