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Top 9 Real Estate Wire Fraud Cases Of 2017 (US)

Top 9 Real Estate Wire Fraud Cases of 2017 (US)

2017 was a banner year for wire fraud in real estate. According to statistics from the FBI, nearly $1 billion in real estate transactions were the target of real estate wire fraud. Each one of these top nine cases of wire fraud across the U.S. in 2017 will remind you just how easy it is to lose your life savings, your credibility and your business to crafty thieves and lax digital security.

*Note: Compromised refers to the party whose identity was targeted and represented fraudulently in the scheme

#1: A Cool $1.5 Million in the Nation’s Capital

Location: Washington D.C.
Amount Stolen: $1.5 million
Compromised: Federal Title & Escrow
How the Cyber Criminals Pulled Off the Heist: A phishing scam allowed fraudsters to gain access to the title company’s email server and directly email clients with false wire instructions

Summary: Buyers Sean Smith and Erin Wrona are now suing Federal Title and Escrow to get their $1.5 million back, but also another $5 million in damages for violating the RICO Act, because the couple alleges that they haven’t seen any evidence that Federal Title was hacked and that the company may have been in on the scheme. A Federal Title spokesperson vehemently denied this accusation.

#2: NY Judge Loses $1 million

Location: New York City
Amount Stolen: $1,057,500
Compromised: Real Estate Lawyer
How Cyber Criminals Pulled Off the Heist: A buyer wired her apartment purchase funds based on fraudulent wire instructions sent by criminals

Summary: Demonstrating that no one is too smart to be a victim of wire fraud, New York State Supreme Court Justice Lori Sattler was duped out of over a million dollars while trying to purchase a new apartment. The money ping ponged from a bank in Arizona and ended up in Hong Kong. Adam Leitman Bailey, another real estate attorney in the area, said he thought the con was likely an “inside job.” “Someone at the bank, someone at the law firm [involved in the deal],” said Bailey. “Someone related to the transaction tried scamming the judge. Normally clients don’t get these emails, only lawyers do. It was someone who had to have known she was selling this apartment.”

#3: Nearly Half Million Missing in Maryland

Location: Baltimore, Maryland
Amount Stolen: $411,578
Compromised: Unknown
How the Cyber Criminals Pulled Off the Heist: Details haven’t been released by the FBI, but they cited Business Email Compromise as the source.

Summary: Two men from Ghana have been charged with money laundering after one of them received exactly $411,578 in their bank account from the other, the same day that that exact amount was diverted from a real estate transaction with compromised wire instructions. Although the victims have not come forward publicly, “Victim A and Victim B advised that they now live paycheck to paycheck as a direct result of the fraud perpetrated against them,” according to FBI agent Samantha Shelnick.

#4: Fraudsters Make Off With Chicago Couple’s Life Savings

Location: Chicago, Illinois
Amount Stolen: $307,000
Compromised: Unknown
How the Cyber Criminals Pulled Off the Heist: Fraudster’s spoofed the email of a real estate attorney’s assistant, sending false wire instructions via email

Summary: It’s not clear who got hacked in this scheme that stole William and Nancy Skog’s life savings – the real estate attorney, title company Citywide Title Insurance, the realtor, or the Skog’s themselves. But what is clear is that the hackers had a bevy of data on the transaction; their email with the fraudulent wire instructions included an attachment on the attorney’s letterhead with the address of the home, title insurance company information and the exact balance owed.

#5: Mile-High Heist Bankrupts Denver Couple

Location: Denver, Colorado
Amount Stolen: $272,535.96
Compromised: Realtor and Title Company
How the Cyber Criminals Pulled Off the Heist: Hackers posed as both the couple’s real estate agent and then their title agent sending false wire instructions with spoofed email addresses

Summary: Couple James and Candace Butcher are now living in their son’s basement, instead of the Denver area home they had planned on purchasing to be closer to their grandchildren. Their entire downpayment and life savings – over $270,000 – was wired away to fraudsters when a fraudster, posting as the couple’s title agent with the correct name and exact amount of the transaction, emailed the couple false wire instructions just minutes before the real wire instructions were about to be sent. The couple is suing the bank for failure to initiate the proper response with the FBI, as well as their real estate agent, their title company and the mortgage broker for failure to use proper security measures.

#6: “Bring the Check To Closing”

Location: Grand Haven, Michigan
Amount Stolen: $135,000
Compromised: Real Estate Agent
How the Cyber Criminals Pulled Off the Heist: Spoofing the real estate agent’s email address to send phony wire instructions

Summary: When Tom Erickson’s real estate agent said, Did you get my e-mail yesterday? About bringing the check to the closing?” he knew something was wrong. He had wired the money for the property he was buying the day before. Thankfully, Tom’s real estate agent knew the owners of CertifID, who had experience with wire fraud and helped him get most ($120,000) of his money back.

#7: Sticky Fingers Steal Utah Couple’s Retirement Plans

Location: Peyton, Utah
Amount Stolen: $91,000
Compromised: Real Estate Agent
How the Cyber Criminals Pulled of the Heist: Scammers spoofed the email of an elderly couple’s real estate agent, sending over wire instructions and adding “‘I will be in a workshop all day, so don’t try to call me.”

Summary: Anne and Acell Bown didn’t even know they had wired their money into the hands of fraudsters until the title company contacted their real estate agent, Carrie Butterfield, and asked her why the Bowns had wired the incorrect amount for their closing on their new home. “My response was ‘I never told the Bowns to send a wire,” Butterfield said. The couple was still working to be able to buy the home, with their family and friends fundraising to help them recover their downpayment.

#8: Real Estate Analyst Loses $73,000 Buying First Home

Location: Phoenix, Arizona
Amount Stolen: $73,136
Compromised: Mortgage Company
How Cyber Criminals Pulled off the Heist: Scammers hacked into the email servers of Primary Residential Mortgage and used their data to target customers

Summary: First-time homebuyer Jack Padden, a senior financial reporting analyst at VEREIT, a real-estate investment company, was duped into wiring his $73,000 down payment into the hands of thieves. Thankfully, Primary agreed to refund his stolen down payment, which allowed Padden to go ahead with his home purchase.

#9: Style Blogger’s Savings Stolen by Scammers

Location: San Antonio, Texas
Amount Stolen: $52,660.57
Compromised: Title Company
How Cyber Criminals Pulled Off the Heist: Scammers sent a last-minute email, impersonating the title company, apologizing for having sent the wrong wire instructions

Summary: Although this case may be the smallest on the list in terms of the amount of money stolen, it was arguably the biggest in terms of publicity. Shannyn Allen, style blogger at FrugalBeautiful.com, was heartbroken when the $50K she had painstakingly saved for a downpayment on “the only house in San Antonio in our price range,” was stolen when thieves sent her fraudulent wire instructions right before her closing. Thankfully, quick thinking and dogged determination on Allan’s part got her all but a few hundred dollars back.

Since most real estate wire fraud cases go unreported in the media or even to the FBI, these 9 cases represent just the tip of the iceberg when it comes to the impact of this growing crime. It’s more important than ever to protect yourself and your business from wire fraud. Learn how CertifID – Wire Fraud Protection can help you have peace of mind for your business and your clients.        

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