Editor's Notes

Beware of Scams

The Port Arthur, Texas scam and other modern scams designed specifically to go after personal injury attorneys

by Jay Krulewitch

This article originally appeared in the May 2018 issue of Trial News, the monthly publication of the Washington State Association for Justice .

The secret of being a top-notch con man is being able to know what the mark wants, and how to make him think he’s getting it. — Ken Kesey
If you tell a lie big enough and keep repeating it, people will eventually come to believe it. — Joseph Goebbels
Only two things are infinite, the universe and human stupidity, and I’m not sure about the former. — Albert Einstein

I picked up the phone the other day at my law office and a man who introduced himself as “Kevin Williams” started to tell me about his tale of woe. It went something like this:

“I was badly hurt in an accident that occurred in Everett, WA. I was working as a concrete cement finisher, driving my rig, when I was slammed into by a U-Haul truck, being driven by a U-Haul employee, at a high rate of speed. This accident occurred on January 3, 2018. As a result of this violent collision, I suffered a fracture to my spinal cord and have suffered paralysis. I ended up making it back to my home in Port Arthur, Texas, and I have negotiated a settlement with the insurance adjuster for U-Haul for $650,000. But I have some misgivings. They are coming over right now to have me sign the paperwork on the settlement. Can you help me?”

I knew exactly what he meant by “helping him.” If I had not heard of this scam—a variation on the paraplegic scam (where the caller often says they are from some other state, on the verge of signing a final settlement, and calling to see if you might be willing to represent them at this late hour)—I might have been pulled in to deal with this situation. But, fortunately, I had already heard of this scam. If you happen to be a member of the WSAJ EAGLE list serve, then you probably know that there has been some recent chatter about this particular kind of scam. Sadly, this happens to be one of the more common scams targeting plaintiff personal injury attorneys which we are seeing in this day and age. So let me say this as directly and boldly as I can: If it looks too good to be true, it probably is!

The email settlement check scam

There are tons of scams that are being perpetrated using emails as a way to snag unsuspecting law firms. In one particular type of email scam, you are likely to receive an email indicating that the person needs your help to facilitate a settlement they have obtained. They are out of the country, of course, so they are beyond the reach of any prosecuting agency in the United States. They tell you that they need an attorney to facilitate a settlement they have obtained. Sound strange already? They tell you further that they will send you a check they want you to deposit, then disburse, with their portion of the funds being sent to them. Sound funny? They are offering to let you make a fee on their settlement check for doing . . . virtually nothing at all? Is this sounding suspicious?

Well, sadly, a number of law firms around the country have fallen for this kind of scam to the tune of millions of dollars. As one observant writer has remarked:

“[this] scam is a little more clever than the usual, but it is obvious I will be requested to prepare a release and then send the settlement funds to the ‘client.’ Several months later, I will have to replace the funds in my escrow account after I discover that the settlement check was fraudulent.” — Philip Frankel, “Email Scams Targeting Personal Injury Attorneys”, Lawyer Advertising Blog

Karen Smith, in an article for The Wall Street Journal, has written about this particular kind of scam and indicated that:

“Law firms are becoming top prey for email scammers who exploit lawyers’ eagerness to take on new clients through the Internet. Crafting elaborate stories that often involve real companies or properties, con artists say they live abroad and need help collecting money from a debtor or a legal settlement. They ask the lawyers to wire the funds to bank accounts overseas, after taking a cut in fees for their services. The settlement checks mailed to lawyers’ offices and accompanying documents, such as insurance paperwork, appear to be authentic. Phone numbers and other contact information on the documents lead back to scammers who pose as employees and vouch for their legitimacy, authorities say. Even after doing due diligence, some lawyers fail to discover the scam. They deposit the check into the firm’s trust account—a special account for client funds—subtract their fee, and then wire the balance to an overseas bank account, before the law firm’s bank realizes the check is a fake or can stop the wire transfer.” — Karen Smith, “In Email, Scammers Take Aim at Lawyers”, The Wall Street Journal Online, August 5, 2012

U.S. Postal Inspector Louis Di Rienzo, head of a cross-border mail fraud team in Harrisburg, Pennsylvania, estimates that law firms have been bilked out of at least $70 million that way since 2009, when he first began investigating such frauds.

In another case, Gene Goldenziel, a Pennsylvania attorney, “dodged a bullet” when he delayed putting a suspicious check into his law firm’s trust account for client money.

Gene Goldenziel said he was contacted by a Pennsylvania resident with an Asian accent who called to seek his assistance after alleging losing a leg in an accident at a Pennsylvania-based trucking company. She gave Goldenziel the following story: the trucking company’s disability insurer was willing to write her a check for its $400,000 policy limits but was insisting that the check be sent to her bank or her attorney. She, in turn, was contacting Goldenziel for assistance, to be her attorney in this transaction. Everything seemed legitimate. She gave Goldenziel a copy of the disability policy, as well as phone numbers for her insurance company and her employer. When he called the employer, they “verified” her story. But when he called the insurance company, they indicated that the check had to be deposited into his law firm’s trust account so that the money could then be sent to this person, the supposed worker, at a foreign location of course, minus his attorney’s fee! — Martha Neil, “Relieved Pa. Attorney Says He Dodged a Bullet in Alleged $32 M Bad-Check Scam Targeting 80 Law Firms”, ABA Journal Online, December 1, 2010

Mr. Goldenziel became suspicious and delayed depositing the check. He then learned from an investigator that it was counterfeit. Goldenziel pointed out that “lawyers are especially vulnerable to such schemes . . . because it isn’t unusual in this day and age not to meet a client face-to-face.” A Philadelphia federal prosecutor noted that “law firms routinely put settlements into escrow and then divide the money up and issue law firm checks to those entitled to a portion of the title.” In essence, this type of scam is targeting personal injury attorneys using a scam that mirrors how personal injury attorneys typically handle settlement proceeds received in the normal course of business. Again, let’s remember: If it is too good to be true, it probably is!

The Port Arthur, Texas paraplegic scam

Now let’s return to the Port Arthur, Texas paraplegic scam, which is what many Washington practitioners have been seeing or hearing about over the past few years. Remember, this is the scam where the caller indicates that he has been crushed by a truck, often a FedEx truck, backing up into him or his relative, causing the person to suffer a terrible, permanent, life-changing injury, usually paralysis, making them paraplegic. They have negotiated a settlement with the third-party insurance carrier and the adjuster is on their way to their home residence. Naturally, they no longer work or live in Washington, so they are calling from out-of-state. They claim that they need your advice and assistance. They don’t want to sign the settlement papers. But they have no money for medical supplies, for rent, or for food. If you can advance them some money and help them out, they will let you be their lawyer! Such a deal! So they instruct you how to purchase and send them a Greenpak Money Card or another such financial device. If you do that for them, they will call off the meeting with the adjuster and let you represent them on this matter.

So if the call comes in, what should you do? You have a lot of options. If you realize it is a scam, you should probably simply hang up. But here are some other suggestions from people who have studied this kind of scam:

  1. The bottom line is never advance a client or potential client funds in order to get a client to sign up with you.
  2. Always do a complete interview to obtain facts to know the claim is legitimate.
  3. Use social media and a Google search to try and locate details that an accident has been reported. In addition, use Google Earth to get a glimpse of the address that the person has given you. You want to see if, in fact, the address is a residence, or is it just a bunch of empty farmland in Texas or Louisiana, or some other state!
  4. Be methodical about developing the facts and follow the procedures you’ve created. Don’t be in a rush. Don’t skip your procedures for conducting a thorough investigation.
  5. If you don’t really understand the law in a particular area, then consult with someone who does.
  6. Run the scenario the caller has given you by one or two good friends who practice in personal injury and get their take on this particular caller and his/her situation.
  7. Do not trust your bank to ferret out the fraud. By the time your bank is able to determine that the check you deposited was fraudulent, or has been dishonored by the bank that the check was purportedly written on, the scammer will be long gone with your money. Once they have your money, they are as good as gone!

So, you may ask, what happened in my situation? I just kept digging for information. What was the address or intersection where the collision occurred? What kind of car were you driving? Was anyone else in the vehicle? Who was your insurance company at the time? If you were listed under your company’s insurance, what was the name of that insurance company? What was the name of the other driver in the U-Haul? What police agency came to the scene to investigate? At what hospital did you seek treatment? Where was the hospital located? How long were you at the hospital? What was the name of your doctor or doctors who treated you at the hospital in Everett? In my case, the person could only say it was a hospital in Everett. He claimed he did not know the name of the hospital. At that point, I knew he was perpetrating a scam. I asked more questions. Were there any witnesses? What were their names? When I finally asked him “one too many questions,” he said “well, that’s okay” and just hung up on me!

In sum, we are in the business of helping people, of assisting the victims of negligence, whether that negligence was committed by an individual, a corporation, a business, or by a government actor or agency. And, yes, since we are running a business, we need to make a fee on our cases in order to survive, to pay our bills, to put food on the table, and to pay our experts and vendors, to live to fight another day. So, without question, we are looking for good cases to take on where we can make a difference, obtain a decent recovery for our clients, and make a fee for ourselves in the process. But it pays to use your common sense, to slow things down, and to conduct your normal investigation when a suspicious phone call comes into your firm. Do not dispense with your normal routine of asking questions designed to elicit proper information. Do not jettison your normal skepticism, your normal questioning, in your haste to sign up such a client. You are not signing up a client. Instead, you are much more likely to be falling for a well-developed scam. Do not be bullied into assisting such a caller when they prey on your compassion by claiming they are about to sign a settlement agreement. Finally, ask yourself, does this all make sense to you? Is it even remotely likely that a case might settle for thousands of dollars within two months of the incident? Would a genuine client act in the manner in which this caller is acting? If your answer is “probably not,” run from this person. They are not what they seem. Save your valuable time and energy for real clients, deserving clients, clients who truly need your assistance and whom you would be proud to represent!


Jay Krulewitch, EAGLE member, practices personal injury, civil rights, and criminal defense in Lake City, Seattle. He is the Editor-in-Chief of the Trial News.


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