Thank you so much for sharing! I wish more would have been done to bring attention to the scam itself since I believe it's still going around. As recently as 5 days ago I had a very similar situation play out. I sniffed it right out and reported them to Craigslist. However as this article points out some people are far more trusting. Here is the email I received after having sent them a proposal. Dollar amounts have been X'd out:

"Thanks for taking your time to get me an estimate so grateful.i am ok with your estimate and ready to proceed so i will be depositing $XXXX using my credit card so what the merchant service you do make use of to charge credit cards ? also i will be needing a lil favor from you regarding getting the content and logos for my site. the favor i need is i will be giving you my card infos to charge for $XXXX, you will hold $XXXX as deposit for my service and the remaining $XXXX you will help me make a cash deposit of it into the account of the project consultant so you can get the content and logos for my site. I need this favor from you cos the consultant does not have the facility to charge credit cards and am presently recuperating from the diagnosis of lung Cancer and am still in the hospital, So i will be grateful if you can handle that for me and not to worry about the charges just bill me for the charges."

It's so unfortunate that things like this happen. Thankfully articles like this will help freelancers be more cautious in the future.