Attorneys: Don’t be Michael Scott

There’s a great scene from the Office when Michael Scott continues to blindly follow his obviously incorrect GPS device until he has driven his car into a lake. Don’t be Michael Scott. There are times when an attorney must stop and question the client when the representation reaches an uncomfortable level or the attorney suspects wrongdoing.

We’ve previously discussed the allocation of authority between attorney and client. A more recent example of attorney misconduct highlights the potential for ethical ramifications when an attorney blindly relies upon a client’s representations without any oversight or independent thought. Sure, attorneys are taught to abide by their client’s wishes but there are limits. A Rhode Island attorney recently learned this lesson firsthand after being reprimanded for following his client’s instructions without asking the appropriate questions.

This experienced Rhode Island attorney marketed himself as an “attorney paymaster” acting as an escrow agent for commodities brokers. As paymaster, the attorney would hold funds for the brokers until he learned that they had been earned and could be disbursed. Eventually, the attorney was contacted online by a prospective client going by the name of Rajat Ohri. The attorney performed a very cursory investigation on the internet and deemed the would-be client to be legitimate. He did not inquire any further.

The newly acquired client promptly wired to the attorney’s account $3.4 million. The attorney never verified the source of the funds. The client then instructed him via email to transfer those funds, less his 2% commission, to various international locations. The attorney followed these instructions and for his efforts received a total of $68,734. Soon thereafter it came to light that this client was actually an internet scammer who used the attorney as a conduit to defraud.

The attorney escaped criminal charges, but his conduct in unwittingly assisting an internet scammer in fraudulent activities resulted in a public censure by the state’s Supreme Court. The court concluded that in participating in the transactions the attorney violated the state’s rules requiring legal knowledge, skill, preparation and thoroughness as he did not perform due diligence in ensuring the legitimacy of the individual or the source of the money. The attorney and his malpractice carrier also had to pay over $50,000 into a Superior Court registry to pay for the victim’s claims.

The lesson here is not to be Michael Scott. Attorneys must not blindly rely upon client representations without independent verification particularly when the circumstances are somewhat fishy. This is particularly true when dealing with clients obtained through the internet where face-to-face interaction is limited or non-existent.

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