Dewey, Cheatem & Howe: Law Firms Losing Tens of Millions In Nigerian Scams

We have previously discussed how it is remarkable that people still fall for Nigerian Internet scams and fork over much of their life savings — allowing these criminals to thrive on the one percent of gullible people. Now it appears that these gullible parties include law firms which have forked over millions to Nigerian con men. The most common involves a con where a man asks a firm for help in a settlement negotiation or real estate deal. He offers the law firm a hefty cashier’s check to put in its escrow account. It is only after the firm pays out on part of the check that they discovered it is bogus. At least 600 attorneys and firms have fallen victim to the scam with losses exceeding $31 million.

One such firm is Minnesota-based law firm, Milavetz Gallop & Milavetz, says in a lawsuit which has sued Wells Fargo for alleging assuring them that the check was valid. The firm lost nearly $400,000.

Other firms have sued other banks for the same reason, though one such lawsuit by Greenberg Trager & Herbst was dismissed last year by the New York Court of Appeals. The court put the primary blame on the law firm for not doing due diligence on the identity and veracity of its clients. In that case, $197,750 was collected by Greenberg, Trager and Herbst from the client. After it was told by HSBC that the check had “cleared,” it took a $10,000 fee and wired the rest to the client. While I can see the point of the firm in accusing the bank of the responsibility, the Court found that the reliance on the notice of the check “clearing” was negligent. The notice, it held, is merely

an ambiguous remark that may have been intended to mean only that the amount of the check was available (as indeed it was) in GTH’s account. Reliance on this statement as assurance that final settlement had occurred was, under the circumstances here, unreasonable as a matter of law.

While I am surprised that the law firms do not do more to establish the identity of the client, many lawyers would take an assurance that a cashier’s check had cleared as sufficient confirmation. After all, that would suggest that the money had been transferred.

As I have stated before, I fail to understand why we cannot use our expanded abilities at computer forensics to arrest these con artists. I realize that Nigeria remains a hopelessly corrupt country, but it is dependent on Western aid and financial institutions.

In the meantime, one Texas attorney is being accused of being the con man in a multi-million dollar fraud.. Anthony Chiofalo is accused by his company of using his position as in-house general counsel to create a series of fake legal representation contracts replete with fake lawyers (with fake bios) and fake firm addresses. Tadano America Corp. says that he was able to siphon off millions that were sent to an account under Chiofalo’s control.

Source: Courthouse News

34 thoughts on “Dewey, Cheatem & Howe: Law Firms Losing Tens of Millions In Nigerian Scams”

  1. Tony C:

    Innumeracy is, to me, a lack of familiarity with aspects of mathematics relevant to accurately solving a problem which is at least partly of mathematics. From Richard A. Posner, “How Judges Think,” Harvard University Press, 2008, page 11, “…preconceptions are best understood, we shall see, with the aid of Bayesian decision theory.” Posner’s book may be enlightening to those who hold dear to the notion that frequentist statistical methods are optimal for unriddling the indeterminacy of biology.

    Innumeracy may manifest itself profoundly in the efforts of traditional biologists to mathematically solve deep biological problems with reductionist methodologies. As theoretical biologists other than myself have noted (example, Robert Rosen [1934-1998], in “Fundamentals of Measurement and Representation of Natural Systems,” Elsevier North-Holland, 1978), the most profound mathematical problems in biology are relational, not reductionist.

    Rosen’s aforementioned “Fundamentals…Systems” has long been out of print, I have one of the about-two-hundred extant copies of which I am aware. Fortunately, for the sake of the accessible history of science, Robert Rosen’s daughter, Judith, was able to arrange for the printing of Robert Rosen, “Anticipatory Systems: Philosophical, Mathematical and Methodological Foundations, Second Edition,” Springer, 2012.

    I am not alone in doing the work of relational biology. A Google search turned up a paper by Donald C. Mikulecky, Senior Fellow in the Center for the Study of Biological Complexity at Virginia Commonwealth University, “Even more than life itself: beyond complexity”…

    To quote one sentence from the abstract of Even more than life itself: beyond complexity, “The role of the human component in the whole earth system is the goal of the analysis.”

    My work profoundly transcends traditional science methodology of “Cartesian reductionism.” To keep up with me in mathematics, I deem it necessary to be proficient in the ways of high-dimension-space, complex-variable, relational tensor calculus.

    To get a sense of a person’s mathematical competence, I may ask the person, “What is the square root of 4?” Many college graduates whom I have asked that question have not been able to tell me that the square root of 4 is 2.

    Far fewer college graduates have been able to accurately tell me that, “What is the square root of 4?” is a false question, because every number has two square roots.

    Fewer yet have been able to tell me the two square roots of -4. A very few have been able to describe accurately how to find the square roots of complex-variable hyperspace numbers.

    High-dimension-space complex-variable tensor calculus transcends the domain of definition of numerically analytic solutions.

    To me, “mathematical competence” and “innumeracy” are akin to inverse functions.

  2. In response to the usual “here comes me” often used principle at JT’s, here comes another one:

    mentioned earlier, in answer to a discussion on young american men’s thoughts that some felt that Sweden had invented porno, that the first erotic art exhibition was in 1968 at Lund’s Könsthall, and arranged by the American couple Phyllis and Eberhard Kronhausen. An exhibition which I had seen then.

    Further, let me add this excerpt from the self-bio from their blog with a connection to the breakthrough of erotic material in the USA. Reading further in the bio is recommended. Note their promo of new book: “Staying Sane in a Crazy World”, a work which may have some value to the readers. (Haven’t read it, and can not say if this is by use of erotic material, psychotherapy with buddhistic base or other sources in uncertain.)


    “Another large breakthrough against censorship and for the recognition of fine erotic art, were our first exhibitions of erotic fine art in several, large public, Scandinavian museums, from ca. 1968-1970, and in a private Museum
    of Erotic Art, in San Francisco, from 1971 to 1973.

    We also arranged for the importation by Grove Press of the first frankly erotic Swedish film of indisputable artistic merit, “I am Curious Yellow.”
    This, in turn, prepared the way—for better or for worse, depending on one’s point of view—for the public showing of other, frankly erotic, as well as outright pornographic films (as, e.g., “Deep Throat” and “The Devil in Miss Jones,” to mention just two of the best known
    of these frankly pornographic movies).


    Considering how it has developed in extending the permitted limits of our minds, our rights to use them as we wish, and the obvious impact on our society (watch any talk show on TV, etc.) then felt that providing this link to this group of civil rights defenders and simply citizens of this America, was worth doing.

    For those who can, remember your youth and those bygone days.
    For some, don’t read this comment. Adult material. Pun intended.

  3. @Brian: Do you even know what “innumeracy” means? It has nothing to do with the scams, the scams are a result of believing that a well forged cashier’s check is the equivalent of cash. It does not require any sense of numbers, proportions, or require any mental arithmetic.

  4. Dr. Harris, what a fascinating comment! I have to read it many times, and I will — just not now.

    * * Remember-note to myself: “Contingency theory of history”

    Dr. Harris, you say: “So, why did those lawyers and law firms mess up with respect to the scams mentioned? Could a consequence of the difficulty of learning cases and procedures well enough to practice law be a practicable incapacity to learn enough serious mathematics to be able to avoid being functionally innumerate?”

    I have a friend who once asked, “Why are the courts all inferentially illiterate?”

    This relates back to my often-given advice to lay-persons who end up in court: “Facts do not equal evidence; Conclusions do not equal decisions; processes do not equal ‘due process’ by a longshot; and there is no requirement that anything make sense OR be able to be replicated.”

    And in this system, the lawyers are the teachers of the strange science. And their students can never learn anything useful!

  5. Keyboarding error?

    (Columbia U. ress, 1991)

    was intended to read:

    (Columbia U. Press, 1991)

    unless an unintended smiley happens again, in which case…

    How about, “Columbia University Press, 1991)…

  6. On a bookshelf within three feet of the computer I am using to write this are four adjacent books: S. I. Hayakawa, “Language in Thought and Action” (Harcourt Brace, 1949); Robert Rosen, “Life Itself” (Columbia U. :Press, 1991); Alice Miller, “Thou Shalt Not Be Aware,” Hildegard & Hunter Hannum, tr. (New American LIbrary, 1984); and John Allen Paulos, “Innumeracy: Mathematical Illiteracy and Its Consequences” (Hill & Wang, 1988).

    On the shelf above those four books is my all-time-favorite-to-date textbook on the ways of innumeracy and law and lawyers. It is Prosser and Keeton on Torts, Fifth Edition (West, 1984). To date, my most favorite illustration of innumeracy in Prosser and Keeton is to be found on page 264, to wit:

    “Proximate cause”—in itself an unfortunate term—is merely the limitation which the courts have placed upon the actor’s responsibility for the consequences of the actor’s conduct. In a philosophical sense, the consequences of an act go forward to eternity, and the causes of an event go back to the dawn of human events and beyond. But any attempt to impose responsibility upon such a basis would result in infinite liability for all wrongful acts and would “set society on edge and fill the courts with endless litigation.” (Mitchell, J., in North v. Johnson, 1894, 58 Minn. 242, 59 N.W. 1012.)

    Time for a hypothetical?

    Suppose I am visiting a friend in the friend’s home, and I somehow wrongfully knock a $10 portable radio off a table and the radio is damaged beyond repair. Suppose my friend’s time for replacing the radio is worth $90, so the total loss is $100. Suppose the complete sequence of causal events which resulted in the radio being damaged beyond repair and which go back to the dawn of human events and beyond is a grand total of 100,000 events, each of which contributed equally to the radio becoming damaged beyond repair, and suppose my knocking the radio off the table is only one of the 100,000 causal events?

    I suppose (another hypothetical?) that one of my main character defects is a profound deficiency in innumeracy. Being innumeracy-deficient, I can readily compute my actual share of the causal sequence which led to the radio being damaged beyond repair as the damages ($100) times my share of the total causal chain (1 part in 100,000) so my innumeracy-deficient liability will be $100 divided by 100,000, or 1 mil. In a practical, not hypothetical, case, I would be willing to pay ten times my actual liability out of simple generosity, or 1 cent.

    What do I find to plausibly be the most terrible wrongful act in “Mitchell, J., in North v. Johnson, 1894, 58 Minn. 242, 59 N.W. 1012”? It is the insanely ludicrous mathematical nonsense that a wrongful act having a finite consequence ($100 in the above hypothetical damaged radio) which has an effectively huge sequence of necessary causal events would result in infinite, rather than negligible, liability in terms of the proximate cause actor’s responsibility for a $100 loss.

    The innumeracy is vastly more absurd regarding the consequences of the act of the proximate cause actor. At the time of the proximate cause actor’s being assigned liability, essentially the whole of the consequences of the actor’s act which go forward to eternity have yet to happen; there is no way to determine whether those consequences which have yet to happen will be costs or benefits; there is no way to determine whether the radio being damaged beyond repair will, or will not, result in the owner of the radio becoming stunningly wealthy as a very direct consequence of making the trip to a store to get a replacement radio.

    Who can determine whether the radio being damaged beyond repair will end up being a remarkable benefit and not at all a liability?

    About that aforementioned book by Robert Rosen (1934-1998); he was a theoretical biologist. I, having B.S. and Ph.D. degrees in bioengineering and being licensed by the State of Wisconsin as a Registered Professional Engineer, am both a theoretical and a practicable biologist.

    I regard human law as a problem in both theoretical and practical biology, and, in accord with my license and its responsibilities work away at unriddling the biological enigma of adversarial law as plausibly being its own best adversary.

    I regard human law as a biological phenomenon because I regard all mammals as biological phenomena and all activities of mammals as biological phenomena, and, as a biological phenomenon, human systems of law are inextricably within the proper purview of bioengineering.

    I cannot be anonymous here without violating the provisions of my license, which I find requires that I hold public safety paramount, work in-and only in- areas of my professional competence, and do both of those without deception.

    As a registered professional engineer, I find the above-cited case law in Prosser and Keeton on Torts, 5th Ed., to be devastatingly deceptive.

    So, why did those lawyers and law firms mess up with respect to the scams mentioned? Could a consequence of the difficulty of learning cases and procedures well enough to practice law be a practicable incapacity to learn enough serious mathematics to be able to avoid being functionally innumerate?

    J. Brian Harris, Ph.D., P.E., NSPE
    Wisconsin Registered Professional Engineer No. 34106-6
    Life Member, Institute of Electrical and Electronics Engineers
    National Society of Professional Engineers
    Wisconsin Society of Professional Engineers
    Biomedical Engineering Society
    Institute of Biological Engineering
    Association for Psychological Science

  7. Malisha,

    Been busy. but now you knock us all down. But guess it is what yóu all see every week on some series on TV. huh???

    Was gonna say, keep it for a TV series, a never-ending one.
    But on second thought, it might be dangerous to do that.
    Place it in Nigeria or London would be safer instead.

    We could use her for Sec of State when Billary leaves.

    Seems like she might even be Presidential material.

    If she can lie in front of the fixed judge, then why not like Obama did in front of SCOTUS who swore him in.

    Both judges are bought, so same-same.

    The only problem is you are proving my assumption.
    That every little rat hole in America the beautiful has lots of local talent—–for doing evil things. And there are many who want to share the booty.

    And most of those are supposed to be legit.

    How do you do this? Are you masochist or Don Quixote with real windmills.

    And last comment, who needs the mob when we got such unorganized talent?

    It’s two AM, and my fever is still burning. Gimme the dice.

  8. Idealist, I know the defrauded person. The wife of her daughter’s father (try that for anthropological kinship links) is such a well-known fraud that there are several Los Angeles private detectives who “already have a file” on her and who say, “It doesn’t matter how many times you bust her because she’s got an insider everywhere.” She has a federal congressperson, about half a dozen LAPD cops, a judge in Riverside, a judge in Inglenook (I think that’s the name of the place), and a partridge in a pear tree. If you stand still and throw a stone, you’ll hit someone who has been paid off very handsomely for helping her with one or another of her scams. One of her favorite things is to get the cops to fax her something under some guise, and then she substitutes pages 2, 3, and 4 of the fax, and BINGO, she has a fax from the police saying whatever it is she is selling as “true.” She has bank personnel making calls for her FROM THE BANK’S PHONES on Saturdays. She has the Sheriff handing money back to the banks when it has been levied after a whole court process and a writ of execution. So the writ goes from court, to the sheriff, and the sheriff goes to the bank, and gets the money, and her folks get the sheriff to put the money back in the bank.

    It’s not just that the scams work; it’s that whoever identifies them and tries to bust her gets delegitimized BY THE COPS and then, if they ever call for any kind of assistance again, or report anything to the police again, they’re on a list of people who have previously made false allegations, so nothing they say is investigated, ever again.

    Pretty slick little scam, and totally supported by the public. Unsinkable. And she has gone bankrupt about five times in the past decade and a couple of those times, the bankruptcy court has declared her to be fraudulent and said she was not permitted to file again, and then she files again, and it doesn’t matter. She’s not scared of anything; she will steal anything; she will buy any official; she lives high on the hog; and she sends secret messages to any judge she likes and most of them bow down and do her bidding. It’s pretty weird. You can see the evidence in black and white and it doesn’t mean a thing.

    She doesn’t even need a PO Box in Nigeria.

  9. Well, the lawyers for the corps have made some money by selling boiler plate as custom wares. So they sell it as important. And then the company experience from avoiding or rapidly defeating cheaply the suits brought against them does show it to be cheaper.

    But by all means, do ask. See what you get

    Every accept is bound to some IP, is my guess, like a signature. but laws restricting this in “distance sales” also applicable in some jurisdictions, thank goodness. BTW

  10. @idealist: Let us ask the lawyers; does it make any difference if you click “Accept?”

    Somehow I doubt a button click is legally binding in any way.

  11. AY,
    banks make many mistakes, but pay for very few of them. The UCC can be a minefield for attorneys let alone banksters.

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