An Upper West Side woman claims she was swindled out of over $750,000 when her real estate lawyer’s email was hacked. And now she’s suing to get it back.
Leila Meltzer was trying to buy a new apartment, and she thought she’d found one, upgrading from her studio at 205 West End Avenue (part of Lincoln Towers) to a one-bedroom apartment in the same building. The 75-year-old retired nurse hired real estate attorney Debra Powell to “advise, assist and represent her” on the purchase. She’d gotten approval from the co-op board, made an $84,900 downpayment, and even begun the process of selling her own apartment, receiving a $43,250 downpayment from a buyer of her own. That’s when things started to take a turn.
According to court papers, when the time to make the rest of the payment (totaling $746,100) approached, Meltzer received an email that she thought was from Powell. Instead, it was the cyber criminals who had hacked Powell’s email. They asked Meltzer to confirm the amount, saying they would follow up by sending instructions to wire the money. When they did, those instructions led to a separate account at a bank in Georgia. Meltzer wired the money, only finding out about the fraud two days later when Powell called to say the seller had not received the wire transfer.
When she reached out to her bank to get the money back, it was too late. The money had already been withdrawn. Without the money, Meltzer had to pull out of the apartment purchase, losing $14,000 of her downpayment in the process, bringing her total losses to $760,100. She’s now suing Powell for that amount “in compensatory damages, plus punitive damages, attorney’s fees, accrued interest, costs, and the expenses of this enforcement action.”
The lawsuit accuses Powell of legal malpractice and breach of contract, claiming Powell failed to “take even the most rudimentary steps to protect Meltzer from cyberfraud.”
Among other things, the suit alleges Powell “never advised Meltzer to orally confirm any wire instructions” and didn’t employ two factor authentication on her email account. That would require Powell to enter a code received via a second device (such as a cell phone) after entering her password, which, according to the suit, would make it “far more difficult for an unauthorized user to ‘hack’ into the system.”
According to Meltzer’s attorney, Roger Bernstein, she “cannot get a full night’s sleep and is hoping for justice.”
ILTUWS spoke with Powell’s attorney who issued the following statement:
“While It is unfortunate that Ms. Meltzer fell victim to a criminal cyber scam, her claims against Ms. Powell are unfounded and Ms. Powell will defend against these claims vigorously. These types of claims against attorneys have been repeatedly dismissed by New York courts. We urge Ms. Meltzer to continue to cooperate with law enforcement, including the Georgia Attorney General, which we understand is investigating the criminals responsible for this crime, and also pursue recovery from any funds remaining in the recipient bank account.”
The NY Post was first to report on this story.