While this type of fraud has been around for a while, it’s becoming more sophisticated, according to attorney Edward W. Hale with the Hale Law Group in Fort Myers.
“The fraudsters are now using the names of real people, mostly in the United Kingdom,” says Hale. “Two of the recent names being used are Dr. Timothy Perrin, an oncologist in Leeds, England, and Dr. Andrew Cowley, a pediatrician in Wales.” Hale says there’s no reason to believe the real Perrin and Cowley have anything to do with the scam.
A real estate agent is usually the first contact in the scam. An overseas buyer calls an agent or broker and says he or she wants to buy property. The buyer then has a “financial broker” send information showing that they have the financial ability to do so. Next, they ask for the name of an attorney.
The scam comes into play when the “buyer” sends a fake check – usually a cashier’s check from Canada – to the attorney to cover the cost of the property and possibly a legal retainer. They ask the attorney to deposit the check into a trust account right away and to verify the deposit once done.
Once the check is deposited in the trust fund, the scammers come up with a reason to get at least part of it back, and they request that it be wired to a foreign bank account, usually in Asia.
Sometime later, the attorney’s bank calls to say the original check was fake, making the attorney’s trust fund short by possibly hundreds of thousands of dollars.
“I will only accept wires for cash to close funds or lender funds,” says Hale. “Cashier’s checks are essentially obsolete now.”
While most overseas buyers are legitimate, Hale suggests that real estate agents can take one quick step to avoid wasting time on these fake transactions: Do a Google search with buyer’s name and the word “scam.”
“Usually someone else has been solicited by the scammer,” explains Hale. “I am seeing a lot of these now.”
Hale offers other suggestions that might help short-circuit a problem early in the process:
• Scammers tend to target vacant land, particularly waterfront vacant land, because there’s no occupant to expose the fraud. Hale says he won’t even write title insurance on vacant land anymore.
• Scammers who steal sellers’ identities often target legitimate foreign owners for two reasons: If both buyer and seller reside outside the U.S., they may make the same grammatical errors in emails; and any request to send sale “proceeds” to a foreign bank would appear more legitimate.
• To avoid problems down the road, agents should FedEx a letter to the owner of record listed on the county’s tax rolls. The letter should say that someone contacted the agent about the sale of the property, and that the agent is simply confirming that it is in fact the true owner. Avoid snail mail. It’s too slow, particularly in foreign countries.
• Scammers usually have an email address through one of the large services, such as Yahoo, Gmail, Hotmail, etc., rather than a personal website address.
• Scammers often pretend to be doctors or other professionals because the title immediately implies that they have a lot of money.
© 2012 Florida Realtors®
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