Lawyer’s paralegal was fooled by fraudster who changed wiring instructions, suit says
Trials & Litigation
Lawyer’s paralegal was fooled by fraudster who changed wiring instructions, suit says
April 27, 2023, 2:14 pm CDT
A Connecticut lawyer sent part of the proceeds from a home sale to a fraudster’s bank account, rather than the bank holding the mortgage, a negligence lawsuit alleges.
The lawsuit, filed April 24 in Connecticut superior court, was filed by home buyer Lesley Moody, who said the title to the home that she purchased is encumbered by the seller’s mortgage as a result of the goof-up.
Law360 has coverage.
William Cote, the lawyer for the seller, allegedly wired more than $159,000 to the wrong account after his paralegal presented him with what turned out to be a phony payoff statement. The money was supposed to be paid to the Freedom Mortgage Corp.
Cote had received a correct payoff statement with accurate wire instructions Aug. 10, 2022, the suit says. Before he made the payment, his paralegal received an email from an unknown third party who claimed to be the seller. The email said there was a new payoff statement.
When the email fraudster sent the new statement, it “specified wire instructions for a different bank and account—presumably one that the fraudster controlled,” the suit says.
The paralegal forwarded the new statement to Cote, even though it had “multiple material differences.”
Cote followed the new instructions when he wired the money. He learned of the mistake nearly a month and a half later, when the seller said he received a statement from the Freedom Mortgage Corp. reflecting a balance owed on his loan, according to the suit.
Cote didn’t immediately respond to the ABA Journal’s email requesting comment.
Cote and the seller of the property are named as defendants.
The case is Moody v. Harding.
