Online Scams Becoming More Sophisticated

By now many of us have unfortunately either been the target of an online scam or know someone who has been scammed.  What at first may have seemed like an isolated incident here or there is now shockingly widespread.  Recent national events, specifically the fake girlfriend scandal involving Notre Dame football’s Manti Teo, have helped bring added media attention to the issue.

Recently a family friend of mine was scammed.  Her teenage grandson had posted on his Facebook wall that his parents were away and he was home alone.  A scammer read the post and figured out who the boy’s grandmother was.  The scammer then called the grandmother pretending to be the boy, and claimed he had headed up to Canada with his buddies to take advantage of the lower drinking age, had gotten arrested, and now needed money to get bailed out.  It wasn’t until after the money was long gone that the grandmother realized her grandson had never left home.

Stories like this are becoming more and more common nowadays.  Nevertheless, the common misconception amongst people is that it could never happen to them, either because they would never fall for a scam or that the odds of it happening to them are so slim. However, I was just speaking with a local property manager yesterday, who said that while he was performing work on a rental home a young couple showed up with a u-haul full of their possessions ready to move in.  A scammer had posted a fake craigslist rental ad and told the couple that someone would be there to give them a key to the house and then they should wire him the rent money and security deposit.  Just a few minutes after the couple arrived  the scammer texted the couple saying that the person with the key would be half an hour late, but that his bank closed in 10 minutes so they couple needed to wire him the money right then.  Luckily the property manager was able to inform the couple that it was a scam before they wired the money. 

A couple of weeks ago a realtor contacted my firm, Sayer Regan & Thayer, LLP, with a potential client ready to make an offer on a property in Newport.  The realtor had a completed purchase and sales agreement, a copy of the alleged buyer’s passport (he claimed to be a Chinese citizen) and a bank check for $100,000. Believing the check to be suspicious we contacted the issuing bank, which informed us that it was in fact a forgery. 

Just to see what would happen, we emailed the scammer and informed him that the check was bogus. To our surprise he emailed us back pretended to be indignant that his check had been denied. 

A few days later my firm received an email bulletin from a title insurance company warning about this exact scam and this scammer perpetrating them.  (fyi: the alias used the scammer was Han Hung)  The scam, had it been successful, would have worked like this:  The scammer contacts a realtor and sends the appropriate documents and the bank check.  The scammer then instructs the realtor to get an attorney and have the check deposited in the attorney’s client escrow account.  Then before the check clears (or rather before it is found to be fake), the scammer says he wants to back out of the deal and wants his funds wired back to him.  Since the alleged issuing bank has yet to alert the attorney that the check is a fake, these returned funds are taken from funds already held within the attorney’s client escrow account... and the scam is complete. 

Although my office and the realtor involved were able to catch the scam in time, this exact scenario was successfully perpetrated on another Rhode Island attorney this past year. 

The message here is clear:  The scammers are stepping up their game and upping the stakes.  No longer are they simply using Facebook or craigslist to go after the inexperienced or vulnerable, but now they are brazenly going after seasoned professionals.  So be sure to protect yourself at every step of the way, as there is no way of knowing what the next scam will be.

Contact: AThayer@srt-law.com  (401) 849-3040.

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