Lawyers across North America targeted in email scam partly run out of Greater Toronto, police say
Published on Thursday August 09, 2012
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Niamh Scallan
Staff Reporter
They may seem an unlikely group to be caught in a con, but lawyers from across North America have been bilked out of millions of dollars by sophisticated email scams, one of which investigators say was partly co-ordinated in the Greater Toronto region.
The email “collection” scam, which first surfaced around 2007, usually begins with an email from a potential “client” living abroad who asks for help collecting money from a divorce settlement, a real estate deal or other type of legal settlement.
A fraudster posing as the debtor agrees to pay the debt and sends the lawyer a counterfeit settlement cheque, which yet another fraudster (posing as a bank employee) verifies as authentic via telephone. The lawyer then cashes the cheque, takes a cut in fees for the services and wires the remaining funds to the client’s overseas account. By the time they realize the cheque is fake, the money is gone.
Court records show that con artists have been able to collect hundreds of thousands of dollars each time a lawyer is duped, and these types of scams have reportedly pilfered an estimated $70 million from law firms across the continent.
Next month, an alleged fraudster involved in one such scam — one that authorities believe accounts for about half the total $70 million in losses —will face a criminal trial in Pennsylvania. And Christy Fawcett, an assistant U.S. attorney assigned to the case, said more indictments are on the way for suspected co-conspirators, including those in the Greater Toronto Area.
Emmanuel Ekhator, a 41-year-old Nigerian national, was arrested in Nigeria and extradited to the United States to face several scam-related charges last summer. The charges followed a years-long, cross-border investigation dubbed “Operation Pacific Wire” involving the Federal Bureau of Investigation, the Toronto police financial crimes unit and other agencies.
Toronto police became involved in the operation in 2010, Det.-Sgt. Danny Bell confirmed.
U.S. prosecutors say Ekhator was living in the GTA during the time he helped co-ordinate the fraud ring that saw least 80 lawyers and law firms across North America swindled out of about $32 million. The ring also tried to scam another $100 million from 300 additional victims, prosecutors say.
Gene Goldenziel, a Pennsylvania-based personal injury lawyer who prosecutors allege was one of those targeted by Ekhator’s scam ring, said he first received an email from a potential client in 2010 requesting help to collect disability insurance.
The person claimed to be a woman injured while working at a Pennsylvania trucking company, he said. She said she was unable to meet in person because she had to move back to South Korea after the injury, but provided contact information and documentation that seemed to verify her injury and insurance policy with the company.
A cashier’s cheque for $400,000 soon arrived at the firm and “it seemed perfectly legitimate,” but Goldenziel said he “just felt peculiar” about the case and refused to deposit the cheque. He was then contacted by a U.S. postal inspector who said he had been the target of an Internet scam.
Ekhator, according to court documents, played a key role in the lucrative email scam targeting dozens of lawyers, relaying information between the “client” and the “debtor” and co-ordinating scam logistics with a global network of con artists in Canada, the U.S., the U.K., Nigeria, South Korea, Japan, China, Singapore and elsewhere.
“It was a pretty significant arrest,” said Fawcett.
An Ontario woman, Yvette Mathurin, was indicted alongside Ekhator in 2010 and 2011. Court documents allege she pretended to be a bank employee to validate counterfeit cheques.
Fawcett said Mathurin had not been extradited to the United States, but refused to elaborate on the reason. Mathurin could not be reached immediately.
Despite the crackdown on Ekhator’s alleged ring and repeated warnings from authorities and bar associations, lawyers’ scam-related complaints continue to filter in to both the Internet Crime Complaint Center, a U.S. agency partly run by the FBI, and the RCMP’s Canadian Anti-Fraud Centre.
FBI spokeswoman Jennifer Shearer said the U.S.-based complaint centre received 167 complaints from lawyers between 2011 and 2012, up from just 10 complaints in 2007.
Why does it keep happening?
Fawcett described the scam as both sophisticated and elaborate in its execution, one that mimics genuine interactions between clients and their lawyers, and involves a web of players worldwide working together to pull off each scam.
Many “clients” use actual company and property names in their emails, provide what appear to be authentic supporting documents and even include active phone numbers and contact information that lead back to other scammers involved who verify false information, according to court documents.
“The stories are usually quite plausible. It’s very top-quality counterfeiting . . . and it’s here, there, everywhere,” said Daniel Williams, a senior call centre manager at the RCMP’s Canadian Anti-Fraud Centre.
Williams also said the short period between when a lawyer wires the money to an overseas account and when they realize the cheque is a fake is usually enough time for the fraudsters to disappear with the money.
The anti-fraud centre receives “an awful lot of calls” from lawyers like Goldenziel who managed to avoid being scammed, said Williams, but added that the number of scammed lawyers is likely under-reported due to embarrassment or other reasons.
Other firms named in court documents as victims of Ekhator’s alleged scam ring did not respond to requests for comment.
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