Houston lawyer loses big in Internet scam

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by Jeff McShan / 11 News

khou.com

Posted on March 12, 2010 at 12:05 AM

Updated Friday, Mar 12 at 11:23 AM

HOUSTON -- A successful Houston lawyer says he fell for an elaborate Internet scam that ended up costing him $182,500.

Houston attorney Richard T. Howell, a law partner at Buckley, White, Castaneda and Howell, says he would rather not be in the news, because what happened to him is embarrassing to say the least. But hoping others won’t fall into the same trap, Howell decided to sit down and talk with 11 News.

“I’ve had to put a second lien on my house. It has been an extremely stressful time for both my wife and I,” Howell said.

It all began when Howell received an e-mail from a company, 8,000 miles away, that wanted him to legally pursue four of its U.S. customers who owed it money.

“The e-mail said this is a Hong Kong company and we would like to retain you as counsel,” Howell said.  “And they gave me the customers names for a total debt of about $4 million.”

The Hong Kong company he was corresponding with had a Web site, and its customers were all legitimate U.S. companies with Web sites, Howell said.

“I mean in a perfect world, I guess I could have said, ‘Come over here and meet me in Houston.’ But I have met tons of my clients -- a number of my clients I’ve never met that are out of state, or out of the country. I mean, that is not unusual at all,” Howell said.

So when Dallas attorney Raul Loya received a similar e-mail, he said he was interested, too.

“They need someone to help recoup their losses in the U.S.,” Loya sad.

Both lawyers signed contracts with their overseas client and exchanged e-mails and documentation regarding the debt that was involved.

“It made me absolutely believe this was the real deal,” Howell said.

“It’s surprising the links they went to to perpetrate the scam,” Loya said.

But before the lawyers actually had to do anything, an official check -- like a cashier's-type check -- from Citibank arrived in express mail.

Checks that were written for more than $300,0000 arrived at the office.

“And it's written out to us and it looks like a fairly legitimate check,” Loya said.

The Hong Kong company said the money was from some of its clients who were finally trying to pay off their debt.

It asked the attorneys to deposit the checks, take out their fees, and then wire them the difference.

Howell, not wanting to unethically hold on to his client’s money, went to the bank and deposited the check and had the bank wire the difference of $182,500 to Hong Kong.

“I mean if they had told me this wasn't the same as cash I would have never done this,” said Howell.

Well you probably guessed what happened next. The checks were fraudulent, and Howell is angry.

Not so much with the suspects, but with the banks he has been dealing with.

Now out of $182,000, he has filed a lawsuit against Citibank and Sterling bank, alleging the institutions were negligent.

Howell played back an automated message from his bank stating the check went through.

Howell says around the country banks have been warned by what's called the Comptroller of the Currency Administrator; telling them about fraudulent cashier-type checks and the risks involved.

In a memo from the administrator, there are numerous recommendations to banks that include "methods of identifying potentially suspicious items, and criteria for placing holds on deposits."

It also references additional training needed for tellers.

Howell says a Secret Service agent recently told him the agency is currently investigating similar cases totaling $23 million.

“I mean banks should be operating differently,” Howell said.

Citibank denies the allegations against it, but said it cannot comment further because of the ongoing litigation.

As for the Dallas attorney, he says he was warned and didn’t deposit the check

“It's as bogus as a $3 bill,” Loya said.

 

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