Presented for Your Disapproval - The Latest Scams Targeting CPAs
Mark Zampino
With apologies to the late, great Rod Serling, here, presented for your disapproval, are two recent scams directed toward CPAs. One is of the “shotgun” variety, the other far, far more targeted toward an individual practitioner. Read on…and let’s be careful out there!
“Just give us your account information, and we’ll take care of everything!”
The first ruse is laughable yet it serves as a great example of how even email scam artists conduct target marketing. It’s a twist on the infamous “Nigerian asset transfer” emails (which are so varied and widespread that there is, of course, an extensive Web site dedicated to them at www.crimes-of-persuasion.com/Crimes/Business/nigerian.htm) only instead of taking aim at general folks with email addresses, this “Dear CPA” version (supposedly from a Hong Kong art dealer) singles you out, Mr. or Ms. CPA, with its “Request for Accounting Services.” Here’s some of the language (edited considerably due to space constraints):
Request for Accounting Services
We will be very appreciative of your consideration to represent us in your country as a medium of receiving payments for goods supplied to our customers in
We are very confident that your accounting professional background will be very helpful to our situation. We deal in Chinese art and the global need for our goods has given rise to a significant increase in our customer base worldwide… funds will be sent directly to you from my clients thereby avoiding the intercontinental banking processing time between Asia and North America.
I realize that every good business reference starts with a satisfactory performance and I have decided that it is better for us to prove how efficient we are. I believe this is better than any recommendation or references. I have come to the proposal that any funds received by you on my behalf, entitles you to 10 percent of the total funds for your services as commission. I do hope this is acceptable to you… [etc., etc.]
Of course, then you reply and they ask for your financial account information.
Who Says Clients Don’t Pay Attention to Engagement Letters?
The second scam appears to constitute bank fraud, and was allegedly [we write “allegedly” to protect ourselves from lawsuits] perpetrated by a client of CPA Nancy Riella. Riella accepted the client, let’s call her “Ms. X,” in October 2005, and, like any savvy practitioner, had Ms. X sign an engagement letter for her “relatively simple 1040 work, nothing more.”
On two consecutive days in February 2006, Riella received two separate phone calls from two different employees of a mortgage company asking her to verify two different letters Ms. X had presented to them. Both letters appeared to be written on Riella’s letterhead, both bore Riella’s signature, and both stated she had performed extensive business accounting and reporting work (and personal tax work) far beyond the simple 1040 for years prior to Ms. X introducing herself to Riella in October 2005.
Flabbergasted, Riella explained to the mortgage company that the letters had to be fakes made by scanning the original engagement letter and “book-ending” the letterhead and signature to create the resultant counterfeit correspondence.
Later that day, a third employee from the mortgage company called, this one from their risk management department. Apparently, a third “creative writing” example had surfaced.
Riella called her malpractice carrier for advice, which included the following:
• Write to the mortgage company and inform them that the letters are not original, and therefore no reliance should be placed upon them.
• “Fire” the client by telephone notification, following it up in writing.
The client did not return the termination call, but did e-mail Riella. In her email, client Ms. X explained that “she did not generally act in this fashion, but the mortgage company wanted something in writing about her undeclared income and that she did not want to bother Riella with the details, and to “please accept (her) apology.”
Later, yet another forged letter surfaced when a (different) mortgage company purchased some loans and its audit/compliance department selected Ms. X’s file for review.
Riella offers the following “lessons learned and suggestions for self-protection” to CPAs:
• We can never control what our clients “do” to us.
• Keep a paper trail documenting dates, times, names and conversations.
• Should a “situation” present itself, keep your malpractice carrier informed.
• Use letterhead/second sheets that carry a “ghost” image that will prevent the signature from being re-used. While this is not foolproof, it will eliminate many would-be forgers.
“If I have to deal with another forgery popping up again from this former client, I’m going to file a complaint of forgery with the police – something I perhaps should have already done. And I’d also love to send a bill for the hours I’ve wasted on all of this,” she added somewhat ruefully.
Mark Zampino is public affairs director for the
AZ CPA – January 2007
