Showing posts with label fraud. Show all posts
Showing posts with label fraud. Show all posts

Thursday, February 6, 2014

Online Oscar "Replica" Seller in Texas Sued for Counterfeiting and Fraud

The Hollywood Reporter describes a lawsuit filed yesterday against Jaime De La Rosa, a Texas individual who was selling fake Oscar statuettes online.

The Academy of Motion Picture Arts and Sciences (AMPAS) alleges that it first became aware of the existence of these "counterfeit replica" statuettes in November 2013, when it found an eBay listing for an "Academy Award Hollywood Metal Movie Acting Trophy Prop Replica" selling for $850.00.

AMPAS then contacted De La Rosa, who signed a sworn Declaration attesting that he had made seven statuettes, selling six and surrendering one to the Academy.

AMPAS now claims that it has identified four additional statuettes sold by De La Rosa on eBay and another sold by him on Etsy, making De La Rosa's Declaration seemingly false.

AMPAS has filed other lawsuits attempting to protect its intellectual property rights in the Oscar statuettes.  For example, AMPAS sued a chocolatier in North Hollywood who made chocolate figurines.

Officially named the Academy Award of Merit, the Oscar statuette is the most recognized trophy in the world, and has stood on the mantels of the greatest filmmakers in history since 1929.

Since the initial Academy Awards banquet began on May 16, 1929, 2,809 Oscar statuettes have been presented. Each January, additional new golden statuettes are cast, molded, polished and buffed by R.S. Owens & Company, the Chicago-based awards manufacturer retained by the Academy since 1982.  Oscar stands 13 1/2 inches tall and weighs in at 8 1/2 pounds.

On its website, AMPAS notes that the Academy, as the copyright owner of the Academy’s “Oscar” statuette, and owner of its trademarks and service marks, including “OSCAR®,” “OSCARS®,” “ACADEMY AWARD®,” “ACADEMY AWARDS®,” “OSCAR NIGHT®,” “A.M.P.A.S.®” and the federally registered “Oscar” design mark, is required to protect its properties against unauthorized uses and infringements.

Wednesday, September 11, 2013

Home Depot Faces Class Action Suit Filed by Accused Shoplifters

The tongue-in-cheek 1987 Smiths' song "Shoplifters of the World Unite" urges petty thieves to get their act together and take over the world. Some accused shoplifters in California may be taking that message to heart.

According to a class action complaint filed by lead plaintiff Mr. Jimin Chen in California Superior Court last week, Home Depot's Florida-based lawyers extorted millions of dollars in settlements from accused shoplifters, by fraudulently representing that the home improvement giant would press criminal charges and bring civil claims, without any intention of ever doing so.

Specifically, the lead plaintiff alleges that he and a friend were shopping at a local California Home Depot in early June.  Before Chen's $1,445.90 purchase of a large quantity of lumber, he and his friend casually put on a pair of $3.99 work gloves.  Before the purchase was rung up by cashiers, they removed the gloves and placed them on the top of the lumber.  The checkout personnel failed to scan the gloves.

After he paid for the lumber, but before he left the store, Chen alleges he was suddenly taken into custody by a Home Depot security guard who accused him of trying to shoplift the gloves.

Chen claims he suffered an asthma attack and was handcuffed and kept in custody for as much as 30 minutes.  The police were never called and no charges were filed.  Chen was asked by Home Depot's personnel to sign an agreement that would keep Chen from shopping at any Home Depot for 90 days. Chen signed the agreement and presumably was happy to oblige. The agreement also contained a general "notice" that purported to warn the accused thief that he might face further charges, or civil demands.

Soon after the incident, Chen received a formal letter from a Florida law firm, demanding payment of $350 as a civil settlement of possible ramifications from the incident within 20 days.  When he failed to respond, a follow-up letter from the lawyers allegedly upped the demand to $625.

Instead of paying, Chen filed the class action lawsuit.  Chen alleges that in 4 years, Home Depot hasn't sued a single person under California's anti-shoplifting law, which provides that merchants are entitled to recover the cost of stolen items, up to a total value of $500.

Rather, he alleges that Home Depot illegally created a "profit center" out of a scheme to defraud frightened customers/alleged shoplifters.

It is worth noting that there were no clear damages in Chen's incident, as the two pair of gloves were recovered before Chen left the store, in any event.  There is no clear indication why Home Depot would be entitled to any civil recovery from Chen, much less $625.

The suit further alleges that Home Depot and its lawyers were capitalizing on the fact that thousands of accused shoplifters would be terrified by the demand letters and would pay up, instead of facing a lawsuit and/or criminal prosecution.

It is also worth noting that it is a crime for someone to overtly threaten to file criminal charges in exchange for compensation. Home Depot's rights and remedies for attempted petit larceny were to press criminal charges.

Needless to say, the suit has created a public relations embarrassment for Home Depot, which has reportedly responded by saying that it disagrees that the "general practice of civil demands is unlawful."

Sunday, August 25, 2013

Does Donald Trump's Branding Empire Go Too Far?

Billionaire real estate developer Donald Trump is considered one of the most successful tycoons in America, particularly when it comes to branding and self-promotion.

Trump coined the quip "YOU'RE FIRED" on his hit network television show The Apprentice, which he unsuccessfully tried to trademark.

But, according to New York's Attorney General Eric Schneiderman, Trump went too far when branding his "Trump University," and committed outright fraud on those who invested in attending the costly seminars.

FoxNews is reporting that the real estate mogul's "Trump University" duped students into paying as much as $35,000 to attend the 3-day seminar, but quickly discovered it was a sham.

"Trump University engaged in deception at every stage of consumers' advancement through costly programs and caused real financial harm," Schneiderman said. "Trump University, with Donald Trump's knowledge and participation, relied on Trump's name recognition and celebrity status to take advantage of consumers who believed in the Trump brand."

According to official court papers, Schneiderman is suing the program, as well as Trump personally as the university chairman, and the former president of the university, in New York State Supreme Court in Manhattan.  He accuses them each of engaging in persistent fraud, illegal and deceptive conduct and violating federal state consumer protection laws.  The $40 million the suit demands would be distributed as restitution to consumers.

New York State Education Department officials had ordered Trump to change the name of his enterprise years ago, saying it lacked an education license and didn't meet the legal definitions of a university.  In 2011 it was renamed the Trump Entrepreneur Initiative, but it has been repeatedly accused by consumers in several civil lawsuits of failing to fulfill its advertised claims.

True to form, Donald Trump shot back, denying the allegations and claiming the Attorney General's lawsuit is "politically motivated," and tantamount to "extortion."

Monday, May 13, 2013

Vultures Still Circling After the Boston Marathon Bombing

Now that the dust has just begun to settle on the horrific Boston Marathon terrorist attack of April 15, 2013, and the perpetrators are either buried or in custody, there is another sad aftermath:  consequences from those cashing in on the victims' suffering by exploiting Intellectual Property through fraud and abuse.

For example, hundreds of fake Boston Marathon-related scams popped up purporting to help the victims, requiring authorities, including the IRS, to issue stern warnings.

Time magazine notes that hundreds of Boston Marathon-themed domain names were quickly registered and put up for auction within hours of the tragedy's unfolding.

Finally, gruesome and unlicensed photos were stolen from Getty images and the Associated Press, and sold on in unauthorized e-books.  After an outcry, Amazon pulled the e-books.

The predictably sad repeat of these transparently opportunistic activities after recent tragedies has led some to consider whether anti-fraud laws should be enhanced to include stiffer penalties for fraudulent activities after a mass casualty occurs.

Monday, April 29, 2013

Internet Scammers Targeting Lawyers

Attorneys in the United States, particularly solo practitioners and lawyers with small firms, are apparently falling prey to sophisticated international Internet scams that can have severe consequences, financial and otherwise, the California Bar Association has noted in an Alert.

To date, these scams have been more prevalent among, although not exclusive to, collection and commercial lawyers, mainly because these practice areas make it easier for those initiating the scams to make them appear legitimate. However, such frauds have affected lawyers working in family law and other practice areas, as well.

The fraudsters perpetrating the scams engage in the following conduct:

1.  The lawyer receives what appears to be a legitimate solicitation e-mail from a prospective client.  The client may be a company or an individual. The e-mail sounds something like this:  "We are a media publishing company in Japan. We have a breach of intellectual property agreement matter in your jurisdiction, we can forward you the agreement and other party information for your review to enable you run a conflict check."  The client will be willing to forward seemingly legitimate incorporation documents.

2.  The lawyer and client discuss a fee agreement by e-mail.  Most commonly, the client will offer that the attorney may keep a certain sum in exchange for collecting on an unpaid debt.  The lawyer signs the agreement, creating an ostensible attorney-client relationship.

3.  The lawyer then receives a "congratulatory" e-mail from the new client announcing that they have received a settlement offer from the debtor, and that all the lawyer needs to do is deposit the settlement check and forward the proceeds of settlement, minus the lawyer's fees and expenses.

4.  The lawyer quickly receives in the mail what appears to be a valid paper check from a reputable bank, which is deposited into the lawyer's trust account.

5.  The client then demands an immediate wire distribution of the settlement proceeds (nearly always to a foreign bank).

6.  The lawyer then wires the proceeds to the client from the trust account, as requested.

7. By that point, the lawyer's bank has discovered that the paper check is fraudulent and it is returned unpaid.  By this time, the scammer is long gone, and the lawyer's trust account is overdrawn by the amount of the fraudulent check.

This chain of events leaves the victimized lawyer in a vulnerable position.  The lawyer cannot easily press criminal charges, because of possible fear of violating client confidences.  Second, the identity of the fraudster isn't even clear.

Further, the lawyer cannot easily recoup his losses.  Malpractice insurers may not qualify the lost sum as "damages" from professional negligence.

The California Bar Association notes that, in choosing clients and accepting to represent them, it is better to err on the side of caution.  Hitting the "delete" button may be the best course of action when receiving one of these "too good to be true" new client offers.

Tuesday, August 14, 2012

Internet Scammers Target Sophisticated Law Firms

A creative and sophisticated Internet scam has targeted sophisticated law firms.

Indeed, the Gioconda Law Group PLLC was targeted by this type of scam artist, but (thankfully) we were able to recognize it very quickly.

It works like this:  A potential foreign client that appears to be legitimate will send an unsolicited e-mail inquiry seeking legal assistance in collecting a relatively modest commercial debt that it claims is owed to them.

For example, a Taiwanese company that supplies parts and equipment to electronics vendors will contact a New York law firm, claiming that it sold $1.2M worth of goods to a New York-based electronics business.

The company will provide a variety of written documentation to the law firm that appears totally legitimate, including signed contracts, supply agreements, purchase orders and invoices.

The company will gladly sign a formal lawyer's engagement letter and agree to pay the lawyer for his time and effort in seeking to collect on the debt.

The company will eventually send an e-mail to the lawyer saying, "Great news!  The debtor has agreed to pay for the goods and send you the settlement check for processing.  Please deduct your fee and send us the remainder by international wire transfer."

If the lawyer doesn't catch on by then, he may indeed deposit the settlement check, and wire the funds to the company.

However, the check he deposits is counterfeit, and the law firm is left holding the bag for the missing funds that it wired to the foreign company from its trust account.

Sound implausible?  

Some of the biggest law firms in the country have been suckered into writing trust account checks or wiring money to bank accounts based on funds they thought had cleared their trust accounts, only to later learn that the check deposited with the law firm was a forgery.  The result is that the law firm ends up on the hook for hundreds of thousands of dollars, while the recipient of the money has disappeared.

Minnesota law firm Milavetz, Gallop & Milavetz (MGM) fell victim to such a fraud three years ago.  Founding partner Robert Milavetz says that when MGM got an email from a 40-year old Korean woman seeking to collect a $400,000 judgment owed her for an accident, the firm thought nothing of it: "We do this kind of thing every day," he says. "We help people get settlements. That's what lawyers do."

In one recent case, a pair of foreign nationals are facing criminal charges for allegedly having duped 70 U.S. lawyers and law firms out of $29M and of having tried to make off with another $100M from 300 more.

Lawyers must implement and consistently utilize a high level of due diligence when taking on new clients, especially ones that are self-introduced through online channels.

Ask for tax returns or other official documentation demonstrating that the client has been a solvent business for at least the previous two or three years.  Ask for professional references or other credentials, and don't let your zeal to take on a new matter cloud your judgment.

The moral of the story is, if the deal sounds too good to be true, it probably is.