Wednesday, August 25, 2010

Lawyer Schemer, Scammed


The ABAJournal.com tips to this Washington Post article about the Montgomery County malpractice lawyer who was using his IOLTA account to improperly pay bills apparently fervently hoping he could get his bills, his taxes and his clients paid.  Bradley Schwartz's downfall was when he fell for the foreign client "retainer scam."  The way this thing works is that a lawyer receives an unsolicited retainer from a prospective foreign client written on a real check.  The foreign client writes, in effect, I'm owed lots of money from so-and-so will you represent me?  Oh, here's your retainer, a check for a small fortune is enclosed, but I mis-cut this check please deposit and refund $5,000, $10,000.  The idea is the greedy recipient deposits the check and without thinking sends along a check in the requested amount.  It turns out that the "retainer check" is "NSF," but the lawyer's refund check is stolen by the scammer. 

In the case of Bradley Schwartz, the schemer's $325,000 "NSF" check was deposited into a deep, dark hole, and Schwartz who owed clients nearly a $1 million dollars, started writing overdue checks to clients which immediately began bouncing.  This led to a criminal investigation resulted in Schwartz's jailing.  He was sentenced to 5 years, in what the sentencing judge called a tragedy of Shakespearean proportions.  Apparently Judge Salant meant Falstaff, as Mr. Schwartz was living large and gambling the money that did not belong to him. 

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