UWS Woman Says She Lost Over $764,000 In Real Estate Hack, Sues Attorney for Incompetence

Leila Meltzer, an Upper West Side resident, has sued Debra M. Powell–her real estate attorney at the time she tried to buy an apartment in 2021–after a $764,100 wire transfer fell into the hands of cyber hackers impersonating the lawyer via email. Meltzer’s suit argues that Powell, who advertised herself as a competent attorney, “should have been aware of the danger of cybercrime, hacking and imposture.”

| 31 Aug 2023 | 06:28

Leila Meltzer, who claims that she lost more than $750,000 to hackers impersonating her real estate attorney in 2021, is looking to get her money back–namely by suing the attorney, Debra M. Powell, for legal malpractice and failing to take steps to secure her email.

The lawsuit filed by Meltzer, who was 75 years old at the time of the reported theft, details how her money was handed off to hackers. Intending to buy Apartment 5V at 205 West End Avenue, she entered into a contract of sale that would require her to pay off a $764,100 balance payment to finalize the purchase. For reasons not entirely elaborated on in her suit, Meltzer decided to forgo a mortgage loan from Chase to put up the money, particularly after running into “multiple obstacles” when it came to selling her current apartment and buying 5V on the same day.

Instead, she decided to settle on a cash purchase that would come out of her savings account at HSBC Bank. This is when the trouble reportedly began.

According to Meltzer’s suit, unidentified hackers impersonating Powell–who had gained access to her Rackspace email account–emailed Meltzer on October 21, 2021 with the following request: “Good news, we are looking at Monday for closing and funds need to be with us today or latest tomorrow. please for accuracy confirm the amount you are to wire if wiring will possible today and I will provide you with the wiring instruction for this payment.” In other words, the fraudsters had reportedly asked for a prompt wire transfer.

Four days later, after much back-and-forth with the hackers (Meltzer, of course, believed she was communicating with Powell), the wire transfer was complete. The hackers had siphoned Meltzer’s funds to a Fifth Third Bank account in Georgia, and had even convinced Meltzer to hand over her Social Security Number two hours after the wire transfer, under the pretext of needing it for “transfer taxes.” With the stolen money secured, the hackers stalled on informing Meltzer of where an apartment closing would be held. Indeed, it never would.

According to emails from Powell’s account that are excerpted in the lawsuit, it appears clear that she had no idea what was going on in her name during this time; two days earlier, she had emailed the broker for the purchase proclaiming that she was not aware that Meltzer was going to pay in cash. By October 27, all parties were aware of the debacle, with Powell telephoning Meltzer to inform her that she had never personally sent an email requesting a wire transfer.

At this point, Meltzer’s bank was unable to retrieve the pilfered funds, as the hackers had already whisked them out of the Georgia account.

Since the hackers are now presumably out of sight and out of mind, Meltzer’s suit argues that Powell is responsible for the theft, specifically due to her reportedly failing to take the necessary precautionary measures to protect her email communications. In other words, Meltzer claims that “Powell had a duty to provide competent representation, to act with reasonable diligence, and to maintain the confidentiality of client information and communications.”

Some of Powell’s reputed lapses in due diligence listed by the suit include: failing to enable two-step authentication on her Rackspace email, using digital communications instead of “oral communications” to confirm the accuracy of wire transfer requests, and indifference to “immediately” remedying the situation to retrieve the stolen funds.

The lawsuit also makes a second charge against Powell by accusing her of breach of contract, with the most intriguing tidbit being that “Powell did not send Meltzer a bill for legal services, tacitly admitting that she had failed to perform the services she had promised to provide.”

As remedy for the entire fiasco, Meltzer’s suit is seeking a monetary judgement against Powell of “no less than $760,100, plus punitive damages, attorney’s fees, accrued interest, costs, and the expenses of this enforcement action.”

“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,” Powell’s defense attorney told a local blog. He also indicated that Meltzer should continue to pursue retrieval of the funds with Georgia law enforcement.

Roger J. Bernstein, Meltzer’s attorney, did not respond to a request for comment by the West Side Spirit as of press time. Neither did Powell herself.