Con men targeted at least two Charleston-area law firms in a week's time in a counterfeit check scam that cost one firm $390,000, according to the U.S. Secret Service.
The Secret Service is warning law firms to be on the lookout for the con artists, who pose as potential clients in a bid to siphon off the firms' funds, said John Kenney, resident agent in charge of the Secret Service in Charleston.
Of the two firms that contacted the Secret Service, one lost money and the other got wise to the scam before the thieves could fleece it, Kenney said. He would not identify the firms involved.
Kenney said the scam works this way:
Someone calls or e-mails a law firm and inquires about hiring a lawyer to go after a company that owes them money. The "client" promises to provide the firm with a retainer to take the case.
Before the retainer is paid or any work is done, the client calls back and claims the debtor company has agreed to settle the matter to avoid the embarrassment and hassle of going to court. The company also has agreed to pay the law firm's retainer, the client says.
Two checks arrive at the law firm, one for the retainer and one for the money supposedly owed to the client. The lawyers are instructed to deposit the checks and wire the client's share of funds to an out-of-state or off-shore bank account. Because the law firms are good customers, the banks generally clear the checks right away and send the money along.
Only after the money is sent does the bank discover the checks are counterfeit.
"Once the wire goes overseas, the money is gone," Kenney said. "The bank then turns to the law firm and the law firm is on the hook."
Kenney said the bank accounts in the two recent cases were traced to Japan and Canada, but the trail could well extend from there. Investigators suspect the scammers are based in Nigeria or some part of West Africa, well-known hubs for check-cashing scams, he said.
Anyone encountering this scam is asked to call the Secret Service at 388-0305.
Reach Glenn Smith at 937-5556 or firstname.lastname@example.org.