What duties does a Missouri lawyer have after a fraudulent cashier's-check scam removes other clients' funds from the trust account?

Plain-English summary

An unsolicited out-of-state supposed client retained the lawyer to collect a purported employment settlement. A fake employer contact sent a cashier's check exceeding the settlement amount, the lawyer deposited it, and the supposed client pressed for an immediate wire. When the check proved fraudulent, the trust account was overdrawn and other clients' money was gone.

The opinion permits a report to law enforcement whether or not a client-lawyer relationship formed. If there was a relationship, Rule 4-1.6 implicitly permits disclosure because the supposed client abused it to commit a crime against the lawyer; if the entire engagement was a scam, no confidentiality attached. Rule 4-8.3 does not require the lawyer to report the lawyer's own misconduct to disciplinary counsel, although the financial institution will report the overdraft under Rule 4-1.15(a)(2).

Rule 4-1.4(b) requires reasonably prompt disclosure of the loss to affected clients so they can make informed decisions about their representations. For future matters, the opinion connects scam awareness and staff training to competence and nonlawyer supervision. It also applies diligence to verifying client identity and the supposed matter, identifies mismatched email addresses, unusual urgency, distant cashier's checks, and excess payments as warning signs, and directs lawyers to verify checks with their financial institutions.

Rule 4-1.15(a)(6) prohibits trust-account disbursement when there is reasonable cause to believe the financial institution has not actually collected the funds and until a reasonable collection period has passed. The opinion explains that premature disbursement can cause an overdraft and conversion of other clients' or third persons' funds if the check is dishonored.

In practice

Under this opinion, law-enforcement disclosure, discipline reporting, affected-client notice, and trust-account handling are separate questions. The lawyer could report the scam, was not compelled to self-report by Rule 4-8.3, had to notify affected clients reasonably promptly, and could not disburse questionable deposits before collection under Rule 4-1.15(a)(6).

Common questions

Q: May the lawyer report the supposed client to law enforcement?

A: Yes. The opinion permits the report whether Rule 4-1.6 applies or the scam prevented a client-lawyer relationship from forming.

Q: Must the lawyer self-report to disciplinary counsel under Rule 4-8.3?

A: No. The opinion states that Rule 4-8.3 does not require self-reporting, although the financial institution will report the overdraft under Rule 4-1.15(a)(2).

Q: Must the lawyer tell clients whose money was lost?

A: Yes. Rule 4-1.4(b) requires reasonably prompt notice so the affected clients can make informed decisions about their representations.

Q: When may deposited funds be disbursed from the trust account?

A: Rule 4-1.15(a)(6) bars disbursement when there is reasonable cause to doubt actual collection and until a reasonable collection period has passed.

Q: What scam indicators does the opinion identify?

A: Unsolicited easy collection matters, distant parties or banks, out-of-the-ordinary service requests, mismatched contact details, checks exceeding the expected amount, and pressure for urgent disbursement.

Background and rules framework

The opinion applies Rule 4-1.6 to disclosure of a crime committed through a supposed lawyer-client relationship, Rule 4-8.3 to self-reporting, Rule 4-1.15 to overdraft notice and collection of deposited funds, and Rule 4-1.4(b) to affected-client notice. Rules 4-1.1, 4-1.3, and 4-5.3 govern competence, diligence, and supervision in detecting and responding to scams.

Citations and references

Rules of Professional Conduct:

• Missouri Rules 4-1.6 and 4-8.3 (confidentiality and self-reporting)
• Missouri Rules 4-1.15(a)(2) and 4-1.15(a)(6), Comment [5] (overdraft notice and collected funds)
• Missouri Rule 4-1.4(b) (client communication)
• Missouri Rules 4-1.1, 4-1.3, and 4-5.3 (competence, diligence, and nonlawyer supervision)

Other opinions cited:

• Missouri Informal Opinion 2018-06: reporting a scam to law enforcement
• Missouri Informal Opinions 2023-05 and 2011-04: no Rule 4-8.3 self-reporting duty
• Missouri Informal Opinions 2022-07, 2020-26, and 2017-02: notice to affected clients
• Missouri Informal Opinion 2020-15: good-funds disbursement

See also

• Alabama Ethics Op. 1988-92: Unclaimed Client Trust Funds
• North Carolina RPC 247: Electronic Transfer of Fees
• Texas Ethics Op. 705: Generative AI and Competence

Source

• Landing page: Missouri Informal Opinion 2025-08

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Question: Lawyer received an unsolicited email from Potential Prospective Client seeking collection of a settlement agreement. The settlement agreement was with Potential Prospective Client’s former employer, a Missouri based corporation with a website. Potential Prospective Client lives in another state far away from Missouri, so Lawyer only spoke with Potential Prospective Client over the phone and they corresponded by email. An engagement agreement was signed with Lawyer and returned by email. Potential Prospective Client, now Client, asked Lawyer to work directly with the former employer to try to collect on the settlement before filing suit. Lawyer sent a demand letter to former employer at the email address contained on the signature block of the former employer, and, within a few days, Lawyer received a cashier’s check that was for more than the funds required to satisfy the settlement agreement with Client, which were supposed to pay the Lawyer’s fee. Lawyer deposited the cashier’s check into the client trust account and waited a few days. Client contacted Lawyer and asked for the funds to be wired immediately so Client could close on a house purchase the next day. Believing the cashier’s check to be valid, Lawyer wired the funds per Client’s instructions. A few days later, Lawyer received notice from the financial institution where the client trust account is held, that the cashier’s check was fraudulent, and that and the account was now significantly overdrawn. The funds of several other clients are now gone from the trust account. Lawyer is seeking a loan to try to return the funds to the trust account for the other clients. Lawyer can no longer reach Client and has started doing more research on the alleged settlement agreement. Lawyer has found that the email address on the settlement agreement where lawyer sent the demand letter does not match the format of email addresses listed online for the employees of the former employer. Lawyer reached out to former employer by a phone number listed on the former employer’s website and is told the person who signed the purported settlement agreement is not an employee, nor is Client a former employee. Lawyer asks the following questions:

• May Lawyer report Client to law enforcement?

• Is Lawyer required to report the overdraft to the Office of Chief Disciplinary Counsel?

• Is Lawyer required to disclose to those impacted clients that the funds are gone?

• What steps could Lawyer take in the future to avoid such fraudulent representations that are really scams?

Answer 1: This question was addressed in Missouri Informal Opinion 2018–06. It is debatable as to whether an actual client-lawyer relationship formed in this scenario and is a question of fact and law outside the Rules of Professional Conduct. Scope [17]. However, Lawyer may report Client to law enforcement regardless of whether an actual client-lawyer relationship was formed. Rule 4–1.6, addresses attorney confidentiality for clients and prospective clients. It implicitly permits Lawyer to disclose the crime to law enforcement. See Informal Opinion 2018–06. This is because it is unreasonable for a lawyer to maintain confidentiality when the client has abused the relationship by committing a crime against the lawyer. In the alternative, if no client-lawyer relationship existed because the relationship was based upon a scam, no confidentiality attaches to the engagement.[1]

Answer 2: Rule 4–8.3, which addresses reporting professional misconduct, does not require Lawyer to self-report Lawyer’s own misconduct to the Office of Chief Disciplinary Counsel. See Missouri Informal Opinions 2023–05 and 2011–04. Whether Lawyer chooses to do so is a matter of Lawyer’s independent professional judgment. The Office of Chief Disciplinary Counsel will receive notice of the overdraft from the financial institution where the Lawyer’s trust account is held. See Rule 4–1.15(a)(2).

Answer 3: The loss of client funds should be reported to the impacted clients reasonably promptly as part of the duty to communicate with the client such that the client can make informed decisions regarding the representation in accordance with Rule 4–1.4(b). See also Missouri Informal Opinions 2022–07, 2020–26, 2017–02. Lawyer may also wish to reach out to Lawyer’s risk management provider or private legal counsel for guidance that is beyond the scope of an Informal Opinion.

Answer 4: In the future, Lawyer should be more diligent about scams. If it sounds too good to be true, it probably is. Scams have been around in a variety of forms for years, but lawyers need to train themselves and their nonlawyer staff to be mindful of scams, including cyber scams (i.e. phishing, social engineering, etc.). These responsibilities flow from the duties of competence per Rule 4–1.1, which, per Comment [6], includes keeping abreast of relevant changes in the law and its practice, including relevant technology. See also Rule 4–5.3. Lawyers should be aware of email solicitations that sound like easy matters — collecting a judgment or settlement, especially if one party is out-of-state or in another country, or if the request for services seems out of the ordinary. As part of the duty of diligence per Rule 4–1.3, lawyers should seek to verify who the client is and the legitimacy of the basis for the purported services requested. Another sign can be cashier’s checks from distant or foreign banks, often for more than the amount to be collected explained as fees or a bonus for the lawyer. Since cashier’s checks can be fraudulent, lawyers should work with their financial institutions to seek to verify validity of checks. Further, pursuant to Rule 4–1.15(a)(6), lawyers should not make disbursements from trust accounts if there is reasonable cause to believe the funds have not actually been collected by the financial institution, i.e. good funds, and until a reasonable period of time has passed for the funds to be collected by the financial institution. See Rule 4–1.15 Comment [5]; Missouri Informal Opinion 2020–15. Lawyers should resist claims of urgency and pressure to make disbursements from trust accounts prematurely, otherwise lawyers may face overdraft and conversion of other client or third person funds in the trust account if the cashier’s check is later dishonored.

[1] If, in a factually different scenario, a valid client-lawyer relationship exists, but the form of payment is invalid, lawyer should work with client to resolve that payment and/or take other measures at law to collect the fees for services in accordance with Rule 4–1.6(b)(3), Comments [9] and [12]. See also Missouri Formal Opinion 115 and Informal Opinions 2023–06, 2020–22, 2013–02, and 970016.