I’m only going to tell you a little bit about how to do this one. The details are not worth spreading around just for a few cheap laughs. Maybe I’ll explain how it all worked in more detail in a few years after these loopholes I’m about to hint at are closed.
So, basically here’s how this scam works against lawyers. The person comes in to hire you. Usually they only try the stolen car trick when their case is kind of little. After all, if they tried to make a down payment of a $20,000 retainer with a brand new Mercedez Benz you would probably look into it a lot. But like I said, this scam works best when the retainer is something like $2,000 and the person knows their stolen car is realistically worth in the range of $3-4,000. That way, they make you think you’re getting a good deal but it’s not so far out there that it raises red flags. They will probably tell you something like “Yeah, it’s worth more than the retainer but I just know your fees could go up. Besides, it needs new tires.” They will swear up and down that they’re going to get the cash from a relative in a month and just pay you the money so that they can get their car back.
You’re going to be a little cautious, as you should be. You’re going to say “Well, bring in the keys and the title and park it out back so we can make sure it’s in good condition.” They will do it that afternoon. The title will look completely legit. Of course you want to see the paper title because you know banks usually have first position on any car liens. They will just come get the car from you and you’re out of luck. But, and I’m just wondering here, how good are you at noticing the difference between an actual real title and a forged one? Do you know how to check and see if the title is clear just to be sure? I suppose you could have your staff spend hours calling around to all the different banks in the U.S. that do car loans but assuming they will tell you anything, your staff is going to hate you for several months afterwards.
Anyhow, the new client is going to make a big show to your secretary of taking their house keys off the ring when they hand over the car key. When you go out and look at it you will probably see some kids stuff in the backseat, which the client will call to come pick up in a few days like they just discovered it was still in the car and their kid is crying about it.
Most states require either that your fee agreement says the entire fee is earned up front or that you bill on an hourly or percentage basis. However, no matter how you say it, you can only earn a ‘reasonable’ fee. If the hearing takes 20 minutes and you keep the entire $2,000 retainer, then you are an unethical lawyer for charging a clearly excessive fee of $6,000 an hour. There have been some high profile cases recently when the courts approved things like a $35,000 hourly fee but those are the VERY rare exceptions. Your local lawyers probably charge in the range of $175 to $250 an hour so that’s going to be the definition of ‘reasonable’ when it comes to fees. The safe thing is to take the money, or in this case, the car, and hold it somewhere secure until you can justify the amount of work on the case and your legal fees. What that means for this scam is that the stolen car is going to sit out back behind your office or in your driveway at home until after the case is over.
You’re probably wondering where the loopholes are, right? Well, if the client is smart they are going to go to the local mall and switch the license plate with a similar car. It’s pretty unlikely the cops are going to run the plates of all the cars in the back parking lot of your law firm anyway, but if your legal assistant calls your local DMV and actually gets through to someone they will be told the car isn’t stolen. After all, she gave the DMV the plate number from some innocent person’s car that is now driving around with the stolen plate. Most DMV hotlines don’t give out names and addresses so you can’t find out the real owner isn’t the scam artist client.
Do you know how to run the car’s VIN? Do you even know where to find the VIN? Most states don’t have a process for normal people to check a car’s VIN number anyway. Same goes for license plates. Local police won’t do it for you either – especially if your firm does any criminal defense work.
The other loophole is that some states let you go in to DMV and get a replacement title for as little as $12. It might be even better if the car was stolen in a certain neighboring state where it’s even easier to sign a form and get the replacement title.
The only way you are going to find out it’s a stolen car is if you sell it to someone who then tries to register it and get new license plates. They’re going to be in your office the next day screaming that they want their money back. The same thing will happen if you give it to one of your kids to go to college or something, except they’re going to be screaming at you at home.
So like the other scams I’ve blogged about, there is no downside for the client. They got your work for free and there’s almost nothing you can do about it. You can’t call the police because the client will file a bar complaint against you. They might even try to sue you in small claims which ticks off your insurance company. Even if you do call the police the cops aren’t going to do anything about it because he’s going to show them a real-looking bill of sale and tell a tall tale about buying the car from a college student.
Some of you might be thinking you will sue the guy for breach of contract. Good to see you stayed away during contracts in your first year of law school. Experienced lawyers will tell you that all it does is invite problems. Of course, the statute of limitations is two years for legal malpractice and six years for breach of contract. If you wait, say, three years or so and then sue him he can’t counterclaim and make all kinds of problems by bringing in your professional insurance company. Then again, assuming the client is not in prison or dead in three years, he’s going to be nearly impossible to collect against. If he’s passing stolen cars he’s not the kind of guy to keep a bunch of money in the bank.
The bottom line here, like always, is to get as much cash up front as you can.