Canadian Lawyer

12 M A Y 2 0 1 7 w w w . C A N A D I A N L a w y e r m a g . c o m \ AT L A N T I C \ C E N T R A L \ P R A I R I E S \ W E S T REGIONAL WRAP-UP B usiness email compromise scams are growing in Can- ada and the U.S. and a recent incident saw a Victoria lawyer lose $1 million as he followed what he thought were client email instructions to transfer funds overseas. The story isn't unique, says Vancouver's Mike Knapp, cyber consultant and partner in Incrementa Consulting Inc., as email scams thrive. "It is increasing dramatically," he says. At a recent seminar for business CEOs and CFOs, he asked how many had been victims of BEC scams. "There were five; two had not lost money but three had," he says. The U.S. Federal Bureau of Investigation and the Internet Crime Complaint Centre track BEC scams. "BEC scam continues to grow, evolve, and target business- es of all sizes. Since January 2015, there has been a 1,300% increase in identified exposed losses," it said in a public service announcement. Tracking losses by victims in the U.S. and other countries, the figure has risen to more than $3 billion. Victoria Detective Sgt. Derek Tolmie of the financial crimes division says the $1-million loss by the Victoria real estate lawyer related to one single different keystroke in the email address. Police are not disclosing the name of the lawyer as the loss was handled through an insurance claim. The case involved the sale of a Victoria house with the owners, who had limited English skills, in Taiwan. As a result, the daughter in Hong Kong spear- headed the communications, with the parents copied. "The lawyer did everything right," says Tolmie. There was a three-month closing period. "During that time, he did his due diligence. He had the contract couriered over, he got photos and passport identification on the sellers and verified they were the owners." As negotiations were nearing the closing date, things went off rail. "Scammers somehow inserted themselves into the email correspondence and represented the lawyer to the seller and the seller to the lawyer." Tolmie says he is not aware of how it was done, but the addresses that went to each party had only a single different keystroke from the original addresses. There was only one slight indication that something was wrong. Tolmie says originally the seller's instructions had requested the lawyer trans- fer sales proceeds to a Chinese bank. At closing, an email came to send funds to a Hong Kong bank. When the lawyer attempted via email to confirm the different bank, the reply from the scammers posing as sellers stated they had simply changed their minds. By the time the mistake was discovered and police were contacted, the funds were transferred to a number of other accounts internationally. Tolmie cites another case with the conventional CEO and CFO spoofing email addresses. An accountant for a law firm received an email from the lawyer asking for $93,000 to be deposited to a bank account in England. Fortunately, the accountant called the lawyer to confirm and the deception was discovered. Again, it tracked back to a single key stroke in the altered lawyer's email address. LAWYER FALLS PREY TO $1-MILLION EMAIL SCAM referred clients facing urgent issues to law- yers in the communities where they found themselves. Gillespie says the fire took a personal toll. "I wasn't feeling like I really had the emotional energy to help other people with their crises." Gillespie returned to Fort McMurray toward the end of June and is now back practising. Conor Clark, who comes from Fort McMurray, was three-quarters of the way through his articles when the fire hit. As he raced home that day, he could see a huge smoke cloud. "I was able to get to the house and get some items. I put them in the car, but then I decided it was wiser to leave than keep removing things." Shortly afterward, the house, a rental, and most everything in it was ashes. Clark spent the next little while in Edmonton with family where he found a lot of support. He calls the loss of the house "unpleasant, but it wasn't something to dwell on. You have to come to terms with what happened." Clark says and he and his wife had to ask them- selves "what do you truly value?" One thing he truly valued was complet- ing his articles. So he quickly threw himself back into working. On Sept. 2, almost exactly four months after the wildfire tore through the town and through his life, he was called to the bar at the Fort McMurray courthouse. Of his articles and the hectic last few months before he became a lawyer he is somewhat philosophical. "I guess you could say my articles were a trial by fire." Don Scott is a long-time lawyer and resident of Fort McMurray. While he is active in the law, he is also a former MLA for the district and is planning to run as mayor this fall. Scott says that May 3, 2016 is a day he will not soon forget. He remem- bers calling the staff together, telling every- one to go home and closing the office door shortly after 1 pm. At home, his wife and children started to load the car. Out of his back door he could see "a huge black cloud coming at us. It was menacing. Unbeliev- able." Scott and the family scrambled to collect things of sentimental or practical value. He recalls driving out of town and seeing flames and destruction. Like a lot of other Fort Mac lawyers, Scott got enormous assistance from law firms in Edmonton, Calgary and else- where. Within two weeks, the firm was back in operation out of temporary quar- ters at the Bennett Jones office in Edmon- ton. "We were getting lots of calls, especial- ly about insurance." He says the firm "got back [to Fort McMurray] by early July." Scott would rather not be handling a single fire-related insurance claim, but he says there has been a surge in work. "That's why we became lawyers, to help people." As for Gillespie, the family lawyer, she, too, is busy. The fire, she says, has been espe- cially stressful on people who were already in crisis with personal issues. As for Clark, the now young associate in his firm, he remains optimistic about the future. "There is opportunity here," he says. "Opportunity for me and my family." — GEOFF ELLWAND Lawyers rebuild a year after Fort Mac fires Continued from page 11

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