Biglaw

Biglaw Firm Duped Into Wiring Money To Scam Account Loses $2.5 Million In Cyber Breach

Even the biggest of Biglaw behemoths can be victimized by fraudsters without proper precautions.

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It’s not just computer illiterate grannies who are conned into sending large sums of money to sophisticated internet scammers — it’s Biglaw firms too. This time, the largest law firm in the world fell prey to such a scam, wiring millions of dollars of client funds to a fraudulent account instead of closing a deal as planned.

Back in 2017, Dentons Canada was involved in a real estate transaction with Timbercreek Mortgage Servicing Inc., but when the time came to transfer about $2.52 million from the firm’s trust account to its client, they ran into some pretty big problems, and now the firm is stuck in court trying to an insurance company to cover its losses. Here are the details on what happened next, from American Lawyer:

Before the transfer, however, Dentons received emails from people who appeared to be affiliated with Timbercreek. The emails indicated that one of Timbercreek’s accounts was subject to an audit and asked for Dentons to send the money to an international account in Hong Kong, held by a third-party called Yiguangnian Trade Co. Ltd., according to Brown’s decision.

Following that, the Dentons side attempted to verify, leaving a voicemail at Timbercreek and seeking letters of authorization from the mortgage servicer and the Yiguangnian entity. Although Dentons didn’t receive a phone call back, it did receive what appeared to be authorization letters from Timbercreek and Yiguangnian. The law firm then went ahead with the transfer, sending the $2.52 million to the Hong Kong account, according to the court ruling.

Several weeks passed, and Timbercreek wanted to know what happened to its money. That’s when an associate realized that millions of dollars had been sent to a scam account. While Dentons was able to recoup a few hundred thousand dollars on its own, they’re relying on Trisura Guarantee Insurance Co. to cover the rest. Unfortunately, Trisura is denying coverage because they claim this sort of situation doesn’t fall under the computer fraud rider to the firm’s policy.

As a result of this massive scam, Dentons is making sure that all of its employees and attorneys participate in “extensive [cybersecurity] training.” Here’s more from Dentons Canada spokeswoman Neetisha Seenundun: “The training is updated and repeated annually. Participation is mandatory by all Dentons partners and employees. Although no firm policies were breached, we have however adjusted the training to highlight the hallmarks of this kind of fraud.”

This must be a little embarassing for Dentons, but even the biggest of Biglaw behemoths can be victimized by fraudsters without proper precautions. Be careful out there, lawyers. The internet is a scary place.

Dentons Lawyer Wired $2.5 Million to Scam Bank Account in Elaborate Con [American Lawyer]

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Staci ZaretskyStaci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.

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