practicePRO > Practice aids > Fraud

Do you suspect you've been targeted by a fraud?

If you have been targeted by a fraud, please forward any of the emails you have received to [email protected]

If you are a LAWPRO insured, please call LAWPRO at 1-800-410-1013 (416-598-5899) if you suspect you are acting on a matter that appears like it might be a fraud. Working within confidentiality obligations imposed by the Rules of Professional Conduct, we will talk you through the common fraud scenarios we are seeing and help you spot red flags that may indicate you are being duped. This will help you ask appropriate questions of your client to determine if the matter is legitimate or not. In the event the matter you are acting is a fraud and there is a potential claim, we will work with you to prevent the fraud and minimize potential claims costs.

If you have been successfully duped, please immediately notify LAWPRO as there may be a claim against you. Instructions on how to report a claim are here.

Get the latest on fraud prevention from the Avoid a Claim blog.

LAWPRO fraud fact sheet

fraud fact sheet Fraud is a real and growing problem for all law firms and their staff. How can you protect yourself and your firm? Take some time to read this information on fraud. It explains the most common scenarios and how to spot them.
Fraud: How to avoid becoming its next victim
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Fraud update: More sophisticated cheque scams targeting lawyers

fraud fact sheet A special excerpt from the spring 2010 issue of LAWPRO Magazine

The calls and email keep on coming - we hear daily from lawyers who find themselves the targets of attempted frauds. This article highlights how fraudsters have changed their tactics, helps you recognize the red flags of fraud and outlines the steps lawyers can take to avoid being duped. PLUS: A detailed accounting of how fraudsters targeted one lawyer in March 2010 -- under the pretext of helping an orphanage.

Fraud: How you can avoid being its next victim:

Download a LAWPRO presentation on what frauds look like and how to avoid them. You can download and listen to the MP3 (audio) file and the program PowerPoint presentation.

Business Loan Fraud

In the first scenario, a new client introduced to you by a broker or a former client, is in the process of setting up a business and is borrowing money to buy inventory or materials. The loan documentation looks legitimate and the deal is processed. A certified cheque is deposited in the lawyer’s trust account. The lawyer draws a certified cheque on his/her trust account as directed. Several days after that cheque is cashed, the lawyer is advised that the deposit cheque is counterfeit and there is a shortfall in the trust account. Using this type of scheme, fraudsters successfully duped 10 lawyers over the 2007/2008 Christmas and New Year holiday time. They struck again just before the 2008 May long weekend and four more claims were reported and four more lawyers were left with shortfalls in their trust accounts. In May of 2009 LAWPRO alerted lawyers to yet another well organized scam that targeted at least twenty Ontario lawyers (Click here to read the e-bulletin).

The lesson? Be extra vigilant during periods of time when there are banking holidays. When banks are closed for a day and offices are short staffed, the fraudsters have a bit more time to complete their plans. For the full story behind this fraud see the article below.

Debt Collection Fraud

This type of fraud targets litigators. A new client will contact you seeking representation on a debt collection matter. As payment you will be promised a larger than usual portion of the recovered proceeds. All the documentation will look legitimate, and it will include copies of invoices, demand letters, etc. Phone calls to the creditor will be answered and messages returned. It will be the easiest debt collection you ever do. After just a single call or letter a certified cheque will be delivered to your firm. The cheque will look authentic and have all the normal security features. You will be asked to send the funds, minus legal fees, to an offshore account. And a few days after that you will get a call from your bank advising you that the cheque was counterfeit and that there is a shortfall in your account.

The following article examines both of these frauds in greater detail and explains how you may not be covered for these kinds of claims by your LAWPRO insurance coverage.
Fraud: A growing problem affecting all lawyers; plus Not all claims are covered (LAWPRO Magazine Summer 2008)

Employee Fraud

While value, title and identity fraud are now commonplace in commercial and real estate transactions, and lawyers tend to be much more alive to these issues when meeting with new clients, they may not appreciate that long-term employees are also responsible for millions of dollars of losses each year. The following article gives you some warning signs of a dishonest employee, recommends some internal controls you can implement and tells you how to screen prospective employees.
Fraud on the inside: What to do when partners, associates or staff commit fraud (LAWPRO Magazine Winter 2008/2009)
Fraud: The threat from within; plus Screening new staff during the hiring process (LAWPRO Magazine Summer 2008)

Real Estate Fraud

Five years after becoming a major concern to the real estate bar, claims related to real estate fraud continue to increase in both number of claims and the cost of those claims.
An examination of the Ontario government's real estate fraud legislation (LAWPRO Magazine Summer 2007)
• An in-depth description of the real estate practice coverage option now required of ALL Ontario lawyers wishing to practice real estate law.
Fighting Real Estate Fraud: Reference Materials from the Law Society of Upper Canada
Guarding against real estate fraud by Jerry Udell, Eli Udell and Catarina Galati (LAWPRO Magazine Winter 2007)
Communication issues underlie spike in real estate claims by Caron Wishart (LAWPRO Magazine Summer 2006)


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