How Not to Get China Scammed

AziaBizbBlog has a post on emails (usually allegedly from China) that seek to scam attorneys. The post is entitled, How Not to Get Scammed by a Scam Email, [link no longer exists] and much of the post serves as an equally good lesson on how not to get scammed by a Chinese product seller as well.

Let me back track a bit and talk the attorney scam. These are getting incredibly common and they do sometimes work. The scammer seeks to hire a lawyer to collect money owed to the scammer or to the scammer’s company. Typically, the attorney quickly succeeds in recovering some or all of the money owed. The fake creditor pays its debt to the attorney by check, the attorney deposits the check into the law firm trust account, and then the trust account cuts a smaller check to the scammer, with the attorney keeping its contingency fee. A few weeks later, the bank tells the law firm that the check from the alleged debtor was fake and the law firm now must compensate the bank for the loss. I have read of this happening to at least two law firms and a number of the international lawyers at my firm have been contacted at least by lawyers asking if a particular email is a scam. Every single time it has been.

Our international litigators have also been contacted at least twenty times by foreign companies inquiring whether we would sue a “Chinese” scam company to which the foreign company sent money for product that never came. I put Chinese in quotes because much of the time there is no evidence the scammers are based in China. We even had a client who came close to sending  $800,000 to an alleged investment bank in London, but ended up not doing so after we discovered its address was actually a Blimpie’s restaurant. We also represented a European client that sent nearly a million dollars to a “law firm” in Seattle that was actually just a warehouse. When we told the client there was no such law firm in Seattle, no such lawyer in Washington, and that our Googling of the address had revealed it was a warehouse and the photos of the building online confirmed this, our client still insisted we send someone to this address to make sure. We did and it was, of course, a warehouse.

So how can you tell whether you are dealing with a legitimate company or not?

AsiaBizBlog calls for applying the following three part test to the attorney email, but I would add that it is equally applicable to anyone you are dealing with strictly over the internet:

1) Review the content of the e-mail for suspect indicia;
2) Check the e-mail properties for clues as to origin; and,
3) Honestly look at your own motivation for wishing to believe in the purported validity of the e-mail received.

AsiaBizBlog’s content review consists of the following:

The writer is purported to be an executive of a foreign company owed a substantial debt or, in a twist, and ex-spouse with outstanding custody payments. Generally, some kind of deal is offered that is profitable to the lawyer. Is this already sounding strange to you?

Does the e-mail spend paragraphs describing the company, its business and the legal issue involved? If so, your delete finger should begin to itch. In fact, this is the setup, designed to create a sense of trust in the reader. Warning bells should ring when a stranger tells another confidential information over an insecure method of communication.

Is the legal issue proposed the collection of a debt? Virtually all scam e-mails I have read propose collection matters. In one common scam, the purported debtor — in existence only for the scam and quite likely the “client” himself — pays up with a forged bank check. After attorney wires client the proceeds, the bank check comes back, unpaid, to haunt the attorney, who is now on the hook for the sum he wired plus bank fees for bounced check. Client and Debtor vanish into the night. Instead of agreeing to take a percentage, try proposing to this client an hourly basis with a hefty upfront retainer wired in cash. Better yet, don’t. You won’t hear back.

Does the writer compliment you? Here is an actual example: “After a careful research, we have been able to establish that delinquents or past due accounts are settled when reputable and aggressive firm or professional(s) represents an organization in collection of debts or possible litigation that may arise thereof.” …which is why we’ve chosen you! Your vanity meter should read off the scale. A compliment from a stranger may be genuine, but may also lay the groundwork for very subtle scheming. Redouble your suspicions!

Is there extensive use of four and five syllable words, such as actualization, implementation, delinquency, and sentences that run on for 50 words or more? This is an attempt to appeal to those who inhabit the jungle of legal jargon. Business executives hardly write at all and when they do, they do so in bullet points of no more than 10 words of two syllables each. Your delete finger should now be hovering over the delete button.

If the writer offers a substantial retainer, one can virtually disregard the rest of the e-mail immediately. Generally, clients do not wish to pay all. The delete finger should feel heavy now…

Are you addressed by name? If you are addressed only by “Counsel,” or not at all, the e-mail is intended for a mass audience. Hit the delete button.

Does the e-mail purport to come from China? China is hot and ripe for scam-ploitation. Chinese rarely, if ever, reach out to people personally unknown, untouched and unseen for representation. Delete.

Is the claim made that the writer came across the attorney’s name in a directory in which the attorney isn’t listed or doesn’t exist? Delete.

Does the writer claim to have contacted the attorney once before, when there hasn’t been prior contact? Delete.

In a lengthy e-mail, are there significant errors of grammar and/or spelling? Delete

To which I would add the following:

Does the writer’s English sound like someone from China, or does it sound like someone trying to sound like they are from China?

Does the email address match the domain name? Oftentimes, the scammer will claim to work for a completely legitimate Chinese company and direct you to the website of that company. Well and good, but then why is the scammer’s email address a yahoo account?

Legitimate Chinese company or not, now is the time to run a Google search on the email address and the company name. I estimate that at least half the time when I have run such a search after we are contacted by someone who has been scammed, there are people on the internet who have already written about the scam.

Why if the company is in Shanghai, does the email come from Singapore?

Put the address you are given into Google maps to see what comes up. I once had a case involving many investors who invested millions in “Chinese” real estate by sending money to a company whose address was a vacant lot in a Chicago suburb (the funds were wired or sent to a PO Box).

Look at the website’s whois information. I did this once for a client and saw that the website of the company with whom he was thinking of investing was run by someone who was still operating under a Federal Consent Decree that required him to pay back $20 million he had stolen in an investment scam

AsiaBizBlog also suggest you look at “your own motivations.” This is actually the most difficult area. My law firm has a Russian lawyer and a Russian paralegal and we do a lot of Russian work. You would be surprised how often one of my firm’s international lawyers gets a call from wealthy sixty year olds asking us to check out the legitimacy of their incredibly beautiful 22 year old girlfriends who will soon be coming to the rural U.S.  to marry them. It is amazing how cognitive dissonance can cause people to believe what they want to believe and that is on what scammers are counting.

How do you ferret out internet scams?