By David E. Edsall
I recently had an experience in my legal practice that involved fraud. I did not suffer any loss, but wanted to warn other attorneys in our county of a situation to be aware of.
I was recently contacted by a real estate broker from a well known franchise that has referred me business in the past. She said she had a client of Japanese descent who was doing business out of Canada and that they were buying foreclosure property in California. The client wanted to work with an attorney to review the transactions, as well as a place to deposit funds in the attorney trust account to have U.S. funds available on a more expedient basis in order to close escrows.
I initially was not real suspicious of the situation since it was a referral from a known source. However, I felt uncomfortable with the idea of the client wanting to put the proceeds of the sales transaction in my trust account. I thereafter communicated with the client by email only, received a signed retainer agreement and received an initial deposit of a cashier’s check drawn on a Canadian bank for U.S. dollars in the amount of $350,000. The check was written to my attorney trust account. Based on a gut discomfort I opened a whole new trust account specifically for the benefit of this client and deposited the check.
I have a real good relationship with my bank (which would give me immediate use of the funds), however based on my gut feeling I asked them not to authorize the funds until they processed the check and they could guarantee to me that the funds were good. Since the check was drawn on a Canadian bank, it entered into their internal process called “Collections,” wherein they processed the check and told me the funds would probably not be available for three to four weeks.
Continue reading – September issue of CITATIONS Page 9