Specifics on William F. Boyland, Jr.'s Conviction on Bribery, Fraud, Extortion, Conspiracy, and Theft Charges

Sitting New York State Assemblyman William F. Boyland, Jr. was convicted by a jury at the federal courthouse in Brooklyn, New York, of 21 felony counts, including federal programs bribery, conspiracy to commit federal programs bribery, conspiracy to violate the Travel Act and commit federal programs bribery, extortion, extortion conspiracy, honest services wire fraud, conspiracy to commit honest services wire fraud, federal programs theft, and conspiracy to commit mail fraud. Boyland committed each of these offenses by corruptly exploiting his public position representing the 55th Assembly District in Brooklyn, which is composed of Ocean Hill, Brownsville, Bedford-Stuyvesant, Crown Heights, and Bushwick. Upon his convictions, Boyland was automatically expelled from the Assembly. When sentenced, Boyland faces prison terms of up to 20 years on each of the extortion, extortion conspiracy, honest services wire fraud, honest services wire fraud conspiracy, and mail fraud conspiracy counts; up to 10 years on each of the federal programs bribery and federal programs theft counts; and up to five years on each of the other conspiracy counts. Following his convictions, the Honorable Sandra L. Townes, who presided over the trial, ordered Boyland remanded into custody pending his sentencing on June 30, 2014. Boyland is also subject to up to at least $250,000 in fines on each of the counts of conviction, as well as criminal forfeiture and mandatory restitution.

The convictions were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office.

“The breadth and pervasiveness of the corruption exposed by this prosecution is staggering. Wherever there was an opportunity for William Boyland to corruptly line his own pockets, he took it. By soliciting bribes, by stealing funds intended to help the elderly, and by defrauding New York State and the Assembly, Boyland cravenly pursued his own interest at the expense of his constituents. In doing so, Boyland not only broke the law but broke faith with the public he was elected to serve. Today’s verdict ensures that Boyland will be held accountable for his corrupt actions,” stated United States Attorney Lynch. “When our elected officials engage in self-dealing, when they abdicate their responsibilities, when they succumb to greed, the average citizen pays for it dearly, and our democratic system suffers on so many levels. The verdict sends a clear message that we and our partners in the FBI will vigorously investigate and prosecute any public official who trades on a position of power to line his own pocket.” United States Attorney Lynch praised the hard work and dedication of the FBI agents who investigated the case and expressed her thanks to the New York State Comptroller’s Office, the New York State Office of the Aging, the Internal Revenue Service Criminal Investigation Division, the New York State Assembly Department of Finance, and the New York City Department of Investigation for their assistance with the investigation.

The evidence admitted at trial proved that, beginning in January 2007 and continuing through December 2011, Boyland engaged in four separate corrupt schemes, ranging from soliciting and accepting over $250,000 in bribe payments, to submitting false travel vouchers to New York State, to stealing state funds intended for the elderly:

Carnival Scheme

Boyland extorted and accepted over $14,000 in bribes in exchange for undertaking official action to benefit a carnival promoter (the “promoter”) and an undercover FBI agent. Specifically, in August 2010, Boyland met with the Promoter and this undercover FBI agent (UC1) on multiple occasions in New York City and discussed the desire of the promoter and UC1 to hold carnivals in Boyland’s district, for which they needed government approvals. During those meetings, Boyland requested payments in exchange for assisting the promoter and UC1, and the promoter and UC1 agreed. Boyland also described various ways in which the bribes could be disguised to hide their true purpose. After these meetings, Boyland directed his Assembly staff to assist the promoter and UC1 in their efforts to gain government approvals. Boyland then represented to the promoter and UC1 that he and his staff (i) engaged in discussions with government agencies to assist the Promoter in obtaining carnival-related leases and permits and (ii) arranged for a non-profit organization to sponsor the Promoter’s carnivals. Boyland also directed his staff to give the promoter letters of support, on Boyland’s Assembly letterhead, that the promoter needed in order to operate carnivals in Boyland’s district. In exchange, UC1 paid Boyland three separate bribes: $7,000 in cash; a $3,000 check with the “payee” line left blank; and $3,800 worth of money orders that were deposited into Boyland’s campaign bank account. As was shown to the jury during the trial, Boyland was captured on videotape personally accepting the $7,000 cash bribe at his district office.

Real Estate Scheme

Boyland also accepted the $7,000 cash bribe described above in exchange for undertaking official action to benefit UC1 and a second undercover FBI agent (UC2) in a purported real estate venture in Boyland’s district. Specifically, Boyland proposed a brazen scheme in which UC1 and UC2 would purchase the former St. Mary’s Hospital in Boyland’s district for $8 million, obtain state grant money to renovate the hospital, and resell it for $15 million to a non-profit organization that Boyland claimed to control. Boyland assured UC1 and UC2 that he would use his influence as an assemblyman to secure state grant money for the project and handle any zoning issues that arose. After accepting the $7,000 cash bribe described above, Boyland was later recorded demanding an additional $250,000 bribe payment from UC1 and UC2 as a condition of using his official position to realize the real estate scheme he had proposed.

Recordings of meetings in hotel rooms in Atlantic City and New York City where Boyland discussed the real estate scheme revealed that he recognized the scheme’s corrupt and illegal nature and sought to conceal his own involvement. At the meeting in the hotel in Atlantic City, Boyland stated, “I got a middle guy by the way...I gotta stay clean...I got a bag man....” Boyland further explained that he did not want to talk on the telephone and preferred in-person meetings: “I stopped talking on the phone a while ago...I’m just saying there is no real conversation that you can have...especially with what we’re talking about.”

At the meeting in the hotel room in New York City, Boyland reiterated that he wanted UC1 and UC2 to pay him a $250,000 bribe in exchange for the St. Mary’s Hospital project. When UC2 instead countered Boyland’s demand by offering to pay Boyland $5,000 for introductions to other government officials who would be involved in the project, Boyland rejected the counter-proposal, stating that the people whom Boyland could introduce to UC1 and UC2 were worth more than $5,000: “I’m not talking about $5,000 folks. I’m talking about...people that can actually get these projects done.”

False Voucher Scheme

From January 2007 to December 2011, Boyland stole New York State funds by submitting false New York State Assembly Member Travel Vouchers (vouchers). Boyland submitted over two hundred fraudulent vouchers where he falsely claimed to be in Albany on legislative business when he in fact was not in Albany, including days when Boyland was in New York City meeting with the undercover FBI agents and demanding $250,000 in bribes; days when he was in North Carolina and Virginia visiting with family and friends; and for days when he was in Istanbul, Turkey. In reliance on Boyland’s false Vouchers, New York State paid Boyland more than $70,000 in fraudulent mileage expense reimbursements and per diem payments.

Theft of State Funds for the Elderly

From July 2007 to September 2010, Boyland conspired to defraud New York State and the New York State Office of the Aging (NYSOA). Boyland, a member of the Assembly’s Committee on the Aging, steered $200,000 of New York State “member item” funds to a Brooklyn-based non-profit organization whose mission, as described on its website, was to provide a “social setting that enable[s] elderly individuals to maintain their independence and remain at home in the community.” Notwithstanding his certification, in writing to the NYSOA that these state funds would not be used for any partisan or political purpose, Boyland directed that the majority of these $200,000 in state funds be used for the benefit of Boyland and his political campaigns by paying for community events that promoted Boyland such as a Senior Lunch Cruise on the Spirit of New York Cruise Line, a fireworks show, and a large end of the summer picnic held at a park in his district, as well as goods that promoted Boyland, such as “Team Boyland” T-shirts distributed at those community events.

Tweet

Full Details of Grand Larceny Charges on Dewey & Leboeuf's Historic Collapse, Thousands Unemployed, Creditors Owed Hundreds of Millions

Manhattan District Attorney Cyrus R. Vance, Jr., today announced the indictments of Steven Davis, 60; Stephen DiCarmine, 57; Joel Sanders, 55; and Zachary Warren, 29. The first three defendants were, respectively, the chairman, the executive director, and the chief financial officer at the now-bankrupt law firm Dewey & LeBoeuf LLP; the fourth defendant was a client relations manager at the firm. The indictment alleges that the defendants defrauded and stole from the firm’s lenders, investors, and others. This case is the result of a nearly two-year investigation by the DA’s Major Economic Crimes Bureau and the Federal Bureau of Investigation. The Securities and Exchange Commission conducted its own parallel investigation and also is bringing charges today.

Davis, DiCarmine, and Sanders are charged with grand larceny in the first degree, scheme to defraud in the first degree, Martin Act securities fraud, falsifying business records in the first degree, and conspiracy in the fifth degree. Warren is charged in two indictments with scheme to defraud in the first degree, falsifying business records in the first degree, and conspiracy in the fifth degree.

“Fraud is not an acceptable accounting practice,” said District Attorney Vance. “The defendants are accused of concocting and overseeing a massive effort to cook the books at Dewey & LeBoeuf. Their wrongdoing contributed to the collapse of a prestigious international law firm, which forced thousands of people out of jobs and left creditors holding the bag on hundreds of millions of dollars owed to them. Those at the top of the firm directed employees to hide the firm’s true financial condition from creditors, investors, auditors, and even partners of the firm, until the scheme unraveled and resulted in the largest law firm bankruptcy in history. Seven of the firm’s employees have already pled guilty to crimes related to their roles in the scheme. My office’s Major Economic Crimes Bureau will continue to work with our law enforcement partners to prosecute accounting fraud and other economic crimes—regardless of the target company’s size or status.”

FBI Assistant Director in Charge George Venizelos said, “As alleged, rather than speaking openly with creditors about mounting debt and shrinking revenue, the defendants deliberately manipulated the firm’s financial statements. In the height of the crisis, the defendants used every trick in the book in an elaborate attempt to cover-up the increasingly dire situation. But as bad went to worse, the defendants doubled down and continued to exaggerate, manipulate, and downright lie in a vain attempt to right a sinking ship. It is incumbent on people and the institutions where they work to do the right thing, to follow the law—and not just when the FBI is watching.”

SEC Division of Enforcement Director Andrew J. Ceresney said, “Investors were led to believe they were purchasing bonds issued by a prestigious law firm that had weathered the financial crisis and was poised for growth. Dewey & LeBoeuf’s senior-most finance personnel used a grab bag of accounting gimmicks to create that illusion, and top executives green-lighted the decision to sell $150 million in bonds to investors as a desperate grasp for cash on the basis of blatantly falsified financial results.”

Background

Dewey & LeBoeuf LLP (Dewey), an international law firm headquartered in New York City, was formed in October 2007 through the combination of Dewey Ballantine LLP and LeBoeuf, Lamb, Greene, & MacRae LLP. At its height, approximately 1,300 partners and employees worked in Dewey’s Manhattan office, and nearly 3,000 partners and employees worked for the firm worldwide. In May 2012, Dewey collapsed, resulting in the largest law firm bankruptcy in history.

From Dewey’s formation through its bankruptcy, Davis was the firm’s chairman and later member of the office of the chair; Sanders was the firm’s chief financial officer; and DiCarmine was the firm’s executive director. Warren was the firm’s client relations manager in 2008 and 2009, when he left the firm.

From Dewey’s formation to early 2010, the firm had both term and revolving debt. By the end of 2008, Dewey had more than $100 million in term debt outstanding and available lines of credit of more than $130 million. In April 2010, Dewey refinanced its debt with a $150 million private placement with 13 insurance companies and a $100 million revolving line of credit with a syndicate of banks.

Overview of the Fraudulent Scheme

Dewey’s various credit agreements with financial institutions, and later the note purchase agreement governing the private placement, contained a cash flow covenant (the cash flow covenant) that required the firm to maintain a minimum year-end cash flow. Because of its poor financial performance, Dewey was unable to meet this covenant in 2008. The defendants and others at the firm feared that the failure to meet the cash flow covenant during the 2008 credit crisis could be harmful to Dewey.

According to the indictment and other documents filed in court, from approximately November 3, 2008 to approximately March 7, 2012, the defendants engaged in a scheme to defraud the firm’s lenders, and later investors, by, among other things, falsely reporting compliance with the cash flow covenant in 2008 and falsely reporting compliance with the cash flow covenant and other covenants in future years. To conceal and advance their fraudulent scheme, the defendants, directly and through others, lied to, withheld information from, and otherwise misled the firm’s auditors and partners, including members of the firm’s Executive Committee. Davis, DiCarmine, and Sanders are also alleged to have stolen nearly $200 million from 13 insurance companies and 2 financial institutions.

To make it appear that Dewey had complied with its covenant requirements, Davis, DiCarmine, and Sanders caused others at the firm to make tens of millions of dollars of fraudulent accounting entries beginning in late 2008. This conduct continued into 2012. Warren helped plan the fraudulent entries and took part in covering them up while he was at the firm.

In addition, at the direction of Davis, DiCarmine, and Sanders, individuals at the firm made intentional misrepresentations to investors and financial institutions involved in Dewey’s 2010 refinance. Among other things, they provided these investors and financial institutions with intentionally falsified financial statements; falsely represented that Dewey had complied with its prior debt covenants; and lied about Dewey’s policies for returning capital, its total outstanding debt, the compensation owed to partners, and about certain payments owed to retired partners.

The Fraudulent Methods

The indictment alleges that near the end of 2008, Sanders, Warren, and an individual working under Sanders’ direction identified fraudulent adjustments that could be made to Dewey’s accounting records falsely to demonstrate compliance with the cash flow covenant. These adjustments were memorialized in a document named the “master plan.” These fraudulent adjustments, as well as others, were employed from year-end 2008 to 2012 to make it appear that Dewey had either increased revenue, decreased expenses, or limited distributions to partners.

Some of the fraudulent adjustments and acts included the following, as described in the indictment:

• Reversing disbursement write-offs: From 2008 through 2011, individuals at the firm improperly reversed millions of dollars of write-offs of client disbursements, that is, costs the firm had incurred on behalf of clients, that Dewey had no intention or reasonable expectation of collecting. This fraudulently made it appear that expenses were lower than they actually were.
• Reclassifying disbursement payments: From 2008 through 2011, individuals at the firm improperly reclassified as fee payments millions of dollars of payments that had originally and properly been applied to client disbursements. When Sanders first devised this adjustment in late 2008, he told DiCarmine, “We came up with a big one. Reclass the disbursements.” DiCarmine responded, “You always do in the last hours. That’s why we get the extra 10 or 20 percent bonus.” This fraudulently made it appear that revenue was higher than it actually was.
• Reclassifying of counsel payments: From 2008 through 2011, individuals at the firm improperly reclassified as “equity partner compensation,” millions of dollars of compensation to “of counsel” lawyers. Historically, of counsel compensation had been treated as an expense in Dewey’s financial statements. This fraudulently made it appear that expenses were lower than they actually were.
• Reversing credit card write-offs: In 2008, Dewey initially and properly wrote off more than $2.4 million in charges from an American Express card associated with Sanders. The charges were not chargeable to clients. For year-end 2008, however, individuals at the firm fraudulently reversed the write-off and recorded the charges as an unbilled client disbursement receivable. Each subsequent year, they wrote this amount off during the year but fraudulently reversed the write-off at year-end. The amount remained on Dewey’s books as an unbilled client disbursement receivable at the time of the bankruptcy. This fraudulently made it appear that expenses were lower than they actually were.
• Reclassifying salaried partner expenses: In 2008, individuals at the firm improperly reclassified as equity partner compensation millions of dollars in compensation paid to and amortization of benefits related to two salaried, non-equity partners. Similar amounts had previously been treated as expenses on Dewey’s financial statements, so the reclassification had the effect of reducing the firm’s expenses. This fraudulently made it appear that expenses were lower than they actually were.
• Seeking backdated checks: During at least two year-ends from 2008 through 2011, individuals at the firm sought backdated checks from clients to post to the prior year. At the end of each year, they tried to hide the date on which checks had been received, so that Dewey’s auditors would not discover that December checks received in January, including backdated checks, were being posted to the prior year. Applying backdated checks to the prior year would fraudulently make it appear that revenue was higher than it actually was.
• Applying partner capital as fee revenue: For year-end 2009, more than $1 million that had been contributed by a partner to satisfy the firm’s requirement that partners contribute capital to the firm was applied as a fee payment for the client of a different partner. This amount was backed out of fees and applied to the partner’s capital account during 2010, but for year-end 2010, it was again fraudulently applied as a fee payment for the same client. This fraudulently made it appear that revenue was higher than it actually was.
• Applying loan repayments as revenue: In 2008, pursuant to Davis’s authorization, Dewey took on $2.4 million in bank loans that benefitted DiCarmine and Sanders. In early 2012, DiCarmine and Sanders repaid Dewey the final $1.2 million owed under the loans but structured the transaction so the loan repayment would fraudulently make it appear that revenue was higher than it actually was.

In addition to these and other adjustments, and as part of the scheme, individuals at Dewey intentionally failed to write off amounts that they knew should have been written off. For example, in 2011, a Dewey lawyer notified Sanders and DiCarmine that the firm had failed to write off millions of dollars in receivables on a client that was in receivership. The lawyer notified Sanders and DiCarmine that Dewey had represented to a federal district court judge that these amounts had been written off. Maintaining these invalid receivables, however, helped support Dewey’s borrowing base on its debt and the private placement. Sanders wrote to two employees, “We need to hide this [without] actually writing it off.”

The Cash Fow Covenant Misstatements

According to court documents, in February 2009, Dewey reported to its lenders that it had satisfied its cash flow covenant at year-end 2008 by a little more than $4 million. In fact, Dewey was able to achieve this result only by making tens of millions of dollars worth of fraudulent accounting entries, including, among others, some of those described above.

Dewey’s fortunes did not improve in future years. To misrepresent compliance with the cash flow covenant and other covenants, individuals at the firm, at the direction of Davis, DiCarmine, and Sanders, continued to make fraudulent accounting entries like those described above, as well as other fraudulent entries.

In fact, Dewey’s financial condition was so poor in 2009 that Davis, DiCarmine, and Sanders realized that, despite planning millions of dollars in fraudulent adjustments for that year, they would be unable to come up with enough fraudulent adjustments by year-end to show compliance with the cash flow covenant. As a result, Sanders sought a waiver of the covenant from the banks. The cash flow covenant floor was reduced, but the banks placed additional conditions on Dewey, which caused additional financial pressure.

When Dewey was unable to meet even the reduced cash flow covenant level in 2009, individuals at the firm, under the direction of Davis, DiCarmine, and Sanders, again made fraudulent adjustments to Dewey’s accounting records falsely to show compliance with this and another covenant. In 2010 and 2011, they continued making additional fraudulent adjustments falsely to show compliance with covenants, to reduce the impact of a covenant breach, and to hide Dewey’s true financial condition.

The April 2010 Private Placement and Revolving Line of Credit

In April 2010, Dewey refinanced its debt with a $150 million private placement of securities with insurance companies and a $100 million revolving line of credit with banks. To obtain this financing, individuals at the firm, including Davis, DiCarmine, Sanders, and others acting at their direction misrepresented Dewey’s financial condition to potential investors and lenders. Among other things, they provided potential investors and lenders with financial statements that falsely represented that the firm had complied with its covenants.

Additionally, as part of the private placement process, individuals at Dewey provided potential investors with an offering memorandum that contained numerous misstatements, including:

• The offering memorandum purported to disclose all Dewey’s debt. It did not.
• The offering memorandum stated, in substance, that departing partners received their capital during the three years following their departure from Dewey. But in fact, individuals at the firm fraudulently reclassified draws and distributions paid to departing partners during their final year of employment as returns of capital, in order to enable Dewey to appear to meet another of its covenants.
• The offering memorandum stated that “[c]lient disbursement receivables are written-off when deemed uncollectible.” In fact, as described above, millions of dollars in client disbursement receivables that had been deemed uncollectible and written-off during 2008 were fraudulently reversed and put back on Dewey’s balance sheet in order to reduce 2008 expenses. These amounts were budgeted to be written off in 2009 instead, but millions of dollars’ worth of client disbursement receivable write-offs were reversed for year-end 2009.

Defendant Information

Charges Steven Davis, dob May 17, 1953

• grand larceny in the first degree, a class B felony, 15 counts
• scheme to defraud in the first degree, a class E felony, one count
• securities fraud, NYS Martin Act, a class E felony, one count
• falsifying business records in the first degree, a class E felony, 47 counts
• conspiracy in the fifth degree, a class A misdemeanor, one count

Charges Stephen DiCarmine, dob October 19, 1956

• grand larceny in the first degree, a class B felony, 15 counts
• scheme to defraud in the first degree, a class E felony, one count
• securities fraud, NYS Martin Act, a class E felony, one count
• falsifying business records in the first degree, a class E felony, 44 counts
• conspiracy in the fifth degree, a class A misdemeanor, one count

Charges Joel Sanders, dob March 10, 1958

• grand larceny in the first degree, a class B felony, 15 counts
• scheme to defraud in the first degree, a class E felony, one count
• securities fraud, NYS Martin Act, a class E felony, one count
• falsifying business records in the first degree, a class E felony, 88 counts
• conspiracy in the fifth degree, a class A misdemeanor, one count

Charges Zachary Warren, dob October 5, 1984

• scheme to defraud in the first degree, a class E felony, one count
• falsifying business records in the first degree, a class E felony, six counts
• conspiracy in the fifth degree, a class A misdemeanor, one count

Tweet

Press and Political Elites Blistered by NRA's CEO Wayne LaPierre at @ACUConservative Conference

National Rifle Association CEO Wayne LaPierre delivered a blistering campaign-style speech Thursday, blaming the media and gun-control proponents for a decline in American economic standing and for threatening "God-given" gun rights.

"You feel it in your heart, you know it in your gut: Something has gone wrong" in America, LaPierre told a packed audience at the Conservative Political Action Conference. "Neighborhood streets once filled with skateboards ... and laughter in the air are now filled with silence."

LaPierre, who received the loudest applause of any speakers so far at the conference, put the blame squarely on the media and "political elites," saying that Americans feel their freedoms "slipping away."

Tweet

Evans #Easy Lewis Pleads Guilty to Drug-Related Murder

Evans Lewis, a/k/a “Easy,” 22, a resident of New Orleans, pleaded guilty to the murder of Gregory Keys and shooting of Kendrick Smothers during the course of a drug trafficking crime, announced U.S. Kenneth Allen Polite, Jr. In December 2011, Lewis and co-defendant Gregory Stewart, a/k/a “Rabbit,” a/k/a “D-Nice,” 22, were charged with participating in the homicide of Keys and the shooting of Smothers. Stewart’s trial is scheduled for July 14, 2014.

Lewis’s guilty plea resulted from a multi-year investigation of a heroin trafficking organization that operated in an area known as the “G-Strip” in New Orleans. The G-Strip is an area encompassing the 1300 block of Gallier Street in the Ninth Ward of New Orleans. Many of the members of the G-Strip were also affiliated with a gang known as the 39ers, an alliance of heroin traffickers in the Third and Ninth Wards of New Orleans. To date, 11 individuals related to the G-Strip organization have pleaded guilty to drug trafficking-related offenses.

According to Court records, on or about May 24, 2011, Lewis and Stewart knowingly carried and used two firearms, a 40-caliber semi-automatic handgun and a 7.62-caliber assault rifle, during and in relation to the commission of a drug trafficking crime and, in the course of this violation, caused the death of Keys through the use of a firearm.

Lewis will be sentenced on July 17, 2014, at 10:00 a.m. He faces a maximum penalty of life imprisonment, a $250,000 fine, and a period of supervised release of not more than five years.

Tweet

Transnational #OrganizedCrime Groups Target US-based Attorneys with Debt Collection Wire Fraud Scheme

Organized crime groups are using a sophisticated debt collection scheme to defraud attorneys in the United States, according to a recent FBI report.

The FBI has issued an advisory describing the scam and urging fraud victims to report crimes to a local FBI office or the Internet Crime Complaint Center.

The advisory says transnational organized crime (TOC) groups “hire unwitting attorneys to represent them for a fraudulent legal scenario, solicit them to deposit large counterfeit checks into their client trust accounts, and then persuade them to immediately wire the deposited amount to a foreign bank account controlled by members of the TOC group.”

According to the advisory, the FBI has received numerous complaints from victims nationwide. Members of the TOC group contacted the attorneys misrepresenting themselves as German of English companies in a loan dispute with a U.S. company. Initial contact is often made using email or social networking sites, such as LinkedIn.

“The perpetrator informs the victim that the foreign company is looking for a US-based attorney to help settle debt litigation with a US business,” the advisory states. “The reason for the alleged dispute may relate to defaulted loan repayment or an attempt to recoup losses for a purchase in which the item was never received.”

The perpetrator then informs the attorney that the U.S. business has contacted the foreign business and will immediately make a partial or full payment directly to the victim. The scammer then sends a fake cashier’s check to the lawyer.

The scammer directs the attorney to deposit the check into the lawyer’s trust account and take a retainer fee from the funds. If the attorney deposits the check, the bank may make funds available before the check fully clears.

The perpetrator will then send instructions to quickly wire the deposited money to a foreign bank account, such as accounts in Japan, hoping the transaction will take place before the check clears.

If the scam is successful, the bank will later notify the victimized attorney that the cashier’s check was counterfeit and the lawyer’s trust account suffers the loss.

Lawyers who encounter situations like this should verify a check’s authenticity from bank officials before depositing a check. Lawyers should also independently contact the U.S. business from which the perpetrator purports to be collecting money.

Tweet