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Monday, May 27, 2024 | Back issues
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Lawyer Can’t Untangle Wire-Transfer Scam

CHICAGO (CN) - An attorney conned into sending $269,500 to a Japanese bank for a purported client must replace his bank's missing funds, a federal judge ruled.

Robert Hirsch, a sole practitioner, received an email on May 5, 2010, requesting his services to enforce a divorce settlement against an ex-husband. The email, signed Ms. Julie Kobayashi, said she was owed approximately $810,000.

After a series of emails, Hirsch agreed to represent Kobayashi, who sent him a cashier's check for $298,500 that appeared to be drawn on Citibank. After depositing the check with his bank, Fifth Third, which provisionally credited his account, Hirsch wired $269,500 to a Japanese bank, per Kobayashi's instructions.

The transfer agreement, which Hirsch signed, specifically asks customers if they are "wiring these funds to someone you met on the internet who sent you a cashier's check." Hirsch answered "no" to this question.

Four days later, Citibank notified Fifth Third that the cashier's check was counterfeit, but it was too late at that point to reverse the wire transfer.

Fifth Third then sent Hirsch a letter informing him that the cashier's check was counterfeit, and that the agreement he had signed when opening the account required him to repay Fifth Third for the missing funds.

Hirsch refused to pay.

In August 2010, Fifth Third filed a complaint for breach of contract, seeking the lost funds, plus interest and attorneys' fees.

U.S. District Judge Virginia Kendall granted the bank summary judgment last week, finding that Fifth Third is entitled to recover "no less than $269,500" from Hirsch.

"The terms of the account agreement are clear and unambiguous," Kendall wrote.

The bank's rules and regulations state that "if an item is returned as a counterfeit item, altered item, or for any other reason, the customer acknowledges and agrees that they will be liable to the bank for any loss suffered by the bank."

Since Hirsch acknowledged and agreed to be bound by these rules, he "breached his obligations under the account agreement by not making Fifth Third whole for the loss it suffered."

Kendall similarly found that Hirsch had breached the terms of the bank's transfer agreement, by answering in the negative when Fifth Third asked "whether Hirsch was wiring funds to someone he met on the internet."

Hirsch must also pay Fifth Third's attorneys' fees and costs.

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