1) It is highly inflammatory.
2) It asks that you send a copy on to everyone you know.
3) It does not mention any names. References to a "friend of a friend", or an
unnamed relative, such as "my cousin", or "some girl/boy/man/woman"
are highly suspicious.
4) It does not cite any specific sources ("the NY Times" is not
a citation -- "the January 22, 1996 edition of the NY Times" is,
though).
5) It does cite sources, but the sources cannot be found. Anyone can
tag onto a piece of e-mail a bogus source to make it sound more authoritative.
6) It does not say exactly when this event occurred. "Last month" is a
relative term that means "the month before the one that I, the reader, am currently
in". If the story has been circulating on the Internet for three years (not unusual
for urban legends), then "last month" becomes completely meaningless unless
there is a specific date mentioned.
7) It says, "THIS IS A TRUE STORY!" That's an automatic warning flag.