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Legal Malpractice Claim by Bank Against Attorney After Fraudulent Wire Fraud

A lawyer in Illinois has been sued by a bank after he was allegedly fraudulently duped by a fake client. He was tricked into wiring half-a-million dollars without sufficient proof that the client was authentic. Attorneys and law firms have become a major target for online scams. The “Nigerian prince” scams of years past have given way to fake clients or people impersonating an actual client, costing the attorney money or his good reputation.

Federal Insurance Company and First American Bank contend that the attorney, David Goodson, acted negligently, thereby committing legal malpractice, by failing to adequately vet two cashier’s checks that were purportedly drawn from First American Bank and sent to him from outside the United States.

Bank’s Allegations

The bank alleges that the attorney, Mr. Goodson, was negligent in how he handled the checks. Goodson received two checks, one valued at about $90,000 and another valued at $486,000; combined the checks valued approximately $570,000. The bank argues, in a court complaint in the federal court for the Northern District of Illinois in Chicago, that the checks were extremely suspicious because of several factors. First, the checks were delivered from Canada to the attorney’s office in Illinois. The check, however, was purportedly drawn from an Illinois company, First Aid Corporation, and not from a company in Canada.

Additionally, the attorney forwarded the value of the check to Japan before the checks were paid by First Aid Corporation, leaving the bank on the hook for the money sent to Japan in the scheme. The attorney was duped into wiring money to a fake client relying on a counterfeit check.

Fumiko Bandit

As it turns out, Mr. Goodson was the latest victim of the “Fumiko Bandit” scam, involving counterfeit check payments. In these types of scams, lawyers will be targeted by someone who appears to be either a current or prospective client, and who sends them a check as a settlement payment from a debtor who owes the alleged client money. After the money is sent to the attorney, the client then requests the funds, less the attorney’s fees, be sent to another account. Once the attorney forwards the money, the “client” is never heard from again. Also, the attorney (or his bank in this case) is then left on the hook because the client’s check will invariably bounce once the bank processes the initial payment.

Potential State Bar Discipline

Also, when the attorney accepts the check, the attorney triggers various state bar requirements. The attorney can be subject to bar discipline if the bar association finds that the attorney acted recklessly. The attorney can also suffer significant damage to his or her reputation for falling for such a scam.

Contact Experienced West Palm Beach Business Attorneys

For questions or concerns about potential issues with an attorney or allegations regarding legal malpractice, contact the attorneys at West Palm Beach based Pike & Lustig, LLP now for assistance.

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