Much attention in the press recently has focused on encouraging foreign investors to set up businesses in the United States through the EB-5 Investor Visa program, but there has been little attention to a related phenomenon: “Man-in-the-middle” fraud schemes targeting immigration lawyers who handle EB-5 cases. In these cases, the scam artists seek to victimize immigration lawyers by using counterfeit checks to “invest” in EB-5 businesses.
Here’s how the fraud scheme works: An attorney receives an email from a person purporting to be a wealthy foreigner who wants to obtain an EB-5 immigrant visa by investing in a business in the United States. The person asks for an attorney-client fee agreement and is anxious to know the attorney’s fee. The person also says that he will send a check (often a cashier’s check) for the attorney’s fee, plus the full amount of the investment.
The check that arrives looks like a real check and may have the name of a real company and real account number on it; it may even appear to be a valid cashier’s check. The attorney deposits the check, which initially results in a large balance appearing in the attorney’s trust account. Shortly thereafter, the client directs the attorney to wire some or all of the funds elsewhere, typically to an overseas account. Later, the attorney learns that the check was phony, and the attorney now must repay the bank for the wired funds.
This scheme works because the attorney’s bank merely acts as the agent of the owner of a check for the purpose of collecting the check; the bank may provide provisional credit on a deposited item, pending final settlement or payment of the check, but if the original check turns out to be phony, the bank will demand repayment from the depositor (in this case, the attorney). It may take months for a US bank to determine that a check from a foreign country is phony. If an immigration lawyer accepts a large check from a client, deposits the check, and then wires the provisional funds back to the client for the client to use for other purposes, the lawyer may end up being victimized if the check turns out to be fraudulent.
Banks around the United States are currently publishing customer service articles describing similar schemes that have victimized business and divorce lawyers, but now the fraudsters are attempting to use the EB-5 program as a means of targeting immigration lawyers. Attorneys are advised to be wary of anxious EB-5 investors who want to send large checks directly to the attorney for deposit in the attorney’s trust account, and who later direct the attorney to wire the money elsewhere. Any attorney who suspects that such a scheme is fraudulent should contact the bank or law enforcement for assistance.
My thanks to Jason Feeken of Wells Fargo Bank for assistance in writing this blog post; Jason has written similar articles about fraud schemes targeting lawyers who practice divorce or business law.
See the original article here: EB-5 Investor Scams Target Immigration Lawyers