06/30/2023
Current Real Estate Fraud Schemes:
The most common real estate frauds are rental scams, wire scams, title fraud, foreclosure fraud, and the use of Real Estate as an investment vehicle.
There’s also the magic box i.e., Elizabeth Holmes, founder of Theranos, being sold, perpetual motion machines, and cloud services that don’t really do anything. You can dress them up and make them look important but they don’t do anything or deliver on their promises. The details of the product are always hidden from you behind proprietary information and the investor cannot explain to you exactly what they are investing in.
There’s the rental bait and switch of properties were fake photos and descriptions are given with below market rates. It hooks you to call or view that property, but when you get there that property is, of course, already rented. In reality, the property never existed.
Then there’s the scam of occupying property with forged or fake documents.
Wire scams can be used by a person impersonating a realtor, a seller, an escrow company or title. Title is the most vulnerable.
Title fraud can happen when a person is able to transfer the legal ownership of property to themselves utilizing fraudulent methods. This typically requires an inside person in the title company. Insiders can be a threat.
Foreclosure fraud is a threat to the homeowner. It typically occurs with elderly victims or unsophisticated home owners. An insider at a bank will impersonate the bank with the bank’s email and phone number and will convince the victim to sign over the deed to their property. The victim thinks they are signing the property to the bank, but actuality, they are deeding the property to the insider.
Real estate as an investment vehicle is the biggest scam right now. In this situation, you would be guaranteed returns on a property investment and the returns are usually quoted above market rates. The perpetrator claims expertise in the market and once you invest, they will make timely payments on initial investment in the beginning to make it appear real, But in a few months they just disappear.
If you see anything, should you get involved? Yes, the reasons to get involved are, it’s the right thing to do, these crimes negatively impact the entire industry by creating lack of trust, and will deter new clients. Unfortunately, if we don’t get involved, then the Government will get more involved with more regulations and more fees, which we all don’t want. You can report fraud at the FBI National number, 1-800-Call-FBI or call your FBI field office and find at www.fbi.gov.
Source: FBI Special Agent
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