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FRAUD ALERT: Law Society of BC Issues Shelf Company Inquiries Warning

The following is an excerpt from a fraud alert recently posted to the Lawyers Indemnity Fund website (a division of the Law Society of British Columbia), with a scenario that could also threaten Nova Scotia lawyers:

"BC lawyers have reported receiving random phone calls and emails from individuals who ask if they have shelf companies for sale, or ask for referrals to other law firms for the same purpose. In some instances, the individual making the inquiry says they need the company to be incorporated in BC or Alberta before January 2020, to support a financing transaction or backdate invoices. In other instances, the individual says they are looking for companies incorporated before 2020 in any Canadian province or territory, without providing a reason. Callers may supply a “company acquisition form” for the seller to complete with information about the company. They may also refer to receiving more information from their executive assistant or associate.

Fraudsters may attempt to use shelf companies to deceive unsuspecting third parties into believing that a company has been in operation for a number of years when, in reality, it hasn’t been used since its formation. Be on guard against being used to facilitate dishonesty, crime or fraud."

Review the NSBS regulations made pursuant to the Legal Profession Act, S.N.S 2004, c.28, including 4.13.26 and 4.13.29; and the Nova Scotia Barristers’ Society, Code of Professional Conduct, Halifax: Nova Scotia Barristers’ Society, 2012, including rule 3.2-7 and its commentaries.

For tips to avoid being victimized, and to report or seek advice on dealing with fraud and scam attempts, contact Cynthia Nield at or 902 423 1300, x346.