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Front Page - Friday, September 8, 2017

Scammers are targeting Chattanooga law firms

The Chattanooga Bar Association is warning its members about a new scam targeting Chattanooga law firms. The con has worked twice, according to a local banker.

The details of the scam are as follows:

The “prospective client” and scammer goes by different business entities. In one case, they went by Custom Machine, Inc., which is said to be out of state and needing local representation.

The scammer calls to say they have a local Chattanooga company that owes them money for goods they have already supplied. Both cases have been Riverside Machine Company, which is a legitimate company but in no way involved in the scam.

The scammer then says they would like the local law firm to represent them in the matter, as they know the lay of the land better in Chattanooga and the scammer needs to quickly resolve the issue so they can pay their suppliers.

They are willing to pay in several ways, whether by retainer or percentage collected, and just need to be notified as to when the Chattanooga company will be notified of legal action.

Conveniently, close to the time in which the Chattanooga company is to be notified, the scammer calls to say the Chattanooga company knows a local attorney is involved and will be sending a partial payment to the attorney.

The scammer says the attorney is welcome to keep a portion of the money as partial payment until the rest of the debt can be collected within about a months’ time.

A courier delivers a fraudulent cashier’s check to the local attorney in the neighborhood of $100,000 along with a letter on fraudulent Riverside Machine letterhead that looks legitimate – right down to the actual signature of the company’s president – stating that the funds are for payment to the scammer.

The local attorney is then sent another legitimate-looking letter from the scammer stating that due to time restraints, the local attorney is to deposit the funds into their IOLTA account before wiring the funds “ASAP” via international wire directly to the scammer’s “supplier.”

The cashier’s check then comes back fraudulent after the money has already been sent via wire out of the country.

Source: Chattanooga Bar Association