Royal Oak attorney Frank Cusumano Jr. has asked us to warn the legal community of new email scam targeting IOLTAs.
The scam begins like most others, with an email from someone outside of Michigan looking for local assistance in collecting on a sizeable note — in this case $480,000. The difference is that due diligence will find that the parties in the “dispute” are real entities and people.
In Cusumano’s case, the debtor is a local electrical company in Ypsilanti, A.F. Smith Electric, which is a real company. The creditor, a man named Ronald Nalewak, is a real person, too. The problem: there’s been no transaction nor dispute between the two.
The scam works like many others:
- “Nalewak” asks if he can use the attorney’s name to try scare the other side into paying (which, of course, won’t happen because the dispute isn’t real), and if he can’t, he’ll bring the attorney into the case.
- The attorney signs him to a fee agreement, and he sends two checks: one for the retainer fee, and a second check for $130,000 from the Bank of Nova Scotia made out in the attorney’s name. The checks came from a Canadian address.
- The tipster in this case asked for a completed W-9 form, and alerted Nalewak that when the check clears, he’ll mail it to the address in Pennsylvania, where Nalewak supposedly lives.
- In this case, the tipster also asked for some clarification as to how Nalewak wanted to handle the balance of the payment and his involvement at this stage. In response, Nalewak asked him to wire the money to an account in Texas.
Cusumano thought something was off about the whole thing.
“If somebody owes $480,000, and it’s accruing interest of $111 a day, people don’t just say, ‘They’ll pay me when they get a chance,’” he said.
He also was concerned about the checks coming from the Canadian address, and broken English in the cover letter that was in the envelope with the checks. He tried contacting Nalewak about the whereabouts of the requested documents, but Nalewak said he was in Japan assisting the humanitarian effort.
After finding too much inconsistency for his liking, Cusumano contacted A.F. Smith, the alleged defendant, to inquire about the debt. The person at the electric company said they’ve been contacted by at least four lawyers in the last week about the scam.
He then contacted Wells Fargo, holder of the Texas account, which is doing a fraud investigation.
While some might consider it foolish to respond to such an emailed opportunity in the first place, Cusumano said it’s a pretty common method of first contact with a potential client.
“I always ask how they found me,” he said. “I didn’t get an answer to that. But in collection matters, people do send you emails if you have advertisements online that you do collection work in Southeastern Michigan.”
Cusumano hasn’t found much help from law enforcement here or in Canada. One Canadian Mountie essentially told him that hunting these people is futile because they cut off communication if you ask too many questions.
Fortunately, Cusumano didn’t get caught up in the scam, and hopes no one else does either.
“Sooner or later, he’s going to get somebody,” he said.
Don’t let it be you.