Keep Your Money By Being Aware of Frauds Aimed at Law Firms

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In this edition we have written a case study about frauds that target law firms and an article about checking account holds.


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Thomas M. Rucke, President
Cadfael Investigative Group, Inc.

Case Study: Frauds That Target Law Firms

A short time ago I was contacted by an attorney in San Jose, CA. He told me that he received a check from a new client in the amount of $215,000. Part of this money was a retainer. The majority was to be used by the attorney as good faith or interest money toward the purchase of real estate. The real estate market had turned sour and cash was king. A self-described investor was interested in finding distressed properties to be purchased on the cheap, and the attorney agreed to help. A short time later, this same attorney related that he received a communication from this investor who now advised that the market was worse than imagined and he was no longer interested in California real estate. He requested that the attorney keep $15,000 and wire the balance back to him. The attorney was suspicious and asked me what he should do.


I suggested that before wiring $200,000 back to the client he should verify the sender's identity and the bank that issued the check. He disagreed with my suspicion and my suggestion. He said that the check was from outside the U.S. and when he deposited the money in his trust fund account the bank had placed a hold on the funds due to the origin and amount of the check. "But," he continued, "the bank has released its hold, indicating that the check is valid." He said he felt pressured to return the money to his potential client, and he did so.


About a year later he called to advise me that... Read More  


Checking Account Hold


What happens when you deposit a check? What do those words that the bank employees use really mean? I'm talking about words like, "hold on your funds", "available balance", "P.E.G." and more. These terms become very relevant when you receive a check from a client and you need to be certain that the check is good before writing checks on your account.


Anytime you deposit a large check you may be informed by the teller that a hold has been placed on your account. The purpose of this hold is to allow your bank to validate the authenticity of the check, so that you don't withdraw the newly deposited funds immediately and leave the bank liable. The bank places a hold on the deposited funds until the funds actually arrive. Or do they? It is common for holds to last from three to ten days or more.


Typically, a bank will credit an account to show the deposited funds as part of the account holder's overall balance. However, the account holder will not be able to withdraw these funds until the hold is lifted. Generally the length of the hold is determined by several factors: 

Click here to read the factors


 June 2012
In This Issue
Case Study: Frauds That Target Law Firms
Checking Account Hold
Fraud Tip
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Fraud Tip

Carefully scrutinize unsolicited email/phone calls from unfamiliar individuals and entities requesting your services, particularly if the phone call originates outside the U.S.

Take steps to independently verify the information provided by your "Client". Call Cadfael @ (763) 694-6086 for assistance.


Be suspicious of a solicitation that offers a relatively large fee or commission for little or no work or one that appears outside of your usual practice areas.


Educate your staff to be alert for the warning signs of such schemes. Cadfael offers training classes to help you and your staff know the warning signs of fraud.


Periodically review law enforcement websites for information on current fraud schemes.


If you have doubts concerning the validity of a check you receive, contact the institution on which the check is drawn to request confirmation.


When undertaking representation of an existing client, be cognizant of unusual facts or circumstances.


If you suspect fraud or are troubled by an offer, call us with the information. We can help you identify if it is a fraud. Remember, if something appears too good to be true, it usually is.

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"If it looks too good to be true, it probably is."

About Us
At Cadfael Investigative Group, Inc. we help our clients' identify and eradicate fraud. We provide them with the power of knowledge. We bring added information and insight to clarify and understand challenges they face.

Our investigative focus is on fraud identification and prevention in the legal and business communities of Minneapolis, MN. Our focus in the area of our expertise allows our experienced investigators to utilize their skills and gives our clients good value for their investment and an economic advantage. We provide our clients information they need to protect their clients and business. We also provide them with new services and capabilities that free up their time so they can focus on what they do best.

Our clients benefit by improved employee loyalty, increased profitability, and less time and resources spent managing internal losses. Learn more...

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Minneapolis, MN 55391
Office: (763) 694-6086
Fax: (763) 577-0343

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