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Fraudsters are Everywhere – Even in Family Law Matters

Fraudsters are Everywhere – Even in Family Law Matters

Around the holidays, when people are inundated with shopping opportunities and may be encouraged to spend beyond their limits, we hear a lot about the various thefts, frauds and scams that get perpetrated, and how they are apparently on the rise.  This is despite the flurry of pre- and post-holiday sales, enticingly low prices, and attractive “Boxing Week” opportunities.   And the upsurge in theft is not limited to shoppers; according to a recent article  in a Toronto newspaper, the incidence of shoplifting by store employees increases by up to 50% around the holidays.  According to another article, an estimated $1.8 billion in merchandise was shoplifted from U.S. retailers in the four weeks leading up to Christmas.

As lawyers, we also see our share of scams and fraud, and not just in terms of the matters that come through our door.   Indeed, there has been a spate of attempted frauds against lawyers themselves, perpetrated by con artists of all types.

One particularly fertile area for fraud is in the realm of real estate law, where in the past fraudsters have tried to bilk mortgagees and banks (and – by extension – their lawyers) out of hundreds of thousands of dollars through sham real estate transactions and mortgages registered against homes with falsely-inflated prices.  The problem was becoming so rampant, in fact, that the Ontario government was prompted a few years ago to enact Bill 152, which changed the relevant real estate statutes (including the Land Registration Reform Act, the Land Titles Act, and the Registry Act) to close a legal loophole that could be exploited by mortgage fraudsters.

But this phenomenon is not restricted to real estate law; family law lawyers collectively see their share of scam attempts too.  One form of family law-related fraud that has regularly been making the rounds in recent years involves a purported potential “client” who contacts the lawyer by e-mail.  The so-called “client” – usually a woman, and always writing from some far-away country (typically Japan, China, Taiwan, or Korea) – details how she has obtained a sizeable divorce judgment against her ex-husband but has succeeded in collecting only a portion of it from him.   She apparently needs the help of a lawyer to collect the money; naturally at some point the lawyer is asked to advance funds in anticipation of the receipt of payment by the ex-husband of the remaining settlement funds.

(And if this scenario sounds vaguely familiar, it’s merely a family law twist on advance-fee fraud commonly known as the “Nigerian Scam”, which has made its rounds by e-mail and internet in various forms for about a decade now).

Unless you are a retailer, involved in real estate, or a lawyer, you may think these tales of theft and fraud don’t concern you.   But no matter what your situation or line of work, these illustrations highlight a point that everyone should heed:  Being alert to the potential to be defrauded – and seeing the “red flags”—is half the battle.  And taking steps to protect oneself is the other half.

For the referenced articles, see:

http://www.torontosun.com/2011/12/01/stealing-christmas

http://www.castanet.net/news/World/68904/Shoplifters-cost-1-8B-at-Christmas

For a description of the “Nigerian Scam” see:  http://en.wikipedia.org/wiki/Advance-fee_fraud