Fraudulent Transfers of Property Listed for Sale on the Internet
Scammers are taking advantage of the active real estate market. Recently, I was contacted by a client who received a call from a lawyer in another state to verify a signature on a deed for the client’s lot being sold; however, my client was not selling the lot. After contacting the police department and property owners’ association, my client learned that a scammer attempted to sell the lot not once but twice with cash closings scheduled in the same week at the end of the month. The first transaction was prevented thanks to the out-of-state lawyer’s call to my client. The second transaction was not prevented, and a purchaser’s funds were disbursed to the scammer’s account. As part of the investigation, the notary who purportedly notarized the deeds was contacted and explained the notary’s seal had been stolen—the notary had not notarized the deeds. We also learned that the scammer sent packages from the same city, and the telephone number associated with the listing of the property is associated with other listings on the internet. Law enforcement is investigating, so hopefully the fraudster will be located and face charges.
The fraudulent transactions included a South Carolina licensed Realtor and reputable South Carolina law firms. Although title was held in the names of a husband and wife, the scammer provided a falsified driver’s license for only the husband with the correct name and address, but the signature was digital and the name was signed last name first. In each transaction, the law firms sent documents to the seller to be signed for closing. When the scammer signed the deeds, the signatures of the sellers were only the first names. In the first closing, the transaction stopped. In the second closing, the seller’s law firm requested that the documents be signed again correctly. The documents were signed again, returned, and the closing occurred. The sales proceeds were sent to an account supposedly in the name of the sellers’ daughter. There certainly were warning signs that were missed, but in the haste of completing month-end closings those signs were overlooked.
This alert is a cautionary tale to assist you in identifying illegal activity, but, of course, not all internet listings are illegitimate. When you are working with an out-of-town seller, verify the seller’s identity. If something seems “off”, trust your intuition and discuss the situation with your Realtor, Broker, closing lawyer, or title insurance agent. Undeveloped lots without mortgages of record seem to be the target on these types of scams, so pay close attention to lot sales – particularly when listed for sale on the internet or social media platforms. Apply particular scrutiny to mail-away closings particularly should be scrutinized. If you are involved in a sale with an unfamiliar seller, you should be especially vigilant in confirming the identities of the parties—to the extent possible, get seller’s contact information from independent sources rather than from participants in the transaction. Have someone else review information with you. Anything that appears unusual should be examined carefully. Sometimes you need to pick up a phone and call sellers for verification. Explain that fraud unfortunately is a very real occurrence, and you want to assure that everything is handled properly for all parties involved.
For more information on this topic, please contact Sarah Robertson at firstname.lastname@example.org or (843) 815-2171 or your lawyer at Burr & Forman LLP.
- (843) 815-2171