Scam Alert: LSBA Warns Members about New Scam

The LSBA is continuing its mission to alert members about scams targeting lawyers and law firms. Recently, an LSBA member recounted the following incident in hopes of preventing similar situations.

I received an email from Scott Turner on 11/20/19 inquiring into whether I could draft a commercial lease agreement. He claims he received my contact information from the online bar directory in the email; however, when I spoke with him, he stated that he received it from a client that recommended me.

I responded to the inquiry and let him know that we could draft a commercial lease agreement, but needed to run a conflict check and requested that he send me the names of the parties involved.

He responded on 11/26/19 that the parties involved were [oil and gas company] and "Company A." I ran a check on both of the companies. [Oil and gas company] was confirmed as registered with the LA Secretary of State; however, Texas requires an online check. I therefore reviewed the websites of both companies to verify same. Both appeared to be legitimate companies, so we ran a conflict check on the companies to verify whether there was a conflict. As there were no conflicts, I sent an email to client and notified of no conflict and that I would send him an engagement letter when I returned to the office.

On 12/2/19, I prepared and sent the engagement letter to Scott Turner.

On 12/4/19, Scott Turner responded that he had received the engagement letter.

On 12/6/19, Scott Turner sent an email confirming the engagement, requesting additional services on amending leases, extending leases, review of supporting documents for the lease, and holding offer and security deposits if the need were to arise, and confirming that he spoke with a broker for [oil and gas company] who was to send a letter of intent before any additional work could be done. He stated that the broker would be sending the LOI and a holding deposit to our client trust account as the attorney handling the transaction within a week. I responded with the firm trust account information for the retainer fee to be sent and the instructions for sending a check for the retainer. I also requested the information on the contact person for the LOI and needing to meet with the client prior to the finalization of the LOI to determine what terms had been agreed.

On 12/13/19, Scott Turner sent the signed retainer agreement. I responded to the email thanking him and asking if he received the LOI. He responded that he had not and that he was hoping to receive it by Monday.

On 12/16/19, I received an email from Scott Turner that an LOI should be received shortly as the broker notified him yesterday that they sent the offer to my office. He requested for me to send copies of the offer upon receipt so we could discuss the next steps. He also mentioned that an emailed copy of the LOI would be sent. I acknowledged the email and let Scott know that I would let him know when the LOI was received. In less than an hour, I received an email from Lou Yong, CFO of River Stone Investment Brokerage, with an LOI for proposed subsea drilling rig lease. The email indicated that an inspection on the equipment would need to occur before working on the lease and mentioned an authorization to deduct retainer fees from $199,900 deposit that was being mailed to my office. I notified the client that I had received an email LOI but no deposit, but that I needed additional information from the client as to what was agreed on the lease to determine if what was written in the LOI complied with the verbal agreement. I also notified the client not to sign the LOI until we had an opportunity to discuss any issues. Shortly thereafter, a FedEx was received at the office. The contents of the package were a letter from the broker and an alleged certified check from Wells Fargo Bank for $199,900. I notified the client that the check had been received but that I would not deposit the funds until we had an opportunity to speak about the LOI and what was intended and/or agreed and could not issue any funds to anyone unless or until the funds from the check cleared. The client responded that the LOI looked serious and he would review the agreement carefully so we could discuss and requested a meeting for the next day.

After the check was received, I brought it to [colleagues] to see if the check was even legitimate as it did not appear proper. We checked with our Regions Bank person who could not verify whether the check was proper or not. Wells Fargo was called. After an hour on the phone with Wells Fargo, it was confirmed with 95% certainty that the check was fraudulent.

On 12/17/19, in preparation of the call with the client as to the LOI, I contacted [oil and gas company]. The [company representative] informed me that they have no current lease pending for equipment lease with Company A, that there were absolutely no pending transactions for $3 million, and that [oil and gas company] does only land-based drilling so there is no need for offshore or subsea equipment. She further stated that a similar occurrence happened earlier this year that she had to handle with the FBI. She requested my name and number so she could make a note of the issue. I then contacted the Texas Secretary of State and it was confirmed that there was no registered Texas company or out-of-state company doing business as Company A registered with them. Scott Turner tried calling me when I was on the phone and sent me an email that he would be available to call me after lunch. I responded with my availability and he called at 1:45 p.m. I recorded the call as I was not certain whether the client was a victim or participant in the fraud. He informed me that he had a couple of issues with the LOI that needed to be corrected, that the broker for [oil and gas company] reached out to him, that this was common, and that Company A was a Texas registered company. When I began to inform him that some of the items and requirements in the LOI did not make sense, the phone went dead. When I tried to call back, the number said it was disconnected.

Further research on the name of Scott Turner reflects a Canadian business person with warrants for his arrest in Turks & Caicos Islands for suspected fraud. Although it is unknown whether this is the same person, what is known is that the FedEx package that was sent and received from the alleged broker for this deal with the fraudulent certified check is from Canada.

Here are tips to protect yourself from falling victim to scams:

Don’t trust the display name. Check the email address in the “From” header — if it looks suspicious, it may not be legitimate. Even if an email has convincing branding and language, it does not mean that it is authentic.

Beware of urgent or threatening language. Invoking a sense of urgency or fear is a common spoofing tactic. If you receive a message asking for urgent financial assistance, you should pause and proceed with caution.

Call to confirm. If in doubt about an email that appears to be from a legitimate person, call or text the person yourself instead of replying to the message. Do this even if the message says the sender cannot be reached by phone for some reason.

Warn others. If you find the email is a hoax and comes from someone you know personally, immediately contact the original sender to let him or her know. Suggest that the sender send an email to this effect.

Do not respond. If you receive phishing email, do not respond. Responding to emails like this confirms your email account as an active one and can result in you getting more spam.

Do not accept facts as face value without more research and due diligence as to the people and matters involved.

Beware of clients you have never personally met or clients who need immediate transfer of funds. Don’t be tempted by receipt of an overpayment of an advance deposit or a fee that appears “too good to be true.”

The LSBA, the Office of Disciplinary Counsel and law enforcement agencies encourage LSBA members to exercise caution and perform due diligence before accepting new cases and performing financial transactions involving the lawyer’s trust account.

LSBA News Resources

Louisiana Bar Journal Bar Briefs
Louisiana State Bar Association
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New Orleans, LA 70130
(800) 421-LSBA(5722) / (504) 566-1600