The Fraud Corner aims to provide LSC grant recipients and staff with detailed information about specific instances of fraud either identified through our investigative program or schemes prevalent across all Offices of Inspector General. The Fraud Corner addresses issues that require immediate action or attention. In many instances the Fraud Corner articles will be issued prior to the completion of an OIG investigation, so that grantees can take appropriate measures to safeguard their programs.
July 18, 2023
Fraud Corner: How to Identify and Prevent Financial Fraud Schemes Committed Against Senior Citizens
This Legal Services Corporation (LSC) Office of Inspector General (OIG) advisory is intended tohighlight the growing trend of financial fraud committed against the senior citizen population. Seniors are a substantial portion of the United States population and the LSC grantee client base. If affected by the fraud schemes described in this advisory, eligible senior clients may request assistance from your legal aid program. According to the Council on Aging, fraud schemes targeting seniors are costly, widespread, and on the rise. Seniors may become targets because they can be more trusting, may own homes, may possess personal savings, may be socially isolated, and may be less tech savvy. For example, in its fiscal year 2024 budget request, LSC reported that more than one quarter of seniors dealt with consumer and finance problems such as consumer scams and abusive debt collection practices.
March 17, 2023
Fraud Corner: Complying with LSC Banking and Investment Guidelines
In light of recent bank failures, the Legal Services Corporation (LSC) Office of Inspector General (OIG) is providing this article, outlining steps to be taken should your grantee funds on deposit exceed the Federal Deposit Insurance Corporation’s (FDIC's) $250,000 deposit insurance limit.
March 13, 2023
Fraud Corner: Personally Identifiable Information
In a continuing effort to assist grantees and subgrantees in preventing cyber threats, the Office of Inspector General for the Legal Services Corporation is providing the following guidance to assist grantees in protecting personal data from a cyber-attack.
May 05, 2022
FBI Warns “Ransomware Attacks Straining Local US Governments and Public Services”
On March 30, 2022, the Federal Bureau of Investigation (FBI) warned local governments and public services of continued ransomware attacks that have resulted in a disruption of operational services, risks to public safety, and financial losses. The FBI urges local governments and public services to take steps to prevent and recover from ransomware attacks. The OIG also believes that ransomware has been and will continue to be a threat to LSC grantees. As a result, the risks identified by the FBI in the Private Industry Notification (PIN) apply equally to other organizations such as nonprofit businesses. Please review this alert and the FBI warning to ensure that your program has taken the steps necessary to minimize operational disruptions in the event of a ransomware attack.
March 31, 2022
Nearly all LSC grantees make use of credit cards and/or purchase cards tied to individual retailers (Sam’s Club, Office Depot, and others) to facilitate the process of making recurring or one-time expenditures. Credit cards and purchase cards offer grantees many advantages and allow grantees to make purchases with ease and efficiency.
June 14, 2021
The Office of Inspector General (OIG) for the Legal Services Corporation (LSC) is informing you of a recent scam, attempting to obtain $3500 from a grantee client as a “retainer fee.”
The client received a letter in the mail, purportedly from the grantee. The letter contained the grantee’s logo at the top and instructed the client to remit payment to the grantee at a P.O. Box that is not affiliated with the organization. The client’s name, address, and case number were included within the letter. The grantee believes the client information was gained through media exposure for the case, as well as through information that is publicly available.
January 25, 2021
Email Scams Targeting LSC and LSC Grantees
The Office of Inspector General (OIG) has confirmed that the Legal Services Corporation (LSC) and at least two LSC grantees have recently been the target of business email compromise (BEC) scams. These scams resulted in the successful diversion of grant funds and gift cards to cyber-criminals. This threat is ongoing, and we have reason to believe that the cyber-criminals may be targeting additional LSC grantees. We therefore strongly encourage you to take immediate preventative steps, described in more detail below. The preventive steps include training your employees on BEC schemes and enhancing your internal controls and data security. Please share this fraud advisory with all employees to prevent the success of future scams in our community.
July 20, 2020
ACH Transactions during COVID-19
OIG reviews have revealed that many LSC grantees have been using Automated Clearing House (ACH) transactions, in which payments are transferred electronically from one verified bank account to another. Previously, grantees’ degree of usage varied considerably from program to program.
April 20, 2020
FBI COVID-19 PSA Addressing Working in Virtual Environments
As part of its Fraud Corner Series, the Office of Inspector General (OIG) is providing Legal Services Corporation (LSC) grantees with the following information and resources relating to Coronavirus/COVID-19 frauds and scams.
April 09, 2020
As part of its Fraud Corner Series, the Office of Inspector General (OIG) is providing Legal Services Corporation (LSC) grantees with the following information and resources relating to Coronavirus/COVID-19 frauds and scams.
April 01, 2020
As part of its Fraud Corner series, the Office of Inspector General (OIG) is providing Legal Services Corporation (LSC) grantees with the following best practices to aid you in preventing and detecting thefts through third party payment (TPP) services. This article provides guidance on risk factors relating to TPP service thefts and measures employees can take to prevent and detect such thefts.
March 24, 2020
As part of its Fraud Corner Series, the Office of Inspector General (OIG) is providing Legal Services Corporation (LSC) grantees with the following information and resources related to Coronavirus/COVID-19 frauds and scams. Consistent with concerns discussed during a recent LSC COVID-19 LSC/grantee conference call, many of these scams could target LSC grantees and their client communities. The purpose of this Fraud Corner is to increase grantee awareness of possible scams and encourages grantees to proactively share information with clients to help prevent them from falling prey to scams.
December 19, 2019
As part of its Fraud Corner Series, the Office of Inspector General (OIG) is providing Legal Services Corporation (LSC) Grantees with the following information on “best practices” to help them identify and prevent fraudulent activity, and specifically to remind them of the impact nepotism may have on program activities. Nepotism occurs whenever a hiring, contracting or other business decision is made based on a family or other close personal relationship rather than the objective merits of the job candidate or business proposal.
June 24, 2019
Best Practices for Preventing and Detecting Insider Threats
As part of its Fraud Corner series, the Office of Inspector General (OIG) is providing Legal Services Corporation (LSC) grantees with the following information on “best practices” to aid a grantee in preventing and detecting insider threats. The purpose of this article is to provide guidance to grantees on the red flags, or circumstances providing the opportunity for insider threats, and the necessary policies and procedures to prevent and detect insider threats by current and former employees, contractors, and any other individuals who have, or once had, authorized access to grantee’s IT systems and functions.
March 25, 2019
Preventing Checking Account Fraud through Bank Reconciliations and Positive Pay
As part of its Fraud Corner Series, the Office of Inspector General (OIG) is providing Legal Services Corporation (LSC) Grantees with the following information on “best practices” to potentially aid grantees in identifying or preventing fraudulent activity. The purpose of this article is to remind grantees of check and bank frauds that impact LSC funds and to update previously recommended steps to counteract such attempted frauds with information regarding available technology.
October 18, 2018
Payroll and Direct Deposit Phishing Schemes
In recent weeks, two cybercrimes involving “phishing” emails targeting LSC program online payroll accounts were reported to the OIG; in these instances, the perpetrators were able to redirect direct deposits from employee payroll accounts to the perpetrator’s account. Thieves continue to implement new tactics to trick accounting and human resource officials to update employee direct deposit information, which could lead to the theft of the employee’s payroll check. Malicious actors may impersonate a trusted person or a person of authority to entice an employee to perform certain payroll related actions. Once the employee makes a direct deposit change based upon a fictitious email request, the thief has access to the employee’s payroll disbursement. Employees who use a self-service portal to update their personal information, such as bank routing and account numbers, are particularly vulnerable to this type of scam.
September 11, 2018
Spoofing Calls – Use of LSC’s Main Number to Defraud Consumers
The Legal Services Corporation (LSC), Office of Inspector General (OIG), has been made aware that LSC’s main number telephone was compromised in a spoofing scam. According to the Better Business Bureau (BBB)1, spoofing scams are committed by individuals who use technology to modify caller ID information to trick individuals into believing that an incoming call is local, or from someone they know. The scammers engage the individuals in conversation attempting to gain personal identifying information and/or elicit money. This scheme is known as “spoofing” or “spoof calling.”
July 16, 2018
An OIG investigation led to a former employee of an LSC Grantee agreeing to plead guilty to two counts of theft from a program receiving Federal funds. The former employee was a Program Manager overseeing a grant that utilized the services of volunteers and interns. The investigation found that the Program Manager submitted false travel claims for the volunteers and interns and then deposited the reimbursement checks into the Program Manager’s personal bank account. The individuals to whom the reimbursement checks were written had no knowledge that the travel claim had been filed in their name or that the reimbursement checks had been cashed and the funds retained by the Program Manager.
