The Commission is aware that at least one local law firm has received email correspondence which seeks representation on a legal matter as a front for the perpetration of a fraud against the firm. The activities requested to be undertaken by the legal firm potentially involve the laundering of stolen cheques through the transfer of funds to overseas bank accounts and/or fraud against the firm through the use of counterfeit cheques.
The common characteristics of this approach are as follows:
- An email is sent to a law firm allegedly from an individual seeking representation for a legal matter. One such example relates to the breach of a private loan agreement contract.
- As the relationship progresses, the firm receives a cheque, supposedly as settlement from the client’s debtor.
- After the cheque has been deposited in the firm’s account, the client instructs the law firm to transfer funds, less its fee, to a foreign bank account.
- The cheque received by the law firm transpires to be stolen or fraudulent.
Due to the non-face-to-face nature of business propositions received via e-mail, legal professionals should be alive to the risks of e-mails being used to commit fraud. In order to mitigate the potential exposure of law firms to such schemes, the Commission considers that where non-face-to-face business propositions are received via e-mail, legal professionals should consider the level of client due diligence documentation required, including any additional information or documentation, to satisfy themselves as to the details of the potential client.
If you require any further information or if you believe that you or one of your colleagues have received correspondence requesting that you engage in these types of activities, please contact the FIS on 714081.