Almost Scammed: The Latest Nigerian Fraud on Lawyers

It almost goes without saying, but lawyers should go the extra mile to double check the background of potential clients who come to the firm solely via email. As we’ve learned from personal experience, there are con artists afoot who would use lawyers to perpetrate their, albeit clumsy, frauds. Recently, our firm was contacted twice by imposters posing as potential clients. In both cases, the introduction came via internet, unsolicited. The first time we quickly sniffed out the fraud; the second time we were almost suckered.

Consider potential new client “Peter Buma.” Mr. Buma contacted our law firm with a vague email about collecting a business loan for $350,000. He gave some details about the loan’s maturity, stated the debtor resided in Florida and that he needed an attorney. The email had a suspicious reek due its general lack of detail and slipshod grammar.  A quick Google search of “Peter Buma” revealed that “Mr. Buma” had been hard at work trying to scam lawyers around the country. His scheme had been found out, though, at least in Utah, and reported on by the papers. (See this article: http://www.ksl.com/?nid=148&sid=12787427).  I’m no great sleuth, but minimal due diligence revealed that this “Peter Buma” was a hoax. We declined to represent him.

A month or so later, a lawyer friend referred us a case that came to him via email. The potential new client was a “Ron Jostol” of “Mechanical Sales, Inc.” from Seattle. The email contained specific details about a $500,000 debt owed to Mechanical Sales by a fairly reputable Jacksonville supply company.  The substantial amount at issue raised an eyebrow but I’d heard of the Jacksonville company, so I undertook some due diligence regarding the potential new client. Mr. Jostol’s story seemed to check out as the records on file with the Washington Secretary of State reflected that “Ron Jostol” was indeed the president of a Mechanical Sales, Inc. I then located a website for the company. The contact information there matched the contact information in Mr. Jostol’s email. I called him on the number he provided – apparently his direct line – and we chatted for a few minutes. I noted that he spoke with an accent; he sounded African, which wasn’t what I expected but, then again, I didn’t presume to know how a “Mr. Jostol” should sound. I emailed him a representation agreement and agreed to his proposal of a staggered contingency fee of whatever we could collect prior to litigation, after which he would pay our hourly rate. He agreed to sign the agreement and to provide documents so we could draft a demand letter.

A few days later, “Mr. Jostol” sent me an amiable email, attaching the signed representation agreement, and informing me that, to our apparent good fortune, he had settled the matter himself for $398,000 but would nonetheless honor our contingency fee agreement. The next day we received a letter, from a “Shameeka Watkins” purportedly of the Jacksonville based debtor, enclosing a check from Citigroup in the amount of $398,000, payable to our firm.  Mr. Jostol had advised us to deposit the check into our trust account, retain the contingency owed to us, and remit to him the balance.

And that’s when the red flags really went up. I called the president of the Jacksonville based debtor company to inquire about the check and the purported author of the letter. As I expected, he knew nothing about the check, “Ron Jostol” or “Shameeka Watkins” and had never done business with Mechanical Sales of Seattle. I went to Mechanical Sales’ website and called their main line, rather than “Ron Jostol’s” direct line. I asked for Mr. Jostol and was directed to a gentleman with a pleasant Midwestern accent, with no trace of an African upbringing. I knew then we’d been duped. The real Mr. Jostol patiently explained that this was the third time he’d been contacted by a lawyer about a check and that he believed some Nigerians were impersonating him to perpetrate frauds on attorneys. He’d contacted the FBI and they were investigating the matter. I wrote the imposter “Ron Jostol” a letter terminating our representation and haven’t heard from him since.(Click here to read the termination letter.)

It doesn’t take a whole lot of sense to figure out that a $398,000 check might be phony when it comes on flimsy, see-through paper or to be curious as to why a debtor would cut your firm a check when your firm did no work on a matter. Most lawyers could figure this out. Nonetheless, this episode reflects the importance of doing your due diligence on a potential new client who solicits your services via email. If it seems too good to be true, it probably is.