DENVER–A Colorado law firm has been ordered to pay $115,000 to Colorado’s largest credit union following a legal dispute over which it was at fault after for an overseas-based scam led to the closure of the firm.
The Colorado Court of Appeals ruled that Sayre & Harris Law, which handled business and real estate cases in Denver and Grand Junction, Colo. before closing, must pay the judgment to Ent Credit Union, upholding a lower court ruling from last fall, BusinessDen.com reported.
According to the report, Sayre & Harris opened a trust account for law firms, known as a COLTAF account, at Ent in March 2021. Nine months later, the firm was contacted by a prospective client, who asked them to draft a purchase agreement with a hospital for the sale of respiratory ventilators, BusinessDen.com reported.
‘Great Urgency’
“Given the national importance of respiratory ventilators during the COVID-19 pandemic, Sayre & Harris treated the transaction with great urgency,” BusinessDen.com quoted the Court of Appeals as stating.
“The supposed client wrote a $154,000 cashier’s check to Sayre & Harris and instructed them to wire $116,000 to a bank account in New York that was said to belong to a ventilator inspection company,” BusinessDen.com reported. “Ent added a credit of $154,000 to Sayre & Harris’ account and the law firm, believing that meant the cashier’s check had cleared, wired the $116,000 to New York.
“The next day, Bob Harris, one of the firm’s partners, got in touch with Wells Fargo, the bank whose name was on the cashier’s check,” the report continued. “Harris had reached out to Wells Fargo before wiring the money to New York but not heard back for days. When Wells Fargo finally did talk with him, it had bad news: The cashier’s check was a fake. Harris then informed Ent.”
Funds Wired to Nigeria
The funds were wired to Nigeria and have not been recovered by any party, BusinessDen.com stated.
“The scam left a $114,540 overdraft in the COLTAF account,” the Court of Appeals said, according to the report. “Unable to pay the negative balance, the firm closed its account and was dissolved.”
Ent Credit Union filed suit against Sayre & Harris for the $114,540, plus interest and legal fees. Judge Brian Flynn in Mesa County ruled in November, 2023 that because the facts in the case were undisputed, he could decide the matter without a trial, and he ruled in favor of ECU.
‘Not Applicable’
“The risk of loss remains with the depositor when a counterfeit cashier’s check is dishonored and returned as unpaid,” Flynn wrote. “As such, the defenses raised by the defendant seeking to shift blame to Ent Credit Union for the dishonored check…are not applicable.”
Sayre & Harris appealed that decision to the Court of Appeals, which also sided with Ent.
BusinessDen.com reported that all parties involved declined to comment when contacted.