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Bad check scam – ERAI Members’ identities being used to commit fraud

Kristal Snider
ERAI, Inc.

ERAI recently reported a case in which an ERAI Member’s identity was used in a scheme to defraud several law firms in Florida and Texas resulting in at least one victim being duped out of $1,125,000.00.

Fake or bad check scams vary significantly but always tend to share one common denominator:  The perpetrator wants to give you a check, cashiers check or money order but wants you to wire some of the money back.  Enclosed is case example which demonstrates how the scam can unfold.

Case Example Investigated by ERAI

On April 10, 2015 an attorney in Dallas, TX was approached by a Japanese company calling itself Renesas Electronics for assistance in finalizing a joint venture with a Texas entity, Abacus Industries.  The attorney believed he was interacting with the widely known Japanese semiconductor manufacturer, Renesas Electronics, who is based out of Tokyo, Japan (www.renesas.com). After an initial email communication, the attorney was provided with a “Confidential Letter of Intent” allegedly signed by the CEO of Renesas which outlined a business deal with Abacus Industries.  Over the next (3) three weeks the attorney was instructed by Renesas’ Sales Manager, “Tsuneo Takahasi”, that he would receive partial payments required by Abacus and that he was to deposit the funds and wire the money to their agent.
 
The attorney received what appeared to be authentic checks by overnight mail from Larry Horns, 161 Bayt St., Ste. 3700, Toronto, ON M5J2S1. Examples of the checks received are provided herein.

A memo was included with the checks requesting notification be issued upon receipt.  The names of the individuals to be notified were Paul Jackson (paul.jackson@dr.com) and Larry Horns (larry.horns@dr.com).   According to the attorney, checks totaling $1,585,000.00 were received. $5,000.00 was to be kept by the firm as an initial retainer for legal services; $1,125,000.00 was wired by firm to the following bank accounts:

Bank Name: THE BANK OF FUKUOKA, LTD
Swift Code: FKBKJPJT
Branch Name: HEAD OFFICE
Bank Address: 2-13-1 Tenjin Chuo-ku Fukuoka-city Fukoka Japan 810-8727
Bank Telephone NO: +81-92-723-2131
Account NO: 1695186
Beneficiary Name: HANEYA Co.Ltd
Beneficiary Address: 7-11 Komondo-machi Hakata-Ku Fukuoka-city, Fukuoka, Japan

Bank Name: Hang Seng Bank Limited
Bank Address: 83 Des Voeux Road Central, Hong Kong
Bank Code: 024
Account No: 364 352203 883 
Swift Code: HASEHKHH
CHIPS No: 010522
Beneficiary Name:  DEVELOP INTERNATIONAL BUSINESS CO, LIMITED
Beneficiary Address: Unit E228, 3/F., Wing Tat Commercial Building, 97 Bonham Strand East, Sheung Wan, Hong Kong

On May 4, 2015 the attorney was notified by his bank that his trust account had been placed on “hold”; the previously deposited check(s) had been drawn on a closed account. A call to the issuing bank, Banque Royale du Canada in Montreal, QC, revealed the attorney was the victim of a scam.

The attorney then contacted Abacus Industries dba Abacus Technologies (www.abacuselect.com) regarding this matter. Abacus stated they had no knowledge of this transaction and were completely unaware their company name had been used for fraudulent purposes.


Buyer Beware!

Depending on the circumstances and your State's laws, you may be held responsible for the entire amount of the fraudulent check that you cash at the bank or deposit into your account. If your bank credited your account, it can later reverse the funds if the check is found to be fraudulent.


Attention All Lawyers!

Check out these Risk Management Tips for scams intended specifically for you. http://bit.ly/1Hqr8NN

 

Sources:

http://www.lawsociety.bc.ca/page.cfm?cid=2394&t=Bad-cheque-scam:-Steps-to-manage-the-risk

http://www.helpwithmybank.gov/about/index-about-us.html

 

 



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