![]() After the transfer was made, Staffin called Bragg to discuss it, finding out only then that Bragg had no knowledge of the $580,000 request. Bank of America made the transfer at Staffin’s request. In the correspondence, the hacker addressed Staffin by his nickname, Mel, making the ruse even more convincing, and asked for a $580,000 transfer from the firm’s IOLTA sub-account to the Bank of China. ![]() Unfortunately, that effort was untimely as Bank of America had already sent the wire transfer pursuant to Staffin’s order." According to the firm's complaint, a hacker posed as a partner of the firm, Gary Bragg, and the emails involved a loan transaction of which the hacker seemed to have intimate knowledge. After verification, Staffin learned that the firm had been the victim of fraud and attempted the cancel the wire. Exercising its due diligence, after Staffin initiated the wire transfer, the Bank called Staffin to obtain personal verification of the wire transfer request via telephone wire pin. Staffin, took the bait, failed to verify an email payment request from a fraudster, and wired $580,000 from OBS’s IOLTA account at Bank of America to the fraudster’s account at Bank of China. "OBS was a victim of a phishing scheme," the bank said in its motion to dismiss. Bank of America's summary of the facts of the case portrayed the incident as an unfortunate situation that was entirely out of the bank's control. The bank also contended that it does not owe a tort duty to the law firm and that the doctrines of the gist of the action and economic loss bar the firm's claims. ![]() Bank of America further argued that its contract with the firm specifically absolved the bank of liability for wire transfers that could not be cancelled and was silent as to whether funds from the firm's entire IOLTA account could be used to fund wire transfers. In a motion to dismiss filed June 28, Bank of America argued Pennsylvania’s Commercial Code displaces all of the law firm's common-law breach-of-contract claims and that the PCC does not impose liability on a bank for failing to cancel a wire transfer that its customer had validly initiated and authorized. The complaint claimed the bank breached its contract with the firm by failing to cancel the wire transfer once it was discovered to be fraudulent and by using other clients' funds from IOLTA sub-accounts to cover the amount. The firm filed a complaint May 18 in federal court in Philadelphia, claiming the bank was responsible for the damage done after hackers used deceptive emails to dupe a member of the firm into transferring more than a half-million dollars from the firm's Interest on Lawyer Trust Account to the Bank of China, purportedly on behalf of a client. Photo: Bank of America has fired back at Warminster-based law firm O'Neill Bragg & Staffin, which sued last month alleging the bank was liable for failing to cancel a wire transfer made to China after the firm’s account was infiltrated by hackers.
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