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LAW OFFICE MANAGEMENT lawyers can become unwittingly caught up in sophisticated fraud schemes, in spite of all the warnings that have been circulating within the profession over the past several years. However, the fraudulent transactions alleged in this case occurred several years ago, when the Calgary real estate market was red- hot and prices were continually soaring. Since then, the markets have cooled off, properties change hands less frequently, and prices are relatively stable, so, as Pinnington points out, flip frauds are less viable and therefore less common. So, fraudsters have moved on and figured out ways of targeting lawyers directly by trying to con them into depositing bad cheques in their trust accounts and paying out good money before the cheques bounce. "The magic that makes these frauds work is giv- ing the lawyer a worthless piece of paper and having the lawyer write a cheque against his trust account," says Pinnington, who notes these scams come in two flavours. One type involves fake business loans for equipment purchases. Typically, a new client will hire a lawyer to incor- porate a business and then return to the lawyer a few weeks later saying he has negotiated a loan and wants to use the money to purchase some equipment. He asks the lawyer to deposit the loan into a trust account and then advance the money to a third party for the equipment purchase. The other common fiddle that fraud- sters are currently trying to pull on thousands of lawyers involves a phoney debt collection — sometimes a bad business debt, but most often on a family law spousal support payment. The method is similar to the loan scam. A new client approaches the lawyer ask- ing for help in collecting a debt and the lawyer discovers the debt is surprisingly easy to collect. A cheque is deposited and the client pressures the lawyer to release the funds immediately, most commonly, under some pretext, to an offshore bank account. Some fraudsters bombard the legal profession with e-mails soliciting help with a loan or collection. Pinnington says he and other lawyers at LawPRO have received such e-mails themselves from con artists who are evidently unaware of whom they are targeting. However, either by design or simply because the con artists are sending the messages to everyone, some of these messages will land on the desk of law- yers who routinely handle loans, debt collection, or spousal support matters. In such cases, it is not always easy to spot the fraud. "Everyone is vulnerable, it's a question of the right file coming across your desk," says Pinnington. Deborah Gillis, risk and practice management adviser at the Lawyers' Insurance Association of Nova Scotia, says it's a measure of the sophistication some of these frauds have achieved that many attempted scams target lawyers who specialize in collaborative family law — people who are always dealing with situations where ex-spouses will Everything you need Together we have all the tools The TitlePLUS® your clients from title risks.1 you, through our legal services coverage2 Program works with you to help protect With the right tools we assist , by reducing the inconvenience of dealing with a loss as the result of an error or omission in your real estate transactions. To ensure your clients get the most comprehensive coverage in one policy, take a look at the TitlePLUS Program, your Bar-related® real estate partner! PROTECTION AS GOOD AS IT GETS 1-800-410-1013 2 Excluding OwnerEXPRESS® policies and Québec policies. ®TitlePLUS, the TitlePLUS logo, OwnerEXPRESS, LAWPRO and Assurance LAWPRO are registered trademarks of Lawyers' Professional Indemnity Company. ®BAR-RELATED Mark is a registered Mark of North American Bar Related Title Insurers used by LAWPRO under License. titleplus.ca 1 Please refer to the policy for full details, including actual terms and conditions. The TitlePLUS policy is underwritten by Lawyers' Professional Indemnity Company (LAWPRO®)/Assurance LAWPRO®. Assurance LAWPRO is the registered name used in Québec by Lawyers' Professional Indemnity Company. Contact LAWPRO for brokers in Saskatchewan, Manitoba, Alberta and Québec. 20 A UGUST 2010 www. C ANADIAN Law ye rmag.com Untitled-4 1 3/17/09 10:36:52 AM