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Ethics


burden. Diligence in monitoring our business accounts is crucial, but the practicality of running a busy business and a hectic trial schedule cannot be underestimated. As such, in addition to implementing an internal system, it would behoove most to consider contacting their bank and finding out what kind of additional fraud protections are available.


Tis is


especially true for EFTs and ACH transactions, which have the shortest reporting time period. Te following section will address in further detail what you can do to protect yourselves and limit your exposure and liability should your professional accounts fall victim to fraud.


Ways Attorneys Can Avoid Falling Victim To Fraudulent Schemes And Electronic Bank Fraud


To avoid falling victim to these schemes, make sure to


carefully scrutinize unsolicited emails and phone calls from individuals or entities with whom you have no prior dealings requesting your services, particularly if the email/phone calls originate from a foreign country or contain misspellings and grammatical errors. When undertaking representation of an existing client, be


on the lookout for any of the common fraud elements between your existing client and their purported client including:


Ethics & Bank Accounts Continued from page 25


ethical violation charge. However, if the amount fraudulently withdrawn is in excess of what the attorney can cover, then this failure to report the suspected fraudulent activity to the bank in a timely fashion (and subsequently satisfy the missing moneys), could result in the attorney facing charges of malpractice and/ or ethics violations as it pertains to the management of the IOLTA account. While this specific ethical issue has not occurred in Maryland, it has been reportedly seen in other states and is of growing concern to Maryland practitioners. Attorneys must protect themselves from this kind of


monetary and professional liability. Tis includes being aware of our bank’s policies regarding fraudulent activity and the reporting of such suspected activity. Ask for a copy of the bank’s fraud policies and then implement a system within your firm to ensure that your bank accounts are regularly monitored in accordance with the bank’s reporting requirements. Larger firms may have the luxury of an onsite bookkeeper


who can review the daily transactions of the operating and IOLTA accounts via online banking. Smaller firms and solo practitioners, however, will likely struggle more with this


• An apparent legitimate transaction, which may involve an individual/entity located outside of the United States


• Contact with the ultimate “client” almost exclusively done by phone, email or other electronic means Receipt of a large dollar cashier’s or corporate check





• Te large check, or the envelope in which it is sent, in is handwritten


• Pressure placed on attorney from “client” to wire funds immediately after receipt of check





Request that the funds be wired to an account outside the United States


• Te potential to earn a significant fee/commission for little or no work


Take steps to independently verify the information


provided by your “client.” For example, if the “client” asserts a claim against ABC Company in Hometown, U.S.A., that entity probably exists and using the name of an actual business will add legitimacy to the “client’s” story. Use the internet and sources other than those provided by the “client” to develop contact information for ABC Company.


Once you have


received the purported cashier’s check, contact ABC Company using your independently derived contact information and verify elements of the “client’s” story and the transmittal of the purported check. However, be careful when doing so and make sure to keep all communications limited so as not to


Trial Reporter / Winter 2012 27


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