Many of us are familiar with the classic Nigerian prince scam. You get an email from an individual claiming to be a Nigerian prince who needs to get money out of the country. The sum ranges from thousands of dollars to tens of millions of dollars. Wow, what luck that you happened to get emailed by a Nigerian prince! The prince explains that to get money out of the country, you will need to wire him money to aid in the fees that are required to move money internationally. Sure. With eyes on the forty-million-dollar prize, you wire the prince anywhere from $1,000—500,000, and the prince never sends the money. He may even be so bold as to follow up requesting more money, claiming the funds are “stuck” in transit.
For those of you doing your due diligence (and if you are being promised $40 million USD, you probably should), any quick Google search of “Nigerian prince” would show you the first result as being related to a scam.
The scam, commonly referred to as an “advance fee fraud” or 419 scam (in reference to the Nigerian criminal code statute the scam violates), is pop culture at this point. It has been referenced on the TV shows 30 Rock, Futurama, and The Office.
There is even a subculture of scam-baiters dedicated to wasting the time, money, and pride of 419 scammers in an effort to deter them from scamming others. Some scam-baiters will humiliate the scammers into taking embarrassing photos or videos of themselves, and the scammers will hesitantly comply, because they think there is a payoff in the end. In one legendary scam-baiting operation, an individual overseas ordered thousands of dollars worth of “Anus”-brand computers from a business in the United States. The business owner packed about 200 lbs. of computer parts into UPS boxes and shipped them to the scammer’s address in the UK. The scam-baiter also declared a high value for the shipment, forcing the scammer to spend money to get the box of useless junk delivered.
The 419 Scam on Lawyers
As much as the 419 scam has entered pop culture, it is still apparently unfamiliar to an exceptionally large group of people, lawyers included. Variations of the 419 scam specifically target lawyers and have proven effective in the past. Unfortunately, if you are duped by a 419 scam, you may not only be out of money, you may be suspended from the practice of law.
In Iowa, during the course of representing a client in a criminal case, an attorney found out that his client was the beneficiary of a large bequest from a long lost Nigerian cousin. If the client could pay over $150,000 in taxes, including an “anti-terrorism certificate,” the client would receive $18.8 million. The lawyer told his client he would help facilitate the transaction in exchange for a percentage of the client’s inheritance. The lawyer then solicited other clients, getting them to provide him with a loan to pay the Nigerian tax bill in exchange for a piece of the lawyer’s cut of the inheritance.
After paying his fees, the lawyer was told that funds were being shipped in trunks filled with hundred-dollar bills from Nigeria to Madrid and would be required to pay an additional €25,600 in “logistics charges.” The client-beneficiary traveled to Madrid, but for undisclosed reasons was unable to take possession of the trunks.
The lawyer violated, among other rules, the rule on competence. The disciplinary board noted a cursory Google search of “anti-terrorism certificate” would have suggested the lawyer was being scammed. Moreover, the lawyer never bothered to do his due diligence to determine whether the Nigerian representatives were actually affiliated with any legitimate bank, as they had suggested. At the end of the day, after being scammed of thousands of dollars from several clients, the lawyer was suspended from the practice of law.
It should be though. The critical thinking skills necessary to practice law should make lawyers more difficult targets.
Variants of the 419 Scam
For lawyers, the 419 scam is not always in the form of a traditional Nigerian prince offering money; it can be harder to spot. In one common variant, the lawyer receives an email or website contact form submission requesting help to collect money owed by another party. The client may be from a foreign jurisdiction, but the opposing party happens to reside in the lawyer’s jurisdiction. The lawyer sends a demand letter, and the other side agrees to a settlement. The opposing party sends a check, the lawyer deposits the money into the trust account, and cuts the client a check from the firm’s operating account minus legal fees. Easy money for the lawyer, right? The client and the opposing party abscond with the lawyer’s money, and the lawyer realizes he or she has been scammed days or weeks later when the check provided by the opposing party is proved to be fraudulent.
Now, I know what you may be thinking: “I would never turn over money to a client until the check clears. That’s common sense.” But, in the United States, banks will make the funds available from a deposited check within a few business days, whether or not the check has cleared. It can take up to a month for a bank to determine that a foreign check is a forgery. Under pressure from the client demanding their money, the lawyer cuts the client a check sooner.
Although it may seem like common sense, here are some important red flags that pop up in 419 scams involving lawyers:
- Non-personal email from the prospective client using terminology relatively uncommon for lawyers in the States (e.g. “Dear counselor” or “Dear barrister/solicitor”).
- Email is sent to many undisclosed recipients, sometimes multiple people at the same firm.
- Poor grammar.
- Case type is debt collection, but you are not necessarily a debt collection lawyer.
- There is no justifiable reason for how the client found you. Saying they found you via the Internet is likely bogus if you do not practice debt collection, or if you have a fairly limited Internet presence — how many people typically find your firm for debt collection cases currently? Probably none. Also, if they are referred from a friend or local bar association, which one?
- One party resides out of the country.
If you do choose to take on these potential cases, how can you avoid a 419 scam?
- If any of the above red flags pop up, be suspicious.
- DO YOUR DUE DILIGENCE. You are a lawyer.
- Do a cursory Google search of the client and the opposing party. Scammer emails are often posted on online forums in full. You may see your exact email. When searching for the client or opposing party by name, include keywords like “scam” and “419.”
- If the client is requesting your services on behalf of their business, look up the business, call the office number provided on their website, and ask about the email to make sure this is a valid request.
- If you do go through with this case, wait for the check to clear, not just for funds to appear in your account. Do not succumb to client pressure to get them a check. It is not unethical to wait for a check to clear before cutting a check for the client.
- Relatively quick and easy resolution (e.g., you send a demand letter, get a settlement offer right away).
- Once the check from opposing party is deposited into the lawyer’s trust account, the client promptly wants their funds, minus legal fees, sent to an overseas bank account. Expect the client to put on the pressure.
At the end of the day, you need to be smart. Not every scammer follows the same Nigerian prince formula. Lawyers are specific targets for scammers. Always do your due diligence and do not let clients pressure you into sending them funds if a check has not cleared.
Featured image: “Businessman takes the bait to the hook” from Shutterstock.