Dear Linda;

The experience you related is actually a common hoax, but I have never heard of it applied to teaching English. It's usually perpetrated on sales websites like ebay or craigslist. Here is how it usually works:

You list something for sale at a price of $2,000. A buyer pops up who is happy to pay your price, no questions asked. So you're happy.

For payment, the buyer says he has someone who owes him $10,000; this person could be in your country or any other country. The buyer says this other person will send you a cashier's cheque for $10,000. When you receive the money, you are to deposit it in your bank account, keep the $2,000 for yourself and send the remaining $8,000 by Western Union to the buyer.

He always has some story about how it is more convenient or more tax-free for the money to flow through you.

Usually, the person puts a lot of pressure on you to wire that money to him as soon as the cheque arrives, and of course that is because the cheque won't clear.

All of the auction and sale websites have prominent warnings about this scam. Many people have been taken in by this one. You did the wise thing by waiting for the cheque to clear.