Scammers steal $330K settlement by impersonating law firm
Scammers allegedly used a spoofed email to masquerade as a law firm and steal settlement money.
Fraudsters allegedly used a spoofed email to impersonate a Connecticut law firm in order to intercept and steal a $300,000 settlement reached with the U.S. Department of Veterans Affairs.
This complaint was surfaced on Law.com Radar.
Kennedy, Johnson, Schwab & Roberge, the plaintiff, is now suing the unknown scammers who allegedly succeeded in getting the U.S. Department of Veterans Affairs to send them the settlement funds.
The department declined to comment on pending litigation.
The law firm represented Herman W. Shure in a slip-and-fall case against the VA. Shure alleged he tripped and fell at the West Haven VA Medical Center.
The VA, a nonparty, agreed to pay $300,000 to settle the claims, and the law firm input its bank and wiring information into the settlement agreement. According to the complaint, the VA stated the agreement could be sent by email.
However, the lawsuit suggests fraudsters intercepted the deal.
The defendants, John Does 1-20, allegedly sent a “spoofed” email to the VA, masquerading as the law firm.
The email allegedly instructed the VA to put a hold on the processing payment. It claimed the wire transfer needed to be sent to a Citibank account, not Citizens Bank, also nonparties, and would be provided shortly, the complaint claimed.
According to the filing, the VA wired the funds to the scammers’ Citibank account.
When the law firm learned the settlement funds were misdirected, it filed a report with federal law enforcers, the suit said.
“To date, it is unclear whether the funds remain in the John Doe Defendants’ Citibank Account,” the complaint claimed.
The law firm claimed the defendants violated the Electronic Communications Privacy Act of 1986, which was implemented to protect the interception of communications.
Counsel for the plaintiff, Christopher R. Drury of Gordon, Rees, Scully, Mansukhani, declined to comment.
Other law firms have been victims of fraudsters using cyberattacks to divert funds.
In Florida, for instance, attorney Frank A. Rubino alleged $100,000 was wired to a different JPMorgan Chase account after a fake email address impersonating his firm sent a different account number.
However, Rubino is suing more than just the John Does and has named JP Morgan Chase Bank as a defendant, as well.
“Despite the history and magnitude of bank fraud and identity theft, Chase Bank failed to alert the plaintiff of this last-minute account change or follow proper procedures or protocols to avoid this theft,” the Florida complaint said. “In short, Chase Bank knew, or should have known [the] account name did not not match with the account number on the wire from the thief.”
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Read the complaint:
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