Lawyers Beware: Serving as an Attorney “Pay Master” has Money Laundering Risks

“If it seems too good to be true, it probably is.”  This is one of the major lessons we’ve learned from the flood of counterfeit check email scams in the past few years.  The same lesson also applies to “attorney pay masters.”  The ABA Journal recently reported that an attorney in Rhode Island was censured for serving as an attorney pay master.  In exchange for a large commission (and without providing any legal services), the RI attorney opened up his trust account to a scammer.  Funds were accepted without question, then forwarded to accounts around the world.

Lawyers Mutual is aware of at least one North Carolina attorney who has been approached about serving as an attorney pay master.

These pay master scenarios raise important questions about risks and obligations lawyers face with respect to money laundering.   The North Carolina State Bar’s website includes information about an ABA Task Force that has developed voluntary good practice guidelines for the prevention of money laundering and terrorist financing.  We encourage you to review the two publications from the ABA Task Force:  Voluntary Good Practices Guidance for Lawyers to Detect and Combat Money Laundering and Terrorist Financing and FAQs on the Gatekeeper Initiative and Voluntary Good Practices Guidance.

Laura Loyek joined Lawyers Mutual as claims counsel in 2009 and her focus areas are real estate and litigation. She is an active member of the North Carolina Association of Women Attorneys and the Real Property Section of the NCBA. Contact Laura at 800.662.8843 or laura@lawyersmutualnc.com.