ADVISERS to charities are being warned to be wary of letters from phoney lawyers offering fictitious legacies.
The fraud, much of it emanating from West Africa, is a type of advanced fee fraud. The letters, purporting to be from lawyers, claim the charity has been left a legacy, and the charity is then asked to forward its bank details and ultimately pay fees for the release of a legacy which does not exist.
The Metropolitan Police company fraud squad has warned the fraud is also being used on companies and individuals. Officers said that the amounts defrauded were “colossal” both in the UK and the US, with one American recently losing $4 million.
Francesca Quint, charity law barrister, has recently experienced such a case involving Nigeria.
She says: “This is a very unfortunate development. The frauds are quite sophisticated and can be very convincing. It is up to the charities to be extremely careful. They should not give out confidential information about the charity, such as its bank account details, on the strength of some unfulfilled promise on headed notepaper.
“The trustees could be negligently in breach of trust if the charity lost money as a result of such a fraud.
“It is very important from the trustees' point of view, and from their advisers', that they take proper safeguards. The more this fraud is publicised, the better.”
Andrew Phillips, charity expert and senior partner at Bates Wells & Braithwaite, says: “It is lawful for a charity to be notified as a beneficiary if it is not extortion. The charity does not have to agree. But for anyone to defraud them is a rip-off.”
He adds: “It is doubly wicked if it is a charity and trebly wicked if there is a genuine lawyer behind it.”
Phillips says the obvious solution is to look up the bogus law firm in a solicitors' list.