Catch Me If You Can: Imposters Target Real Estate Transactions
December 20, 2023
Reading time: 3 minutes
Real estate attorneys continue to be plagued by scammers hoping to score a huge lump sum payment in the sales transaction. The latest ploy? Con artists posing as sellers of real estate of which they have no interest. Sophisticated scammers are representing that they need a Power of Attorney to handle a real estate closing while they are out of the country. They provide what appear to be authentic documents, including a notarized POA, passport, and tax assessor card for the property, purporting to serve as evidence of their ownership of the subject property. Upon reliance of these documents, attorneys are executing closing documents as the POA for the alleged client/seller and then wiring the purchase price to the scammer.
Though it may seem hard to believe, this is happening and at a significant cost. Today, scammers are patient and increasingly sophisticated making the red flags harder to see. They request and sign engagement agreements and provide what appear to be legitimate, notarized documents. So, what steps can be taken to avoid becoming a victim of this new scheme?
- Verify the address and phone number provided – This may mean having an investigator confirm the purported client’s local address in person. Although it may seem simple, see if you can contact the client at the phone number associated with the address they provide.
- Perform due diligence on the real property – Consider hiring an investigator or have someone in your office visit the real property and pull all the property records, including assessor records, related to the property to review for any inconsistencies.
- Analyze signatures – Compare signatures on the various documents your client provides. If they have the documents “notarized,” verify the identity of the notary and contact them by phone to confirm they are legitimate.
- Closely monitor the wire instructions and transaction – Any discrepancies with the delivery of the wire instructions should set off an alarm in your mind. For example, last minute changes to the instructions and any notice from the bank concerning issues with the wire should raise a red flag. If you find yourself attempting multiple wire transfers, it may be too late.
- Create and utilize a verification protocol – Have another attorney or paralegal go over the file and any correspondence related to the transaction with a fine-tooth comb. The language used by the “client” may not have seemed odd to you at first, but another set of eyes may question it. See if your bank has any fraud prevention protocols in place or if it can check account numbers before the actual transaction occurs.
- Conduct the closing in person – While an “old-school” approach, closing the deal in person may be the most risk-averse way to ensure your client is who they say they are. Although not as convenient as an electronic closing, if you have any question in your mind as to the validity of the documents provided or the circumstances surrounding the transaction, require the parties to appear in your office.
You simply cannot be too careful when it comes to real estate transactions, especially those involving wire transfers. Although it is easy to be lulled into thinking the transaction is above board, stay vigilant and trust your instincts.
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