Ride the Lightning

Lawyer’s Paralegal Allegedly Wires Money to Cybercriminal

May 2, 2023

It happens all the time. A fraudster fools a lawyer or a lawyer’s paralegal into wiring money to the cybercriminal.

The ABA Journal reported on April 27 that a Connecticut lawyer sent a portion of the proceeds from a home sale to a cybercriminal’s bank account, rather than the bank holding the mortgage, a negligence lawsuit alleges. The case is Moody v. Harding.

The lawsuit, filed April 24 in Connecticut superior court, was filed by home buyer Lesley Moody, who said the title to the home that she bought is encumbered by the seller’s mortgage because of the mistake.

William Cote, the lawyer for the seller, allegedly wired more than $159,000 to the wrong account after his paralegal gave him what proved to be a phony payoff statement. The money was supposed to be paid to the Freedom Mortgage Corp.

According to the suit, Cote had received a correct payoff statement with accurate wire instructions on August 10, 2022. Before he made the payment, his paralegal received an email from an unknown third party who claimed to be the seller. The email said there was a new payoff statement.

According to the suit, when the email fraudster sent the new statement, it “specified wire instructions for a different bank and account—presumably one that the fraudster controlled.”

The paralegal forwarded the new statement to Cote, even though it had “multiple material differences.”

Cote followed the new instructions when he wired the money. He learned of the mistake nearly a month and a half later, when the seller said he received a statement from the Freedom Mortgage Corp. reflecting a balance owed on his loan, according to the lawsuit.

Cote and the seller of the property are named as defendants.

So what do you do when you get a change in wiring instructions? You make a phone call, at a number known to you to be valid, to the person who is supposedly changing the wiring instructions. Wire fraud is so commonplace these days that strict protocols need to be in place to prevent being duped.

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
https://senseient.com
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