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Vermont Attorney General Warns Public About Bankruptcy Phone Scam



Valley News Staff Writer
Tuesday, October 13, 2015
Montpelier — The Vermont Attorney General’s Office has issued a warning about a scam targeting bankruptcy filers, a scheme that has resulted in two Vermonters — one from the Upper Valley — wiring a total of $1,400 to a con artist.

Attorney General William Sorrell said the scammer poses as the consumer’s lawyer or a member of his or her staff and instructs the consumer to wire money in an attempt to pay a debt that is outside of the bankruptcy proceeding.

“The perpetrators of this scam use software to ‘spoof’ the caller ID system so that the call appears to be originating from the phone line of the consumer’s bankruptcy attorney,” Sorrell said in a news release issued Monday. “Consumers are then instructed to immediately wire money.”

The calls are placed late at night or during nonbusiness hours, making it harder for clients to get in touch with their attorneys, Sorrell said.

As of Monday afternoon, three Vermonters had been targeted, but only two had agreed to wire money.

Two clients of Kainen Law Office in White River Junction were targeted, including a woman from Windsor who wired $686 to the scammer on Friday night from the Claremont Walmart.

Michelle Kainen, the owner of the law office, said the scammer told both of her clients if they didn’t wire money to pay the debt, a warrant would be issued for their arrest.

“No legitimate debt collector or agency will ever tell you to wire money to avoid arrest,” Kainen said.

Both clients attempted to reach Kainen after her office had closed on Friday. But the woman from Windsor was unsuccessful, and followed through with the scammer’s demand.

She likely won’t ever see that money again, Kainen said.

Kainen’s other client who was targeted — a resident of Barre, Vt. — was at first unsuccessful in reaching her by phone Friday night. But in the process of wiring $787 to the scammer from the Berlin, Vt., Walmart, the service desk clerk raised red flags, and the client again called Kainen’s law office. The two connected, and Kainen was able to stop her client from going through with the transaction.

Both of her clients are middle-aged, she said.

A third Vermonter, a 70-year-old woman from Vernon who is a client of Bruce Hesselbach Law Office in Brattleboro, also fell victim, wiring about $700 to the con artist from the Hinsdale, N.H., Walmart, said Janet Murnane, the director of the consumer assistance program at the Attorney General’s Office.

The scammer is likely overseas, making education the only real way to prevent others from falling victim, Murnane said. The calls can’t be traced, she noted.

At first, Kainen said, she thought the scam was isolated, but then a second client of hers came forward, prompting her to issue a separate news release to all of her bankruptcy clients and the National Association of Consumer Bankruptcy Attorneys.

On Monday, she said she feared how widespread the scam might be.

“How many lawyers may come back from the three-day weekend and find that there are more victims?” asked Kainen, who is the wife of Windsor County State’s Attorney Michael Kainen.

Just how the scammer got the information of those affected is unclear. Bankruptcy information, however, is public.

“Before the Internet, one would have to find the information, which was occasionally published in the legal notices section of the local newspaper,” Kainen said. “Those days are long gone.”

The scam comes on the heels of a large presentation by famous former con artist Frank Abagnale, who inspired the 2002 movie Catch Me If You Can, at the Lebanon Opera House last Thursday.

The introduction of technology has changed the nature of identity theft and fraud tenfold, Abagnale told the more than 200 attendees of his event titled “Stealing Your Life.”

Sorrell, the attorney general, urged consumers to verify a source before executing a money 
transaction.

“Consumers who receive such a call should not wire funds and should contact their attorney as soon as possible,” he wrote in the release. “Currently active scams include calls from scammers posing as agents of the IRS, debt collectors for payday loans, family or friends in need of emergency assistance and technical support for Windows computers.”

Jordan Cuddemi can be reached at jcuddemi@vnews.com or 603-727-3248.