Law firm accused of losing $1 million of client's money in email scam
Law firm Mills Oakley is being sued over accusations it fell for an email scam and lost almost $1 million of a client’s money.
Prominent Singapore businessman and real estate mogul Harry Chua hired Mills Oakley to act for him to buy an apartment in the Aurora Melbourne Central development in La Trobe Street in the city’s CBD.
Last December, someone purporting to be Mr. Chua’s personal assistant emailed the firm asking: "Can you please confirm the total amount of excess funds we have with you in your trust account? Regards Janice."
A legal assistant wrote back, confirming there was $928,687.07 in a trust account, Mr. Chua’s new lawyers from Gordon Legal alleged in documents filed before the Victorian Supreme Court this week.
Three days later, "Janice" emailed again, requesting the transfer of the money into a Bank of China account.
"Funds are needed urgently today ... Regards, Janice," the email said.
That same day, the money was wired to the Bank of China account and disappeared, Gordon Legal alleged.
Mr. Chau’s new lawyers said Mills Oakley should have been suspicious of an out-of-the-blue request from a client’s personal assistant asking for an urgent transfer of funds to a foreign bank account.
"A prudent law firm would apply care, attention, and skill to providing legal services and that would include, in this case, checking with the client before transferring nearly $1 million to a foreign bank account in a foreign country where the client has no association," Gordon Legal principal lawyer James Naughton said.
A spokesman for Mills Oakley said the claim will be vigorously defended. He said Mr. Chau’s email system was hacked and not Mills Oakley’s system.
"We used the correct email address to facilitate the transfer of funds. Again, we emphasize that the hack occurred at the client’s end," the spokesman said.
Gordon Legal alleges that Mills Oakley should not have allowed a conveyancing clerk to transfer funds without partner approval.
A law firm acting with reasonable care would have also paid attention to the risk of scammers targeting law firms and their clients, Gordon Legal claims.
"Particularly in light of the notice 'BEWARE OF SCAMMERS' that appeared at the bottom of the emails of Mills Oakley personnel," Mr. Chua’s lawyers said in the statement of claim.
Gordon Legal, which is suing both Mills Oakley and supervising partner Anthony Brearley, said the firm has not apologized to Mr. Chua for the "obvious error".
"Mr. Chua is really aggrieved by what’s happened to him," Mr. Naughton said. "He feels really strongly that he’s been let down by his solicitors and he wants to pursue the case through the courts."
Mills Oakley and Mr. Brearley are yet to file a formal defense but have indicated the case would be defended.
Mr. Brearley declined to comment.
The Legal Practitioners’ Liability Committee warned firms in 2018 that both they and their clients were the targets of hackers who were sending authentic-looking emails requesting money transfers.