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Old 02-26-2016, 08:06 AM
 
Location: James Island, SC
3,858 posts, read 4,577,967 times
Reputation: 1393

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This happened locally and the following message was put out by a local broker involved in the situation. It should be required reading for anyone involved in a real estate transaction. Always confirm with a phone call the wiring instructions sent by the closing attorney.

Subject: Wiring Instructions SCAM - PLEASE READ

I wanted to let everyone know of a very serious scam involving an email containing false wiring instructions that ended up defrauding a Buyer of nearly $150,000 yesterday. We represented the Seller in the transaction, which did not close of course, but the fact that it was not our buyer is immaterial.

Here is the scenario, a Buyer, in preparation for a closing, contacted the attorney's office to ask for wiring instructions which they were sent in an email from the lawyer's paralegal/office staff. Shortly after, the Buyer got a second email which said there was a problem with the original wiring instructions and provided a new set of instructions. The email appeared to come from the same person at the closing attorney's office who sent the first email. This all took place on a Friday, with the closing set for the following Tuesday. There were then several additional emails, Friday afternoon, pushing the buyer to go ahead and wire the money. The Buyer sent the second set of wiring instructions to their bank and wired the funds needed for closing, just under $150,000. Of course, the second set of instructions were fraudulent.

Please make sure to verify all unusual activities, such as a change in wiring instructions, an email directing someone where to send earnest money, etc. with a phone call and do not assume that because an email says it is from someone that it actually is. We had something similar happen internally with an email request, from one of our own agents, to wire earnest money for a closing to a certain account, which was stopped when our team member called the agent to verify the request.

Finally, if you are using a home based email, that does not include two step authentication, as required by and set up through our IT department, you are more vulnerable and ned to protect yourself and your clients. Apparently, the Buyer's email had been compromised, with people just monitoring the account and lying in wait. When emails about wiring instructions began being circulated, the thieves sent the false email to take advantage of the situation and of the Buyers.

Just be careful, look for red flags and things that seem odd and always be attentive when we are dealing with the transfer of money.

Please feel free to forward this email to other agents, brokers or attorneys you work with so we can spread the word and this does not happen to anyone else.
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Old 02-26-2016, 09:01 AM
 
Location: Charleston, SC
480 posts, read 502,338 times
Reputation: 303
Wow, that's crazy. It seems the closing attorneys office is completely negligent or incompetent. I wish you could post the closing attorneys info. Is it a local firm?
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Old 02-26-2016, 09:13 AM
 
Location: James Island, SC
3,858 posts, read 4,577,967 times
Reputation: 1393
Actually I have asked for the ID of the closing Atty but it has not been disclosed (to me at least). I wouldn't label them as negligent without knowing more though. It's unclear who's email was hacked or how the scammers knew the closing was taking place. They could be hacking random emails looking for home buyers and monitoring them for interesting opportunities.
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Old 02-26-2016, 09:40 AM
 
Location: Charleston, SC
480 posts, read 502,338 times
Reputation: 303
Seems unlikely it was just this random email. If they got this email, they would have access to other emails from the firm (or sender). I'm not involved with any real estate deals, but I do have ongoing commercial business deals. I'd be concerned about my contracts and legal dealings floating around out there. I'm sure the FBI is involved by now. Hope it's not a local firm.
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Old 02-26-2016, 09:44 AM
 
Location: Charleston, SC
480 posts, read 502,338 times
Reputation: 303
I just reread the post. It's the buyers email. So, no worries...
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Old 02-26-2016, 10:47 AM
 
5,257 posts, read 6,183,331 times
Reputation: 3125
I closed on a property at the start of the fall and my attorney (Lafond & Lafond) was actually asking for everything to be wired instead of a cashiers check because another local firm had taken a forged cashier's check a year or two ago.


As always- a few bad apples ruin things for those of us who keep it between the lines.


Was there anyway to trace the wire and try to pursue the lost money?
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Old 02-26-2016, 10:58 AM
 
Location: James Island, SC
3,858 posts, read 4,577,967 times
Reputation: 1393
It can be anyone's email. Apparently the scam has been out for a while though it may be new in this area. This article explains it a bit:

Warning: Realtor email scam picking up speed
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Old 02-26-2016, 11:04 AM
 
Location: James Island, SC
3,858 posts, read 4,577,967 times
Reputation: 1393
Quote:
Originally Posted by mrpeatie View Post
I closed on a property at the start of the fall and my attorney (Lafond & Lafond) was actually asking for everything to be wired instead of a cashiers check because another local firm had taken a forged cashier's check a year or two ago.


As always- a few bad apples ruin things for those of us who keep it between the lines.


Was there anyway to trace the wire and try to pursue the lost money?
As I understand it, once the wired money is received, it's irretrievable. I'm wondering how hard it is to play the scammer if you realize it is happening and to have the authorities waiting for them on the other end.

I think wired is still considered the safest method and it certainly is for the banks who catch no liability in this scam.
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Old 02-26-2016, 03:38 PM
 
5,257 posts, read 6,183,331 times
Reputation: 3125
Most of us who don't close on real estate regularly forget just how many people tend to know the property details and schedules involved in closing. Off the top of my head: both the listing and buyers agents firms, mortgage provider, their underwriters, sometimes the appraiser, the insurance company since you have to provide proof of insurance if there is loan on the property, someone at your bank if you are wiring a down payment like I did, and possibly someone in the HOA that needs to provide community information or transfer property access.


As often as some developers, agents/brokers, insurers and lenders work together I can imagine someone fairly familiar with a few of their deals could string together a coherent enough email to look like it 'belongs' when it is really fishing for more info. This is also the reason some groups will not let you email any financial forms since they are unsecure unless you have an encryption system.
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Old 02-28-2016, 09:02 PM
 
Location: James Island, SC
3,858 posts, read 4,577,967 times
Reputation: 1393
It's such a simple scam and involves such large sums that I don't understand why all closing attorneys don't put out a simple boiler plate warning attached to all wiring instructions. The scam is easily thwarted with a little advance knowledge.
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