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How to Spot an Attorney Trust Account Scam Artist

There is an internet / email scam that has been preying on attorneys for some time now that usually involves the following fact pattern or something very similar:

  1. Attorney (usually a solo practitioner or small firm) gets an unsolicited email from an alleged creditor (usually a foreign company) claiming that the creditor is owed a substantial amount of money from a debtor located in that attorney's home state.  The creditor states that it is interested in retaining the attorney's services for a very large contingent fee.
  2. Easy Money?? If it looks too good to be true....After a response from the attorney, the creditor then states that the debtor is very close to settlement, but that the creditor still would like the attorney to stay involved and essentially oversee the settlement. To make things appear legit, the creditor may ask for an engagement agreement from the attorney.
  3. As soon as the engagement happens, the creditor sends another email (note the trend of no phone calls at all) saying that, low and behold, the debtor has given in and will be sending a check to the attorney ASAP for some or all of the debt.  The creditor also will provide wiring instructions to a foreign bank and instruct the attorney to keep his substantial fee (for doing nothing - wow- quick, easy money).
  4. A check arrives, usually a bank draft/cashiers check (or at least it appears to be).
  5. Attorney deposits check into trust account, initiates wire to foreign bank, and withdraws contingent fee. Happy days - right?
  6. Wrong.  Turns out the original check was either bad or counterfeit, there were never any good funds in the trust account, the funds that were wired overseas are long gone, and the attorney is completely screwed for the amount of the funds that were wired out (of course the easy money fee is gone too).

 I get these all the time, and occasionally respond for shits and giggles.  Recently, I received a fairly sophisticated one where the creditor claimed to be a business in Colorado that was owed a debt from a business located just a few miles from me.  This guy used the name of an actual Colorado business, the name of an actual Indiana business as the debtor, actual names of the owners of each business, and even provided a Colorado phone number to call.  I did some research on both businesses - and noticed that the phone number and email address the scammer gave me was different from that which was listed on the creditor's website.  So I called the number on the website - and of course the creditor business guy had no clue what I was talking about.  

So I decided to mess with the scammer just to see what would happen.

Here is some of the original email chain (names of course have been changed to protect the innocent):

The original contact email and ensuing emails:


Your Name: Andrew Scammer
Your Email:
Subject: Collection Matter
Message: Dear Counsel,
On behalf of Scammer Machinery Inc., we request your legal services
and possible representation on a Debt Recovery matter
involving Scammer Machinery Inc and a client in your jurisdiction.
Our legal representative won't be able to take on this
matter since it is out of their jurisdiction.
Do let us know if you are currently accepting new clients.
We look forward to a prompt response from you.
Thank you very much.
Andrew Scammer
Scammer Machinery Inc.
Mr. Scammer:
Thank you for the email.  Do you have any availability to chat about this sometime on Tuesday - perhaps in the morning?
Best Regards,
Brian Powers
Dear Brian Powers,
Thank you for your prompt response to my email.However,this is an official request for your services on behalf of my firm towards debt recovery.I will be calling your office to further discuss this matter with you or you can reach me via the telephone number below at your earliest convenience.
We are currently facing severe pressure from our supplier to pay up the balance funds that we owe to them.This debt is as a result of an outstanding payment for goods supplied to Debtor Machinery LLC ,valued at $485,760.00. (Four Hundred and Eighty Five Thousand,Seven Hundred Sixty Dollars).The said outstanding payment was for goods delivered in good condition. Due date for payment was set for the 27th of October,2009 as stipulated in our supplier's invoice. After this agreement was breached,we had a lengthy negotiation,and consequently agreed to extend payment to a deadline of 27th of January, 2010.
Quite unfortunately, the extended deadline was not also honoured.We will like to draw your attention to the relationship with our customer which has been cordial and we have had a successful business relationship over the past few years,and it is in our position to maintain this relationship after collection of the outstanding sum owed to us.
If your firm is retained, our expectation of your services for now will be within the scenario of a phone call or demand letter to our customer. This approach will trigger the much needed response from our customer towards payment,Otherwise,litigation will be the next option.We intend to give out a certain percentage of the payment if a lawsuit is not filed before we reach a settlement with our debtor.To be precise we are ready to give out 10% of any amount collected before a lawsuit is filed, this will compensate for your retainer amount and all other legal expenses.We do hope our customer responds to this informal approach of resolution,otherwise,we will pay up your retainer amount and all other charges before we commence the litigation process.I will also provide you with all relevant documents as soon as we are ready to go into the litigation process.
If this is acceptable to you and its a case that you can handle,please do let me know as soon as possible and also provide me with an engagement letter.We look forward to your prompt response.
Thank you
Andrew Scammer
Scammer Machinery Inc.
Sweet - new business.  Lets get this rolling - not even going to ask for an engagement letter...
I do not need a formal engagement letter, just please reply that you agree that any debt collected on your behalf will be paid directly into my attorney trust account, from which I can deduct a 10% fee and then wire the balance directly to your account.  The amount of my fee would be 10% of anything collected on your behalf.
Also, I would need to see a copy of any relevant invoices and /or contracts with the debtor.  Please scan those in and send them to me via email.
Best Regards,
Brian Powers
Dear Brian Powers,
Thank you for your email,however my firm will prefer a formal engagement letter stating the agreed terms for documentation purposes.
Please do email it to me for my review and signature.
I look forward to hearing from me.
Andrew Scammer
Mr. Scammer:
I appreciate the fact that you require proper documentation prior to the begin this process, therefore I look forward to receiving your signature to the attached engagement letter. Once we are engaged, please also provide any documentation regarding the outstanding debt.
Best Regards,
Brian V Powers, Esq
Wow - this guy must be legit if he is demanding an engagement agreement.  Well ok....

Dear Brian V. Powers,
Attached is the signed copy of the fee agreement.Please,do acknowledge receipt.
I am looking for a way forward in this matter and I am satisfied with the details portrayed in the agreement.I will be sending a hard copy of the documents in the mail to your office.
We have been communicating with our debtor Mr. Larry Debtor of Debtor Machinery LLC,over the past few days regarding our intention to take legal action against them,we have informed them that your firm will be handling this case from henceforth and that any further communication should be directed to your office.However,they have stated clearly that they want an out of court settlement,thereby pleading for more time to set up the payment.As I have earlier anticipated,We prefer to reach an informal resolution and still maintain a good relationship with our client. 
This morning, I received a call from Mr. Larry Debtor,that he will be making a partial payment of the money owed to us to avoid any legal action against them.We strongly believe that they have resolved in making this payment due to our recent legal stance.
They have promised that they will be sending the partial payment directly to your office on or before 30th of July, 2010 and the balance will be sent out on the 6th of August, 2010 to avoid any lawsuit.
I suggest we give them the requested time to come up with the payment,and if they should fail to make good their promise this time,then you can send out the demand letter and consequently litigation.
Please,be rest assured that if your office should receive this payment as promised by our debtor,your 10% fee still stands according to our agreement.
I await your acknowledgment of this email and also give me a call if you have any question.
Thank you for your services.
Andrew Scammer


Wow - this is going to be some easy money - I'll believe it when the check shows up...

Dear Brian Powers, Esq.

I have been reliably informed by my debtor that payment has been delivered to your office.Please confirm this payment and as well deposit it in your firm's trust account pending further instructions.

I look forward to your timely response.

Thank you.


Huh - ok - I'll still believe it when the check shows up...then POOF:


Wait a minute, why is this debtor with an address right across town from me sending me Air Mail from Canada?  Wierd.


Wait a minute - looks like someone is not as sneaky as they thought.  The bottom of the letterhead has a Canadian address.  Or maybe the scheme here was to say they have a Canadian division that was responsible for sending the check - who knows.

Eager to make some quick money, I got greedy and tried to change my deal:


Andrew Scammer,

Sorry to hear about your dilemma with the supplier in Duck Dong. I will deposit the check into my trust account and await further instructions.  Although, Hong Kong is really far and across an ocean?   Are you certain a wire transfer would make it that far?  We can try, and if the wire can't go that far, I could always fed ex a check. I would also be happy to review the contract with your supplier to see if you have any cause of action, butt that is unlikely.  

Finally, please be advised that I must adjust my fee to 33% for the additional admin work of negotiating a settlement with your supplier and for initiating an international wire(that can't be easy to do...just so far).  

Best Regards,

Brian V Powers, Esq


To that, I got nothing but crickets. 

Needless to say, I did not deposit the check, nor did I ever have any intention to do so. I made some law enforcement contacts to no avail. It is crazy to me that (a) people are falling for this, (b) the banking system is set up in a way that would allow this scam to happen, and (c) that there is little or no recourse for an attorney when it does happen.

So, the best way to avoid this whole mess is to spot the scammer at the get go.  Some tips:


  • Be wary of ANY potential clients that contact you via email to collect a debt and immediately offer up a substantial contingent fee.
  • Be especially wary of such a potential client if it is an international client (or claims to be).
  • Do some due diligence on the potential client before you email them back.  Google them.  Look for websites, yellow page listings, LinkedIN entries...etc.  But don't trust just what you find easily on the Internet.  
  • If there is a website for the potential client, run a Whois search to see how long the domain name has been registered - and to whom it is registered.
  • Try to find contact information for the potential client that is independent of what you received in the email - then use that information to contact the potential client.
  • ALWAYS call the potential client - don't just rely on email.
  • If you receive mail from the potential client, pay attention to the postage markings - if mail is being sent from somewhere other than the address the potential client is claiming (especially a foreign address) - stay away!
  • Never, ever wire funds from your tryst account until all funds have completely cleared from any underlying deposit.





The Change to the Accredited Investor Definition - Exclusion of Primary Residence from Calculation of Net Worth

On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) was signed into law.  Among the slew of provisions contained in the legislation, is a change to what constitutes an accredited investor under the Securities Act of 1933.  

As I have blogged about in the past, one way to qualify as an accredited investor under Rule 501 of Regulation D is to be:

a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase

Section 413 of the Dodd Frank Act changes that, by requiring the SEC to adjust the definition of “accredited investor” under Regulation D to exclude the value of a natural person’s primary residence when calculating that person’s net worth (emphasis added):

The Commission shall adjust any net worth standard for an accredited investor, as set forth in the rules of the Commission under the Securities Act of 1933, so that the individual net worth of any natural person, or joint net worth with the spouse of that person, at the time of purchase, is more than $1,000,000 (as such amount is adjusted periodically by rule of the Commission), excluding the value of the primary residence of such natural person, except that during the 4-year period that begins on the date of enactment of this Act, any net worth standard shall be $1,000,000, excluding the value of the primary residence of such natural person

This is obviously an important change for anyone out there with a private placement of securities - who should seek legal counsel to make sure they are obtaining the appropriate representations from individual investors.

It will be interesting to see exactly how the SEC implements this, and how it will treat, for example, a mortgage on a primary residence in the determination of person's net worth.  There are a lot of people out west with upside down mortgages - so this change may actually help some people qualify as accredited investors depending on how the SEC interprets and acts on this.


Indianapolis Attorney Brian Powers (that's me) Quoted in Article Regarding Equity Financing

Bank of America has a website called Small Business Online Community, the mission of which is to "create a thriving online community that empowers people in building a successful business."  A few weeks ago, a gentlemen called me, after reading some of my posts on and interviewed me regarding the raising capital and potentially giving up control in the process.  The article, which you can find in its entirety here, is pretty good, and give some interesting perspectives (other than just mine). 

Here are some excerpts quoting yours truly:

Still, Indiana business attorney Brian Powers, who also runs the blog, points out that such a power-sharing arrangement can work-it just depends upon the individual circumstances of the parties involved. "Investor control is not necessarily a bad thing, especially if you have a young business that will be gaining partners that have greater industry expertise and business connections than you do," he explains. But if a business owner can't take an emotionally detached look at his company's real long-term needs, he or she might be better served by bringing in a third party to help facilitate offers and find the best match. "That's what I often do," Powers explains. "I end up helping companies through the process of figuring out that what they're usually being offered is a pretty good tradeoff for the money." 


What helps Powers assess what is or isn't a pretty good tradeoff is the fact that he's been on the other side of the table. "In 1998, I was part of a dot-com startup company that raised $1 million in capital through an equity round," he explains. "Back then, though, we got ridiculous valuations and didn't have to give up control to get it. Those days are long gone now." For a short primer on these valuations and their role in determining equity investment, check out Powers' blog:




My Law Practice - Through the Eyes of Google.


Simple Estate Planning and Last Wills - Online -

Today I am launching a new website that provides online simple estate planning services to Indiana residents -  Simple estate planning is essentially estate planning for people with - well - simple estates.  A simple estate plan is a great way to make sure that your wishes are carried out in the event of death or disability. provides documents that can help you create your simple estate plan, including:

Last Will and Testament

With this Indiana Last Will and Testament, you can leave specific property to certain people or children via a written list or memo that you attach to your will. From there, this Indiana Will contemplates that the remainder of your estate be distributed to your surviving spouse, and if no spouse survives you, then to your surviving children.

Living Will / Advance Directives / Healthcare Directive

A Living Will / Healthcare Directive / Advance Directive protects your right to refuse any medical treatment you do not want, or to request any treatment that you do want, in the event that you lose the ability to make decisions for yourself.

Power of Attorney

A Power of Attorney lets you name someone to make certain decisions (healthcare, financial...etc) on your behalf in the event you are unavailable or not able to speak for yourself.

Simple Estate Planning Packages

Our Indiana Simple Estate Planning Packages provide essential documents for you to create a simple estate plan to ensure that your estate is handled properly in the event you become disabled, incapacitated, otherwise unable to manage you estate yourself, or pass away. The Indiana Simple Estate Planning Packages include:

  • Indiana Last Will and Testament (for Married individuals).
  • Indiana Living Will Declaration.
  • Indiana Durable Power of Attorney.
  • Indiana Healthcare Power of Attorney (with optional appointment of Healthcare Representative).
  • Indiana Life Prolonging Procedures Declaration.

Affordable PPM Attorney / Private Placement Attorney Services? Why Not!

I hear from entrepreneurs all the time who are trying to raise capital - either for a business start-up or to expand an existing and established business.  Many usually dread picking up the phone to speak with an attorney about preparing a PPM - due to the notion that such an endeavor will cost them upwards of $20,000 - $40,000!  Sure, there are some transactions that could merit legal fees in that range and possibly above - especially when you consider that most law firms will prepare a PPM on an hourly basis (which is always an expensive and intimidating proposition for the business owner/client).  

I don't do it that way.  Entrepreneurs raising capital need to focus on successfully raising capital while also running a business (after all, the business doesn't just shut down while the founders and officers are out raising capital) - the last thing they need on their mind is the uncertainty of mounting PPM related legal fees that may actually lure them into avoiding legal counsel during portions of the capital raising process.   It is crucial that businesses raising private capital work with legal counsel throughout the entire private placement process to make sure they remain in compliance with federal and state securities laws.  

If you are looking for a securities attorney to help you with a PPM and advise you through the private placement, capital raising process, here are a few ways you can help make you fees more affordable / predictable:


  1. Have a good thorough business plan prepared - in writing.  This saves an attorney lots of time trying to learn about your business - which is crucial to the preparation of a good private placement memorandum.  A good portion of the business plan might also be used in the body of the PPM.
  2. Do some upfront research on securities laws so you know what questions to ask.  Your attorney most likely (and should) give you a thorough run down of the legal restrictions involved in raising private capital using a private placement / PPM, but doing a little reading up front will let the attorney know you are serious about your capital raising project and that you have some sophistication in the matter.
  3. Ask for a fixed fee.  If your attorney is like me, you won't need to since I almost always provide a fixed fee to prepare a PPM and provide certain other private placement legal services. 



Why form an LLC in Indiana? | LLC Attorney

There are lots of reasons and advantages to setting up an LLC for your business.  Lots of times people wonder, though, which state is the best in which to form an LLC.  I usually recommend that people form an LLC in their home state, although that advice can vary from time to time depending on the exact circumstances. For Indiana businesses, forming an LLC in Indiana is a no brainer for a few reasons, as I detailed in a recent post on


  • Forming an Indiana LLC is fast!  The process of filing articles of organization with the Indiana Secretary of State can be done electronically – and in most cases – your Indiana LLC can be up and running within 24 hours.  Some states require documents to be mailed to the state, while other require that certain notifications be published in the newspaper – all of which can take weeks!
  • Forming an Indiana LLC is can be a private and confidential process.  Most other states require that the name and address of members, managers and/or officers of the LLC be filed as a matter of public record.  Indiana only requires that the name and address of the registered agent of an Indiana LLC be filed (which can be anyone located in the state of Indiana – typically an attorney or registered agent service provider).
  • Forming an Indiana LLC only requires a $87.00 filing fee with the state (which is included in in all of our LLC formation packages).  Some other states charge double, triple, and even quadruple that amount.




Form an LLC Online. Fast. Using an attorney.

A good first step for anyone starting a business is to form a separate legal entity through which to conduct business.  Usually this means that a limited liability company or corporation is formed.  Except in certain instances, I usually recommend that an LLC be formed.  The business owner then has a choice to make - how to form the entity.  


  • Do it yourself?
  • Use a non-attorney legal forms provider like
  • Retain the services of an attorney?


This decision usually comes down to one factor - cost.  Most people, in the absence of the typical relatively high cost of using an attorney to set up an LLC, would likely use an attorney.  This is why non-attorney legal forms providers have become so prevalent and successful - the provide a pseudo-legal service at a much lower cost that an actual attorney. In the past, I myself have lost clients seeking to form an LLC when opted to use a legal forms provide rather than retaining my services - simply due to cost.

That is what inspired me to launch - which is designed to give clients the best of both worlds - the LLC formation services of an attorney with the afford-ability and speed (although our services are much faster than most legal forms providers). allows you to create single and multiple member Indiana LLCs online by walking you through an interactive questionnaire that has been carefully crafted by me to mimic the exact same process I use when setting up an LLC for a client in the traditional manner.  The system then analyzes the answers provided and generates a set of documents that are sent to me for my review.  After I review them, I make th appropriate filings with the Indiana Secretary of State, send the documents back to the client, and POOF - a brand new Indiana LLC has been formed!  All of this can be done in as fast as 1 business day.

If you are interested, check out  

Apr192010 - Fixed Fee Online Legal Services

Today I launched a couple of new websites, one of which is Over the past year, a good deal of my solo legal practice has been driven by the various blogs and sites I maintain on the internet.  One thing I have learned is that not everyone that finds me wants a "traditional" experience with an attorney.  They know what they want in terms of legal advice or documents.  They want it quick, and they want it to be affordable.  They don't need or want to meet face to face.  They don't want to visit an office.  They don't want broad representation.  Some of them need an LLC formed.  Some of then need a power of attorney. caters to the needs of these people.  By using carefully designed, interactive questionnaires that help me quickly assemble documents, I am able to provide certain legal services and legal documents at a fraction of the cost that some other attorneys charge. In fact, the prices on are right on par with non-attorney legal form sites such as Keep in mind that is not an attorney and may not give you legal advice - I can.  And the option to receive legal advise regarding your documents is available (sometimes bundled with the price of your document, sometimes at an additional cost).  

Below is some information that I posted directly from  Check it out!  The menu of legal services and documents is not quite complete - but I plan on adding documents on a daily basis.

The internet has changed the way people do business – and it is changing the expectations people have about receiving legal services.  People want legal services fast, without paying an arm and a leg. While there will always be a time and place for traditional, hourly legal services, certain transactional legal services lend themselves very effectively to being offered over the internet.  Some people resort to legal forms companies, such as LegalZoom, to obtain “online legal services.”  Forms companies can’t provide legal advice, only a lawyer can. is a service from the Law Office of Brian V Powers, a licensed attorney in the State of Indiana.

The process is quick, and very easy:

  1. Select the legal service you would like.
  2. Create an account with (subject to Terms of Use).
  3. Purchase your Online Legal Service.
  4. Complete the questionnaire.

Once you complete the questionnaire, the documents associated with your online legal services will be sent to the Law Office of Brian V. Powers for review.  The Law Office of Brian V. Powers will review them, follow up with any questions, and when they are complete, upload them to the site where they will be available for your download.

Why Are Online Legal Services Fast and Affordable?

Its the technology of course!  By using the latest in online document automation technology, your documents are prepared quickly without the need to a paralegal or legal secretary to key in your information.  Our technology is smart too – it knows how to assemble your document based on the answer you provide.  Answers are collected online.  Payments are collected online.  Documents and advice are delivered online (and by phone from time to time).  Most lawyers waste a lot of time and money on expensive offices, unnecessary staff & overhead, and client meetings.  Not here.  We focus on you and your legal needs – which saves you time and money!

Compare Us to Others – A Licensed Attorney vs Legal Forms Providers

Our fees are fixed and significantly lower than other attorneys.  We challenge you to find a better value anywhere. In fact, here is a link to the “leading” online document-preparation service: LegalZoom(tm). We put that link there hoping you will click on it, and knowing that you’ll be back.  We spend a lot of time fixing the mistakes they, and other non-attorney document preparation services, make.

The advantage of using us – you’ll have the advantage of a real lawyer personally reviewing and analyzing your documents, instead of some non-attorney clerk on the other side of the country.


Do I need a PPM to offer notes? (Private Placement Attorney - Debt PPM)

This is a question I get from so many clients and potential clients that have the misconception that only stock in a corporation, membership interests in an LLC, or partnership interests in a partnership are "securities."  Under the Securities Act of 1933, a security is defined as:

...any note, stock, treasury stock, security future, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a "security", or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.

Notice the first word is NOTE.  The words "EVIDENCE OF INDEBTEDNESS" are also used.  Notes, bonds, and indebtedness in general are a form of a security, and as such, any offering involving them must be handled and scrutinized in the same manner as an offering for equity (stock...etc).  This doesn't necessarily mean that you need a private placement memorandum (PPM) depending on the specifics of the offering, the types of investors you seek, or the securities law registration exemption you will pursue - but that is a determination that should be made by an attorney with experience in those matters.  

So don't make the mistake of believing that debt instruments are not securities!