Are you a solo practitioner? Do you have a small or medium law firm? This article is for you to protect your assets, business, and reputation from scam artists who have already defrauded hundreds of attorneys and ruined many practices.
The story line can unfold in a number of ways, but conceptually it is as follows. First, you receive an email with a simple question: Do you handle breach of contract claims? Whether or not you do, but are willing to investigate and therefore say yes, you will receive a follow-up email with a short description of the issue:
We appreciate your giving us the opportunity to discuss our case. We placed an order for some XXXXXX products in August 2014 and the terms of the sales contract require that we pay 50% of the total cost of the ordered products before delivery and the balance after we have received the same products. However, after we made the initial 50% deposit, we did not receive any products as required. The merchandise should be delivered in September 2014. They were given more time to deliver the merchandise, which they still could not fulfill. Therefore, we request a refund.
We have made several efforts to get the initial deposit refunded, but to no avail. Therefore, we have decided to resort to legal means as there is a pre-transaction agreement. Please find below provider details for your dispute check.
The email also indicates that the client’s company is abroad and that they might have a difficult time getting there due to the distance. Do your due diligence and browse online to see if the offending foreign company and local company are real. They both exist and are generally serious companies with competent websites.
So far everything is fine, standard situation between buyer and seller, typical breach of contract: first year of law school. He responds that his rates are based on contingencies and that he will charge 33% of the recovery. He also says of course that he wants to represent a foreign company and can promote himself in perspective as an international commercial litigation firm, that because the Client suffered losses as a result of the breach, he is also entitled to compensation for damages and damages. In addition, he asks them for more documentation to assess the case and the losses.
The same day, the answer is in your email box:
After our refund request, they appealed to set the payment in 2 installments within a month’s interval, of which the first installment was paid on November 20, 2014 in the amount of $ 497,500.00 after both reminders and threats of involve an attorney. (receipt of payment also attached). The balance was due in December 2014 and since then, all of our efforts to get them to remit funds have been unsuccessful. All details are in our attached correspondence with XXXXXX.
Total amount of goods ordered: $ 2,540,891.00
Initial deposit made to XXXXXX: (that is, 50% of the total amount): $ 1,270,445.00
Amount refunded (as of November 20, 2014): $ 497,500.00
Amount of balance owed to Kyoei Steel Ltd: $ 772,945.00
“Oh my God, this is the case I was waiting for, my prayers have been answered: I will pay off my loans and buy a new car; I will also have a vacation in Hawaii and buy a Pomeranian for my daughter.” . “Not so fast, encouragement. They asked for an advance, which I will send. They also attached all the documentation: contract for the sale of goods, payment order, request for bank remittances, correspondence with the local company, etc. Check everything carefully: the names, dates, merchandise, name of banks – everything looks legit! Okay, write a standard retainer that will probably read it in its entirety for the first time and lovingly attach it to the reply email – inhale, exhale Now, wait nervously when the CEO of the wealthy foreign company reviews the advance and gives the green light.
You are looking at Salvador Dalí’s famous painting “The Persistence of Memory” because time has drastically slowed down and you have not slept for 3 days thinking about Pomeranian. That sunny and pleasant morning that you will never forget, when you receive an email from the foreign CEO where they congratulate you on a new hire and attach the last page of the advance with the signature. You break down in tears, hug your spouse, and do the victory dance. For the first time in years, you say “hello” to the people at the front desk, smile, and blow the cleaning lady an air kiss that leaves them stunned for hours. You fly like a butterfly.
Praise of the day. Having reviewed your advance contract, we are unanimously satisfied with the details outlined therein and have decided to employ the services of your company to help bring legal action against XXXXXX for breach of the contract of sale.
Find the attached signed rate agreement page and the corresponding XXXXXX mailing form. We have informed our debtor XXXXXX of our desire to engage their law firm to take legal action against them. Therefore, we received a response from them. Any corresponding mail received from XXXXXX will be forwarded to your attention.
Once at the office, he e-mails the local non-compliance company informing them that he represents the foreign company in the breach of contract claim and that all communication between the companies must cease. The contract also provides for attorney’s fees to the winning party. Now you own them.
Start writing a complaint and create a strategy for the litigation pattern. But you can’t believe what you see when you get an email asking not to file a lawsuit because the XXXXXXX company magically decided to comply after a year of negotiations. Hm, that’s definitely because you were hired. The defaulting company has now promised to issue a partial payment in a few days:
We kindly ask you to give us a week to make the full payment. A partial payment of $ 489,650.00 will be remitted between today and Wednesday. We assure you that you will have your funds / Damages caused by our company in less than seven business days to avoid taking the case to court, as this will make a dent in the reputation of our company.
Day X has come. You are having penne vodka with an ordered Greek salad at the local Italian restaurant, when the secretary brings you an envelope with the back address of the local business XXXXXX. The chills run down your body. With shaking hands you open the envelope and … you faint, because you received the check for partial payment in the amount of $ 489,659.00 from company XXXXXX and the letter promising to write another check with the balance within a week.
You are lying on the floor with a silly smile and staring at the ceiling. When his staff brings him back to consciousness, he begins to act quickly. First, send an email to the customer; second, deposit the check in the trust account; Third, order a three-month-old Pomeranian and request a box of Cuban cigars.
You walk into a local bank like a boss. You don’t look at anyone. Everyone feels the vibe that you are the one. The branch manager runs up to you, shakes your hand, and asks if he can help you. You slowly take the check out of your folder and hand it over to the administrator. You see how his pupils dilate, his breath falls and sweat comes out of his forehead. You know exactly what he thinks. He runs back to his office and from this minute chaos settles in the bank. When the check is deposited, you leave the bank like a champion: the manager opens the door for you and everyone looks at you because they know: you have been successful in your life.
Your customer is delighted. They thank you and praise you, they want to hug and kiss you, but they can’t because they are abroad. The client asks you to send the funds (minus the 33% contingency of $ 163,219.67) within 24 hours as they have responsibilities under other contracts. Right now, you don’t see, hear, speak, or understand. He carefully subtracts his contingency from the total and quickly transfers $ 326,439.33 to the foreign bank and closes the office earlier, giving everyone two paid days off. Life is great!
Two days pass. He drives into his office hearing the latest news that Donald Trump has just filed a lawsuit against the dark forces requesting the issuance of the injunction, when his personal banker calls him and tells him that the check he sent a few days ago bounced …
He’s parked at the Shell gas station. You’re staring straight at the passing of cars and people. The seconds turned into minutes, the minutes into days, the days into eternity. Brutal realization slowly takes over your mind.
Don’t you want this to happen to you? Here are some tips to determine the scam:
• Call the allegedly infringing local business and investigate the matter of the contract.
• Look at the email address form on which you receive emails: make sure it is from the same server where the company has its website and not from @ comcast.net; @ XXX.edu and I like it.
• If the company is abroad, calculate the time difference and keep track of the time you receive the emails from them: see if the calculations coincide with the normal or perhaps extended hours of the business day in the country from where is the customer.
• Know the client’s competence in the legal field. The more experience the customer has, the more suspicious they should be.
• Request a Skype call.
• Use common sense and listen to your guts.