PRACTICE WATCH, by Barbara Buchanan, Practice Advisor
Mirror wills, separation agreements and bad cheque scams
Mirror wills: when one spouse asks for a new will
Lawyers frequently act jointly for couples to draft mirror wills. The spouses have a shared understanding as to what is contained in each other’s will. If the couple later divorces or enters into a written separation agreement to divide their assets, is it ethical for the lawyer who drew the mirror wills to act for one of the parties in drawing a new will?
The Ethics Committee considered this question and was of the view that a lawyer should not act to draft a new will for one of the parties unless the lawyer had knowledge that the will of the other party was no longer valid.
Separation agreement – undivided loyalty
Sometimes a married couple will approach a lawyer to draft their separation agreement. They say that they want a simple agreement that will reflect their wishes. A lawyer should decline to act for both parties in such circumstances. As a general principle, a lawyer has a duty to give undivided loyalty to every client. The lawyer would not be able to protect the interests of each party when acting jointly.
Editor's note: This fraud alert includes names used by fraudsters in BC. Real people with the same names may be the victims of a fraudster or of coincidence, but are not suspected of wrongdoing.
Fraudsters posing as clients continue to ask lawyers to pay money out of trust based on a bad cheque, often under the guise of collecting on a phony debt. Some of the different fraud scenarios and names that fraudsters have used in BC include:
- Commercial loan agreement – David Lawson, James Gillard, Mark Rudic, Yu Shengli, Dr. Richard Abramovic, Izzabin Bin Aris, Aris Izaddin, Ma Li Ni, Larry Mason, Edward Williams, Fred Williams, George Graham.
- Personal injury settlement between employer and employee – Terry Sullivan, Patrick Cluster, Graham Jackie Lunn
- Commercial invoices – Mark Branson, Alice Wood, Bessant James, Shi Quen, Qui Xiandong, Jerry Steven
- Matrimonial, including collaborative divorce agreement – Donna Chipman, Kathy Scotia, Mima Oshiro, Masako Kazue, Rika Takahashi, Tanako Masato, Julie Burany, Brenda Blumenkrantz, Alice Goldbery, Zaria Hoshiko, Hikari Yamato
- Real estate – Jyoung Chung Tu, Young Chung Tu, Shiukmoda Joji
Commercial loan agreement scam
In a new twist to the commercial loan agreement collection scam, “David Lawson” professes to want to start a lawsuit right away and only reluctantly agrees to the lawyer writing a demand letter to the “debtor,” Samuel P. Duboa. He feigns interest in his legal rights and in calculating the accrued interest on the principal. Lawson provides convincing documentation, including a $380,000 loan agreement between himself as lender and Duboa, a copy of a $380,000 purported bank draft payable to Duboa, email correspondence with Duboa, a scan of an Ontario driver’s licence in the name of David Lawson, and a purported attestation to his identity by a Hong Kong notary or lawyer.
In the email correspondence, Duboa tells Lawson that he is also owed money by debtors, which is frustrating his ability to pay Lawson. When one of Duboa’s debtors is ready to pay, Duboa says that he will instruct the debtor to make the cheque payable to the law firm in trust, rather than to Duboa. The law firm receives a cheque from a real company with the name of the payee altered and sometimes other alterations. The company’s cheque may clear before either the law firm, the bank or the company find out about any alterations. When advised the cheque has cleared, Lawson asks the lawyer to wire the funds to a bank account in the name of a third party in Hong Kong, where Lawson professes to be temporarily on business.
Below is an example of typical correspondence that David Lawson has sent to BC lawyers:
From: David Lawson [email@example.com]
Sent: Wednesday, July 06, 2011 11:14AM
To: xxxx xxx
Subject: Per Discussion
Dear xxxx xxx,
Thanks for your time yesterday. I am contacting you in regards to a breach of business loan agreement with Mr. Samuel Duboa in Vancouver. I provided a loan to him so that he can meet up with his management and operational obligation during the rough economic climate. I provided him with an emergency loan of $380,000 with a term of 12 months and fixed interest rate of 12.25%. The repayment period has since elapsed but he has been unable to finalize the repayment of the loan and has only paid $147,000 till date. Let me know if this falls under the scope of your practice so that I can provide you with more information on this matter.
In addition to supplying a copy of the supposed loan agreement, David Lawson provides a copy of a financial instrument as evidence of his loan to Duboa (Figure 1).
Lawyers have received an attestation verifying David Lawson’s identity via fax number 85230141823, which is purported to be signed by either Hong Kong lawyer or notary Xie Lianzhong of Yip, Tse & Tang, Solicitors and Notaries. The Law Society of Hong Kong and the Hong Kong Society of Notaries have confirmed there is no such lawyer or notary. The “attestation” has included the following information:
I attest that:
1. I am a lawyer in Hong Kong with a place of business at Room 2202, 22F, Kowloon Building, 555 Nathan Road, Yaumatei, Kowloon. Tel: 85295311758 or 85268889999.
2. I met with DAVID LAWSON on the 10th day of August, 2011 and examined his/her original Ontario Driver’s Licence issued by the Government of Ontario on 23rd March, 2006 and bearing document number L38707485670506.
3. To the best of my knowledge and belief, the document is valid and unexpired and the information on it is current, correct and complete; and
4. This is a true copy of the document, the original of which I examined.
Signed by me on the 10th day of August, 2011 at Kowloon, Hong Kong.
Name of agent (please print): Xie Lianzhong
David Lawson has sent lawyers a scan of his purported driver’s licence (Figure 2):
Below is a sample of wire transfer instructions to a lawyer from David Lawson:
Please wire $125,000 from the funds to the account information below:
Bank Name – Bank of China, Hong Kong Ltd.
Bank Address – No 833 Chaung Shawan Rd. Kowloon
Swift Code – BKCHHKHH
Account Number – 01274010166899
Beneficiary Name – Taylor Gary
Beneficiary Address – Pik Wah Bldg, 7A Pitt Street, Yaumatei, Kowloon, Hong Kong.
Please confirm receipt of wire information and send me a copy of the transfer confirmation slip today so I can forward same to my supplier. Please also confirm if you have contacted Samuel regarding the balance.
The emails below illustrate some more obvious scam attempts on BC lawyers:
Personal injury settlement between employer and employee
From: Sullivan L Terry [mailto: firstname.lastname@example.org
To: xxxx xxx
Sent: July 5, 2011 1:02pm
Subject: Dear Counsel
I am seeking legal representation from your law firm regarding a breach of settlement agreement with my former employer due to the injury I sustained while working for them. I need proper legal advice and assistance to know the best way to handle this issue. If this is your area of practice, please contact me to provide you with further information.
Collection of damages for infliction of disease
From: Ms. Melissa Andersen [email@example.com
Sent: Monday, July 25, 2011 10:46AM
To: xxxx xxx
Subject: collection of damages
I would like to make a request for your assistance in a matter that had been settled out of court, as I am presently away from Canada.
Essentially, it is important to mention that I am HIV+ patient as a result of an unfaithfulness on the part of my ex-husband, Mr. Bill Langerak. Recalling my former relationship with Mr. Bill Langerak, I could confirm to you that I was pregnant to him in June 2009.
Unfortunately, Mr. Langerak did not disclose his HIV+ status to me....
[Andersen includes several paragraphs about her HIV status and difficulties with her ex-husband.]
The latest development is that my ex-husband has just informed me that he has made adequate arrangement with his paying bank in the States to make first payment to the value of US$250,000 out of the agreed $380,500 in damages to me.
In a nutshell, I would be glad if you could kindly notify me of your interest to represent me on this matter. I would also be interested to know your professional fee towards the requested service.
Ms. Melissa Andersen
In all of these scams, the “client” needs the lawyer to deposit and pay out on a certified cheque or other negotiable instrument before discovering it’s fake. Waiting for the cheque to clear may help mitigate but not eliminate the risk — for instance, a cheque that purports to be drawn on an actual bank account may well clear initially, with the financial institution later finding that the instrument was bad. Protect yourself and trust your instincts. Protection from these scams could be as simple as requiring the debtor to pay the client directly by cheque or wire transfer so that the funds do not go through your trust account.
Visit the Law Society’s website at lawsociety.bc.ca to find out more about how to identify and avoid being caught by scams (see Lawyers / Fraud Alerts / Bad Cheque and Other Negotiable Instrument Scams), or contact a Practice Advisor for confidential advice (firstname.lastname@example.org).
Can you disclose information about a fraudster if you’ve been duped?
In the above scenario, although “David Lawson” purported to be a client, he was not truly seeking the lawyer’s advice or assistance. Rather, he assumed an identity to perpetrate a fraud and dupe the lawyer into assisting him, exposing the lawyer to financial loss.
If a lawyer is satisfied that:
- a purported client has assumed a false identity to perpetrate a fraud,
- the client has perpetrated the fraud, and
- the lawyer has been duped into assisting with the fraud,
the lawyer may disclose that information without a court order.
Positive development in the fight against debt collection scams
On August 15, 2011, the US Attorney’s office for the Middle District of Pennsylvania issued a press release announcing that a Nigerian man, Emmanuel Ekhator, was extradited to the U.S. on August 11 and faces several charges with respect to his involvement in a debt collection scam targeting law firms in Canada and the U.S. An October 3, 2011 trial date has been scheduled. Also charged was Yvette Mathurin, purportedly a resident of Ontario, Canada. Others are believed to be involved, including people from Nigeria and Korea.
Contact Practice Advisor Barbara Buchanan at 604.697.5816 or email@example.com for confidential advice or more information regarding any items in Practice Watch.