By 
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 scammers who have already defrauded hundreds of attorneys and ruined many practices.
The story line can unfold in a number of ways, but conceptually it goes as follows. First, you receive an email with a simple question: do you handle breach of contract claims? Whether or not it does, but you’re willing to check it out and therefore say yes, you’ll receive a follow-up email with a brief description of the problem:
We appreciate you giving us the opportunity to discuss our case. We placed an order for some products from XXXXXX in August 2014 and the terms of the sales contract require us to pay 50% of the total cost of the ordered products before delivery and the balance after we have received the same products. However, after making the initial 50% deposit, we do not receive any product as required. The goods were to be delivered in September 2014. They were given more time to deliver the goods, which they still could not deliver. Therefore, we request a refund.
We made various efforts to get the initial deposit refunded, but to no avail. Therefore, we have decided to resort to legal means since there is an agreement prior to the transaction. Please find below the provider details for your conflict check.
The email also states that the client’s company is abroad and they might have difficulty coming due to the distance. You apply your due diligence and browse online looking to see if the foreign company and the local infringing company are real. Both exist and are usually serious companies with competent websites.
So far so good, standard buyer/seller situation, typical breach of contract: freshman year of law school. You reply that your fees are based on contingencies and that you will collect 33% of the recovery. It also says, of course you want to represent a foreign company and may market yourself in perspective as an international commercial litigation firm, that because the Client suffered losses as a result of the breach, you are also entitled to consequential damages. In addition, he asks for more documentation to evaluate the case and the losses.
The same day, the answer is in your email box:
As a result of our return request, they appealed to establish the payment in 2 installments within an interval of one month, of which the first installment was paid on November 20, 2014 in the amount of $497,500.00 after so much reminder and threat to involve a lawyer (paid receipt also attached). The balance was due in December 2014 and since then all our efforts to get the funds to remit have been unsuccessful. All details are contained in our enclosed correspondence with XXXXXX.
In summary;
Total amount of goods ordered: $2,540,891.00
Initial deposit made to XXXXXX: (ie 50% of the total amount): $1,270,445.00
Refunded amount (as of November 20, 2014): $497,500.00
Balance amount due to Kyoei Steel Ltd: $772,945.00
“Oh my gosh, this is the case I’ve been waiting for, my prayers have been answered: I’m going to pay off my loans and buy a new car; I’m also going to have a vacation in Hawaii and buy a Pomeranian for my daughter.” Not so fast, breathe. They asked for an advance, which you will send them. They also attached all the documentation: merchandise purchase contract, payment order, bank transfer request, correspondence with the local company, etc. You check everything carefully: the names, the dates, the products, the names of the banks: everything seems legitimate! Well, you write a standard retainer, probably read it in its entirety for the first time, and painstakingly attach it to the return email: inhale, exhale, send. Now you nervously wait as the CEO of the wealthy foreign company discusses the advance and gives you the green light.
You are looking at Salvador Dali’s famous painting “The Persistence of Memory” because time has slowed down drastically, and you haven’t slept for 3 days thinking about Pomerania. That nice sunny morning you’ll never forget, when you get an email from the foreign CEO congratulating you on a new hire and enclosing the last page of the advance with signature. You break down in tears, hug your partner and do the victory dance. For the first time in years, you say “hello” to the people at the front desk, smile, and air kiss the cleaning lady, leaving them in a daze for hours. You fly like a butterfly.
Congratulations of the day. Having reviewed your retainer agreement, we are unanimously satisfied with the details outlined therein and have decided to use your firm’s services to help pursue legal action against XXXXXX for breach of sales contract.
Please find the attached signed page of the fee agreement and the corresponding mailing form XXXXXX. 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 in the office, you send an email to the local offending company informing them that you are representing the foreign company in the breach of contract claim and that all communication between the companies must cease. The contract also provides for attorney fees for the winning party. Now you own them.
Start drafting a complaint and strategize for the pattern of litigation. But he can’t believe his eyes when he receives an email asking him not to file a lawsuit because XXXXXXX Company magically decided to comply after a year of negotiations. Hm, that’s definitely because you were hired. The offending company now promises to issue a partial payment in a few days:
Please give us one week to remit full payment. A partial payment of $489,650.00 would 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 damage our company’s reputation.
X-Day has arrived. You are having penne vodka with a Greek salad ordered from the local Italian restaurant, when the secretary brings you an envelope with the back address of the offending local company XXXXXX. Chills run down your body. With the handshake you open the envelope and… you faint, because you received the partial paycheck for the amount of $489,659.00 from the company XXXXXX and the letter promising to issue another check with the balance within a week.
You are lying on the floor with a goofy smile and looking at the ceiling. When his staff brings him back to consciousness, he begins to act quickly. First, he sends an email to the client; second, deposit the check into the trust account; third, place an order for a three-month-old Pomeranian and ask for a box of Cuban cigars.
You walk into a local bank like a boss. You don’t look at anyone. Everyone gets the vibe that you are the one. The branch manager runs up to you, shakes your hand, and asks if he can help you. He slowly takes the check out of his folder and hands it to the manager. You see how his pupils dilate, his breath hitches and sweat breaks out on his forehead. You know exactly what he thinks. He runs back to his office and from that moment chaos ensues in the bank. When the check is deposited, you walk out of the bank like a champion: the manager opens the door for you and everyone looks at you because they know: you have succeeded in your life.
Your client is delighted. They thank you and praise you, they want to hug you 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 he has responsibilities under other contracts. At this moment, you do not 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 early giving everyone two paid days off. Life is great!
Two days pass. He drives to his office listening to 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…
You are parked at the Shell gas station. You are looking straight at the passing cars and people. Seconds turned to minutes, minutes to days, days to eternity. Brutal realization slowly creeps into your mind.
Don’t you want this to happen to you? Here are some tips to spot the scam:
• Call the local business allegedly in violation and inquire about the subject of the contract.
• Look at the email address form you receive emails on: make sure it’s from the same server the company has its website on and not from @comcast.net; @XXX.edu and I like it.
• If the company is abroad, calculate the time difference and check the time you receive emails from them – see if the calculations match normal or maybe extended business hours in the country the customer is from.
• Be aware of the client’s competence in the legal field. The more experience the client has, the more suspicious you should be.
• Request a Skype call.
• Use common sense and listen to your instincts.