REAL ESTATE INVESTING – What is Wire Fraud? How to avoid Wire Fraud when Investing in Real Estate

REAL ESTATE INVESTING – What is Wire Fraud?  How to avoid Wire Fraud when Investing in Real Estate

July 18, 2019

Wire Fraud includes any form of financial fraud involving the use of telecommunications or information technology.  Currently one of the biggest threats to real estate investing is real estate wire fraud. The way real estate wire fraud is most commonly carried out, is that a person involved in a real estate transaction, such as a real estate attorney or realtor, has his or her email account compromised by malicious software sent by a fraudster whom can then monitor the realtor’s emails looking for upcoming transactions. Once the fraudster identifies an upcoming closing date, a legitimate-looking email message is sent to the real estate investor advising that there has been a change of plans.  Specifically the email advises that the real estate investor must wire the down payment to a bank account belonging to the seller, while the bank account truly belongs to the fraudster and is typically overseas. Once the funds are transferred to the fraudster’s offshore account, it is out of the reach of U.S. law enforcement.

How to avoid Wire Fraud when Investing in Real Estate – Steps real estate investors should take to protect against real estate wire fraud:

• Real estate investor should be Observant:Real estate investors seeking to make a real estate investment should act with heightened caution and act accordingly to verify any suspicious correspondence associated with their investment purchase or sale. In this instance the real estate should be cautious to confirm that the email is not part of a greater real estate wire fraud scheme.
• Real estate investor should Contact their Advisor’s directly: Real estate investors seeking to make a real estate investment should follow up emails with a personal and direct verification. Direct verification is especially necessary if the email involves e-signing a document, logging into a new website, transacting money or supplying any kind of financial information. In this instance the real estate investor should follow up on directly with their advisors to confirm that the email is not part of a greater real estate wire fraud scheme.
• Real estate investor should Pause prior to responding or reacting toemail Requests:Real estate investors seeking to make a real estate investment and receiving emails asking to take some type of action, purporting to be from the title company, attorneys, realtors, bankers or others involved in a transaction; require heightened suspicion.  In this instance the real estate investor should follow up on directly with their advisors to confirm that the email is not part of a greater real estate wire fraud scheme.

If you or someone you know, is considering a real estate investment opportunity or has fallen victim to real estate wire fraud we invite you to call us today at 619-432-5145 for a free consultation with one of our experiencedWire Fraud Attorneys and Investment Lawyers.