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In the words of Dark Helmet (from Spaceballs one of the greatest spoofs of all time): I can’t believe they fell for the oldest trick in the book! What a goof! Or to put it another way, you can’t cheat an honest man. If they weren’t so anxious to take a fee for not doing any work they would not have been scammed.

The complete cure for the entire scam is to comply with the rule requiring that no disbursements be made from your trust account except from cleared funds.

That and a healthy dose of suspicion about why such a large amount (a) could not have been wired to your account or (b) better yet, could not have been wired directly to the supposed client.

Regulation CC is the Federal Reserve’s regulation on funds availability. These scams take advantage of the fact that funds written on a bogus teller’s check may be “available” and appear to have been “cleared” when in fact the bank can debit your account when they discover that the check is drawn on a nonexistent account. I personally will not dispense funds from my attorney escrow account for 15 days after a teller ‘s check is deposited, unless I know with certainty that the check is good.

The scam takes many forms. A friend of mine had an apartment up for rent, and received a telephone call from someone claiming to be from Great Britain. The person told my friend that he really needs this apartment, and that he would prepay the full amount of the lease, yet move in three weeks later. Sure enough, a FedEx envelope with a bank check for $33,000 arrives. When my friend first told me this, I told her not to deposit the check because it would result in a dishonored check fee charged to her account. I told her to expect a telephone call a few days later by the prospective lessee claiming that he could not go through with the lease, and to keep a month’s rent for her trouble and to wire him the rest.

Sure enough, it played out exactly like that, except the guy was generous and told her to keep two month’s rent. Needless to say, she was not a vitim of this scam. I investigated the check, and indeed it was bogus, although you could not tell it from looking at the check. It appeared as if it were a genuine teller’s check (drawn on a credit union in a midwestern state).

As far as I am concerned, when the rule says don’t disburse uncleared funds, it means exactly that. That does not mean you can disburse funds (from sources that are dubious at best) that are “available but subject to chargeback”.

PS: The scammers can be quite thorough. In my case, the name of a legitimate local company was used as the “debtor”, bills of sale and invoices establishing the amount “due”, a website for the “creditor”, etc. This operation is much more professional than the typical Nigerian email scam.

It still didn’t pass the smell test, though.

cgage is correct. Most firms have a policy against dispersing funds that have not “cleared.” That does not mean deposited and available, clearing occurs when funds pass between the bank in which the check was deposited and the bank upon which the check was drawn.