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Law Firm Lost Nearly $200,000 in Scam: Bank Not Liable

July 27, 2022

The ABA Journal reported on July 21 that law firm Perlberger Law Associates, which wired nearly $200,000 to a Nigerian bank, cannot recover those monies from Wells Fargo – so ruled a federal judge in Pennsylvania.

Hanna Perlberger didn’t know that the check she received was forged. She deposited it and wired funds from the check to a purported client.

Wells Fargo is protected by its deposit agreement, which says its duty to exercise ordinary care doesn’t require it to examine deposits processed by automated means, ruled U.S. District Judge Gerald Austin McHugh of the Eastern District of Pennsylvania in a July 19 decision. The agreement also says the depositor is responsible when checks are returned unpaid, even if the funds have been withdrawn.

The bank is also protected by an agreement that says it is not liable for damages for processing wire transfers in good faith, McHugh said.

Perlberger Law Associates was scammed after it agreed to collect a $199,550 debt for what it thought was a tool company in Florida. After Perlberger Law Associates demanded payment from a person purporting to represent the debtor, the law firm received a check for the full amount of the debt owed.

In June 2020, Perlberger deposited the check at an ATM because she was not permitted to enter her Wells Fargo branch because of COVID-19 concerns.

The next day, the law firm’s online bank account showed the full amount of the deposit was available. Using wiring instructions that she had received from the purported client, Perlberger wired the money to what turned out to be a bank in Nigeria.

Since the deposited check was forged, the full amount was deducted from the law firm’s operating account.

McHugh said Perlberger Law Associates was bound by the account and wire agreements. There is no heightened, implied duty of good faith and no evidence in the record to support the existence of an implied contract, he said.

“The situation in which plaintiffs find themselves is deeply regrettable, stemming from a confluence of unfortunate events,” McHugh wrote. “In a sad irony, the admirable efficiency with which they acted to distribute funds to their ‘client’ contributed to their being victimized. But they have not advanced a theory of recovery for which there is a remedy recognized by law, and I am obligated to grant summary judgment against them.”

An appeal has been filed. For what it’s worth, I agree with the judge’s decision. All law firms should be sniffing for wire fraud scams.

Sharon D. Nelson, Esq., President, Sensei Enterprises, Inc.
3975 University Drive, Suite 225, Fairfax, VA 22030
Email:   Phone: 703-359-0700
Digital Forensics/Cybersecurity/Information Technology
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