FBI: Hackers target homebuyers in $220 million real estate fraud

Buying Real Estate
One Northern California family preparing to buy a house got the shock of their lives. Money meant for the closing was hijacked, diverted to China and almost lost forever. It’s called real estate wire fraud and is an increasingly common crime, according to the FBI. CNBC’s Andrea Day reports. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi

Aaron and Lindsey Fisher found their dream home not far from where they lived in northern California.

It was a stunning, $1.4 million home with an expansive backyard and nearby trail where they could hike with their four sons.

“It seemed too good to be true almost,” Lindsey said. “Exactly what we wanted.”

And thanks to a family inheritance windfall, they could afford it.

But everything suddenly went wrong.

Aaron, a psychology professor at UC Berkeley, wired $921,235.10, a number to this day he cannot forget, from his account at Bank of America.

Two days later, the mortgage company called asking about the wire transfer. The company inquired where the money was wired to and Aaron nervously said, “Wells Fargo.”

He was stunned when the representative told him, “Aaron, we don’t have a Wells Fargo account. You need to call your bank immediately.”

Aaron called his wife. “We’ve been robbed,” he told her.

The couple was hit by what is known as real estate wire fraud, an increasingly common crime. According to the FBI, consumers have lost more than $220 million in schemes like this thus far in 2020, a 13% increase from the same period last year.

“All of a sudden, everything felt threatening,” Aaron said.

According to documents shared with CNBC, here’s what we’ve learned about how the fraud went down in the Fishers’ case: The home buyer was having an email conversation with his real estate agent and legitimate representatives from the title company. Hackers somehow inserted themselves into the conversation, using email addresses designed to look like one or more of the participants in the deal.

“All of us thought we were communicating with each other, and every time we sent an email, we were communicating with the criminals,” Aaron said.

Documents compiled by the Fishers show the fraudsters emailed digital copies of the real closing documents and wire instructions that looked real from the fake email account

“These were the real closing docs. And so, I opened the PDF. I inspected them. All the numbers were right,” Aaron said.

However, the attached wiring instructions contained the wrong account information.

“Somehow, the fraudsters had got hold of the real closing documents. And so that gave them some comfort, that this was a genuine email,” said Paul Llewellyn, an attorney who represented the Fishers.

The Fishers contacted the FBI, which assigned an agent to the case.

The FBI says this type of real estate wire fraud has been around for years, but now criminals are targeting high-end markets, like New York, Los Angeles and Palm Beach, and expensive homes.

“In certain markets, you could lose tens of millions of dollars with one sale,” said Steven Merrill, the FBI’s financial crimes section chief. “The ones [markets] that are most lucrative are the ones that they’re probably going to target.”

The Fishers’ money was wired to a real account number, but the account name on the fraudulent wiring instructions, Schlossberg & Associate, LLC., appears to have been made up.

» Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision
» Subscribe to CNBC: https://cnb.cx/SubscribeCNBC
» Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic

Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.

The News with Shepard Smith is CNBC’s daily news podcast providing deep, non-partisan coverage and perspective on the day’s most important stories. Available to listen by 8:30pm ET / 5:30pm PT daily beginning September 30: https://www.cnbc.com/2020/09/29/the-news-with-shepard-smith-podcast.html?__source=youtube%7Cshepsmith%7Cpodcast

Connect with CNBC News Online
Get the latest news: http://www.cnbc.com/
Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC
Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC
Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC
Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC

https://www.cnbc.com/select/best-credit-cards/

#CNBC
#CNBCTV

Products You May Like

Articles You May Like

Trump’s election win boosts Republican homebuyer optimism
How President-elect Donald Trump’s policies may affect investors in these 8 market sectors
Homebuyer demand for mortgages jumps 12%, after first interest rate drop in over 2 months
Brooklyn Navy Yard developer strikes $150M refinancing deal for Admirals Row
A look inside America’s first solar-powered community—and it’s hurricane-proof, too

Leave a Reply

Your email address will not be published. Required fields are marked *