How a Title Company Disrupted a $2.7M Real Estate Wire Fraud Attempt
Fast action by the title company stopped the million-dollar wire fraud loss.
How a Title Company Disrupted a $2.7M Real Estate Wire Fraud Attempt
Fast action by the title company stopped the million-dollar wire fraud loss.
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Will Looney
5
Fraud Recovery
Aug 19, 2024
Imagine finding out $2.7 million had been lost to real estate wire fraud in a matter of moments. This was the reality for a title company and homebuyer Sharon* in early 2024.
Sharon and her husband Doug* were in the final stages of the exciting — albeit stressful — process of buying a new home. Working with their escrow officer, they had one big step left in the process: wiring the funds for their house to the tune of $2.7 million. But what Sharon and Doug didn’t realize was that for the past week, they hadn’t been emailing their escrow officer as expected; a fraudster had infiltrated their communications, and they were about to fall victim to real estate wire fraud.
The frightening reality is that real estate wire fraud can happen to anyone. Scammers are getting smarter and savvier than ever before. You can do everything right, and it can still happen. So let’s take a look at this case and what we can learn from it.
How real estate wire fraud happens
The scam began when fraudsters infiltrated Sharon, Doug, and the escrow officer's communications using fake email addresses. Their goal was to impersonate all three parties, learn about the deal, and intercept the closing funds.
The fraudsters began a long con in the days leading up to the transfer, priming Sharon to wire their money to the fraudulent account. About a week before the transfer was to occur, Sharon started receiving emails she thought were from their escrow officer asking for updates about when the money would be sent. Then the email came that set everything into motion–a notice that the wiring instructions had changed.
Sharon and Doug were on vacation at the time, and Sharon notified them that she would wire the funds when they returned home. A couple of days later, Sharon sent the wire. But it didn’t go to the title company—it went to the fraudster.
$2.7 million has just been sent to the wrong bank account.
Partners in crime detection and recovery
The scale of Sharon and Doug’s funds theft is shocking. But thankfully, the title company had put into place precautions should an event like this occur. And thanks to their proactive partnership with CertifID, they turned the tables on cybercriminals.
When it was time to actually wire the funds, the title company submitted two Send requests for this transaction, and, both times, the software signaled multiple indications of fraud. Having CertifID in place allowed them to quickly identify the fraud and notify Sharon.
Unfortunately, the fraudster had gotten to the buyers first as a result of the spoofed emails. As a result, Sharon had already sent the wire transfer for $2.7 million directly from her bank account to the fraudster’s account. When the head of the title company found out what happened, he immediately jumped into action, and contacted CertifID to set the recovery process into motion.
Nate Stephens, Manager of Fraud Recovery Services at CertifID, was assigned to the case and quickly took action to diagnose and investigate the incident, working side by side with Sharon and the title company, the bank, and the U.S. Secret Service. Nate knew time was of the essence. If the right actions and connections are executed quickly, funds can be restricted before they are withdrawn in cash, converted to cryptocurrency, or transferred internationally—all of which typically lead to a failed recovery.
It can’t be overstated how stressful and devastating losing funds to real estate wire fraud can be. Sharon was afraid that it was too late to recover her family’s savings or their home, which is a very real fear and a reality for many victims.
The minutes ticked away as Nate and Sharon worked to provide the details needed to trace the funds transfer and restrict the fraudulent bank account. Though it felt like hours, only one hour and seventeen minutes after their initial phone call did they receive confirmation that the receiving bank account had been successfully frozen.
The real excitement came when Nate informed Sharon that nearly all the funds would be recovered. What did they lose in the end? Only $380. As Nate told Sharon the amazing news, she asked him, “So I’m good? I can breathe?” to which Nate happily replied, “Yes, you can breathe!”
Sharon and her husband’s terror and stress were over. Thanks to the title company’s proactive response and CertifID’s long-standing partnership with the U.S. Secret Service, nearly all of the funds were returned.
Warning signs
At CertifID, we love when we can successfully recover funds, but in an ideal world, no one would need our recovery services because they’d be empowered to disrupt fraud well before money changes hands.
Whether you’re a real estate professional, buyer, or seller, it’s important to be aware of the warning signs of fraud.
- Fake email addresses: As we saw with this case, oftentimes fraudsters will use an email address that is very similar to the real one, except for one or two letters. While this can be difficult to spot, we recommend always double checking the email address from the sender on every email to make sure it’s correct. If anything looks off, contact the other party directly to make sure the email actually came from them.
- Typos: Emails from fraudsters are often riddled with typos, such as incorrect punctuation, missing spaces, strange capitalization, and misspellings. While anyone can make a mistake and one or two typos aren’t cause for alarm, multiple typos across multiple emails should be considered cause for concern. Also be on the lookout for other grammatical errors and inconsistencies, such as incorrect or unnatural syntax.
- Sense of urgency: Fraudsters will build a sense of urgency around sending the wire transfer. In a legitimate transaction, no one will rush or pressure a home buyer into sending a wire transfer immediately. If there is an urgency to the communication, this could be a red flag that something isn’t right.
- Only communicating through email: Fraudsters will make it clear that the only way to contact them is through email. This is a typical fraud tactic, since it’s much easier to impersonate someone over email. Real estate professionals can let their clients know that they can always call. Home buyers and sellers should not be restricted to one means of communication and should know they can call with questions or to confirm information. The fraudster in this story would only communicate via email; they made it clear phone calls were not an option.
- New wiring instructions: Fraudsters will often send new wiring instructions for the final payment, but in a legitimate transaction, wiring instructions are typically not changed in the eleventh hour. When starting the home buying process, it’s important that all parties know exactly how and when wire payments will occur. Real estate professionals should consider using one of our email signature templates to clearly let clients know what to do to keep themselves safe. In this case, the fraudster notified Sharon that there would be new wiring instructions and that she was not to use the previous ones.
When in doubt, confirm. It’s never a waste of time to make sure that there are no fraudulent activities occurring. Knowing the warning signs and using extra caution can save everyone a lot of devastation and loss.
A high price to pay
While this case had a positive financial resolution, there were other prices to pay. Initially losing $2.7 million cost all parties involved their peace of mind. Victims like Sharon and Doug face more stress, anxiety, and heartbreak than many of us can imagine. And some victims of real estate wire fraud aren’t ever able to recover their payments. The fraudsters claim their entire life savings, as well as their dreams of becoming homeowners.
“A fraud of this magnitude demands immediate attention and puts everyone on edge. Even though the funds aren’t yours, you can’t help but be drawn into the emotional turmoil of losing $2.7M and the impact that loss would have on the victims,” said Stephens. “Thankfully, the rapid response efforts led to a near-full recovery. It was a surreal outcome for the victims, and a testament to the efficacy of our partnership.”
When these cases occur, real estate professionals also suffer from stress and anxiety. They don’t want to see their clients suffer and want them to get their dream home. They may also experience financial and reputational loss. In some cases, they could even be held liable for the fraud, leading to significant time and money spent fighting in court.
Sellers are also impacted. Luckily, in Sharon’s case, they were able to work out a deal with the sellers to rent the house until the money was returned to their account and they could wire the funds. When the funds cannot be completely recovered, the sellers never get paid and the buyers lose the house. The sellers then have to repeat the whole process of listing and selling their home, which is especially devastating to sellers counting on a quick sale to finance their new home or make another major life transition.
Real estate wire fraud is a nightmare for everyone involved. The best way to avoid it is to arm yourself with knowledge like this title company and to work with a trusted partner to ensure that every transaction is secure.
*Names have been changed to protect privacy
Content Marketing Manager
Will is a Content Marketing Manager at CertifID. His multi-disciplinary experience as a copywriter and designer has powered growth for numerous consumer, tech, and real estate companies from the startup to enterprise level.
Imagine finding out $2.7 million had been lost to real estate wire fraud in a matter of moments. This was the reality for a title company and homebuyer Sharon* in early 2024.
Sharon and her husband Doug* were in the final stages of the exciting — albeit stressful — process of buying a new home. Working with their escrow officer, they had one big step left in the process: wiring the funds for their house to the tune of $2.7 million. But what Sharon and Doug didn’t realize was that for the past week, they hadn’t been emailing their escrow officer as expected; a fraudster had infiltrated their communications, and they were about to fall victim to real estate wire fraud.
The frightening reality is that real estate wire fraud can happen to anyone. Scammers are getting smarter and savvier than ever before. You can do everything right, and it can still happen. So let’s take a look at this case and what we can learn from it.
How real estate wire fraud happens
The scam began when fraudsters infiltrated Sharon, Doug, and the escrow officer's communications using fake email addresses. Their goal was to impersonate all three parties, learn about the deal, and intercept the closing funds.
The fraudsters began a long con in the days leading up to the transfer, priming Sharon to wire their money to the fraudulent account. About a week before the transfer was to occur, Sharon started receiving emails she thought were from their escrow officer asking for updates about when the money would be sent. Then the email came that set everything into motion–a notice that the wiring instructions had changed.
Sharon and Doug were on vacation at the time, and Sharon notified them that she would wire the funds when they returned home. A couple of days later, Sharon sent the wire. But it didn’t go to the title company—it went to the fraudster.
$2.7 million has just been sent to the wrong bank account.
Partners in crime detection and recovery
The scale of Sharon and Doug’s funds theft is shocking. But thankfully, the title company had put into place precautions should an event like this occur. And thanks to their proactive partnership with CertifID, they turned the tables on cybercriminals.
When it was time to actually wire the funds, the title company submitted two Send requests for this transaction, and, both times, the software signaled multiple indications of fraud. Having CertifID in place allowed them to quickly identify the fraud and notify Sharon.
Unfortunately, the fraudster had gotten to the buyers first as a result of the spoofed emails. As a result, Sharon had already sent the wire transfer for $2.7 million directly from her bank account to the fraudster’s account. When the head of the title company found out what happened, he immediately jumped into action, and contacted CertifID to set the recovery process into motion.
Nate Stephens, Manager of Fraud Recovery Services at CertifID, was assigned to the case and quickly took action to diagnose and investigate the incident, working side by side with Sharon and the title company, the bank, and the U.S. Secret Service. Nate knew time was of the essence. If the right actions and connections are executed quickly, funds can be restricted before they are withdrawn in cash, converted to cryptocurrency, or transferred internationally—all of which typically lead to a failed recovery.
It can’t be overstated how stressful and devastating losing funds to real estate wire fraud can be. Sharon was afraid that it was too late to recover her family’s savings or their home, which is a very real fear and a reality for many victims.
The minutes ticked away as Nate and Sharon worked to provide the details needed to trace the funds transfer and restrict the fraudulent bank account. Though it felt like hours, only one hour and seventeen minutes after their initial phone call did they receive confirmation that the receiving bank account had been successfully frozen.
The real excitement came when Nate informed Sharon that nearly all the funds would be recovered. What did they lose in the end? Only $380. As Nate told Sharon the amazing news, she asked him, “So I’m good? I can breathe?” to which Nate happily replied, “Yes, you can breathe!”
Sharon and her husband’s terror and stress were over. Thanks to the title company’s proactive response and CertifID’s long-standing partnership with the U.S. Secret Service, nearly all of the funds were returned.
Warning signs
At CertifID, we love when we can successfully recover funds, but in an ideal world, no one would need our recovery services because they’d be empowered to disrupt fraud well before money changes hands.
Whether you’re a real estate professional, buyer, or seller, it’s important to be aware of the warning signs of fraud.
- Fake email addresses: As we saw with this case, oftentimes fraudsters will use an email address that is very similar to the real one, except for one or two letters. While this can be difficult to spot, we recommend always double checking the email address from the sender on every email to make sure it’s correct. If anything looks off, contact the other party directly to make sure the email actually came from them.
- Typos: Emails from fraudsters are often riddled with typos, such as incorrect punctuation, missing spaces, strange capitalization, and misspellings. While anyone can make a mistake and one or two typos aren’t cause for alarm, multiple typos across multiple emails should be considered cause for concern. Also be on the lookout for other grammatical errors and inconsistencies, such as incorrect or unnatural syntax.
- Sense of urgency: Fraudsters will build a sense of urgency around sending the wire transfer. In a legitimate transaction, no one will rush or pressure a home buyer into sending a wire transfer immediately. If there is an urgency to the communication, this could be a red flag that something isn’t right.
- Only communicating through email: Fraudsters will make it clear that the only way to contact them is through email. This is a typical fraud tactic, since it’s much easier to impersonate someone over email. Real estate professionals can let their clients know that they can always call. Home buyers and sellers should not be restricted to one means of communication and should know they can call with questions or to confirm information. The fraudster in this story would only communicate via email; they made it clear phone calls were not an option.
- New wiring instructions: Fraudsters will often send new wiring instructions for the final payment, but in a legitimate transaction, wiring instructions are typically not changed in the eleventh hour. When starting the home buying process, it’s important that all parties know exactly how and when wire payments will occur. Real estate professionals should consider using one of our email signature templates to clearly let clients know what to do to keep themselves safe. In this case, the fraudster notified Sharon that there would be new wiring instructions and that she was not to use the previous ones.
When in doubt, confirm. It’s never a waste of time to make sure that there are no fraudulent activities occurring. Knowing the warning signs and using extra caution can save everyone a lot of devastation and loss.
A high price to pay
While this case had a positive financial resolution, there were other prices to pay. Initially losing $2.7 million cost all parties involved their peace of mind. Victims like Sharon and Doug face more stress, anxiety, and heartbreak than many of us can imagine. And some victims of real estate wire fraud aren’t ever able to recover their payments. The fraudsters claim their entire life savings, as well as their dreams of becoming homeowners.
“A fraud of this magnitude demands immediate attention and puts everyone on edge. Even though the funds aren’t yours, you can’t help but be drawn into the emotional turmoil of losing $2.7M and the impact that loss would have on the victims,” said Stephens. “Thankfully, the rapid response efforts led to a near-full recovery. It was a surreal outcome for the victims, and a testament to the efficacy of our partnership.”
When these cases occur, real estate professionals also suffer from stress and anxiety. They don’t want to see their clients suffer and want them to get their dream home. They may also experience financial and reputational loss. In some cases, they could even be held liable for the fraud, leading to significant time and money spent fighting in court.
Sellers are also impacted. Luckily, in Sharon’s case, they were able to work out a deal with the sellers to rent the house until the money was returned to their account and they could wire the funds. When the funds cannot be completely recovered, the sellers never get paid and the buyers lose the house. The sellers then have to repeat the whole process of listing and selling their home, which is especially devastating to sellers counting on a quick sale to finance their new home or make another major life transition.
Real estate wire fraud is a nightmare for everyone involved. The best way to avoid it is to arm yourself with knowledge like this title company and to work with a trusted partner to ensure that every transaction is secure.
*Names have been changed to protect privacy
Content Marketing Manager
Will is a Content Marketing Manager at CertifID. His multi-disciplinary experience as a copywriter and designer has powered growth for numerous consumer, tech, and real estate companies from the startup to enterprise level.
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