It is old news that scammers pose as clients to defraud attorneys. A typical scam is that the client will have an adverse party (typically a former spouse or a purchaser of equipment ) issue a fraudulent cashier’s check, which the attorney will deposit into his trust account. The attorney will then disburse genuine funds from the trust account to the client. Three or four weeks later, the bank will reverse the deposit of the fraudulent cashier’s check; and the attorney will be responsible for the overdraft.
I recently encountered a similar scam in which a client claimed he had worked for a Fortune 500 company, that he was sexually harassed by his female supervisor, and that he was wrongfully terminated after reporting the sexual harassment to the employer’s Human Resources Department. The client then claimed that he had entered into a $109,000 severance agreement with his employer, but the employer has inexplicably refused to remit the $109,000 severance check.
What makes this particular variation of the scam insidious is that the client provides upfront the following documents: (1) his employment offer letter; (2) his termination letter; (3) a signed severance agreement; and (4) an email exchange in which the employer acknowledges its obligation to pay $109,000 pursuant to the severance agreement. The severance agreement and the email exchange are purportedly from the vice president of H.R. for the corporation; and a google search confirms that the person was an officer of the corporation.
A close examination of the four documents revealed their fraudulent nature. Neither the employment offer nor the termination letter contained the address of the alleged employee. All of the documents contained formatting errors, such as extra spaces between words and no spaces between paragraphs.
The wording of the severance agreement did not comport with standard legal drafting. Instead of stating “One-hundred and nine thousand dollars ($109,000)”, it stated “$109,000 [One hundred and nine thousand dollars]”. Also, brackets were found in the severance agreement around dates, the name of the employee, the name of the employer, and the name of the state in the forum selection clause, as if the drafter did not know to delete these brackets from the template.
In the email exchange, the subject line changed from “Breach of Severance Agreement” to “Severance Payoff”; and the alleged emails from the corporation’s Director of Human Resources contained spelling and punctuation errors. Also, this corporate officer had recently resigned from her position.
The potential client also insisted that I send him a retainer agreement before we even spoke.
Update: The Virginia State Bar has issued an alert about the severance agreement scam. https://www.vsb.org/site/news/item/scam_involving_severance_agreement
Practice pointer for attorneys: Always be wary of emails from potential clients in which they claim a large sum is owed to them. Always meet in person with the potential client. Never deposit a cashier’s check without verifying its source and authenticity.