International Real Estate Wire Transfer Scheme: 74 Arrested

74 people were recently arrested in the United States and overseas for alleged wire transfer fraud. According to the U.S. Department of Justice, a “coordinated law enforcement effort” resulted in the arrests and the seizure of about $2.4 million and recovery of about $14 million in fraudulent wire transfers.

When most people think of wire fraud, they think of the victims. Often, these individuals are elderly and can be convinced to make wire transfers to bank accounts held by the criminals. In this case, however, some victims believed they were paying closing costs to the bank account of a real estate agent or closing attorney. The National Association of Realtors (NAR) and the Federal Trade Commission (FTC) warned real estate professionals about this nearly two years ago, when scammers first started posing as real estate agents, investors, and service providers like title companies.

How the Scams Worked

In many of these fraudulent scenarios, hackers pretended to be real estate professionals who actually did exist and were working with the targets of the scam. The real estate professionals themselves were never involved in the scam at all, but the con artists assumed their identities and used the real email accounts to change directions for closings. For example, they might have emailed a long-distance buyer that the name of the bank where they should wire the money had changed or the account number had been wrong before. Because the other party knew and trusted the real estate professional, they simply followed directions and sent the money to the new account, where it disappeared without a trace and without recourse.

Who Was Arrested

The multi-month investigation culminated in the arrests of 42 people in the United States, 29 in Nigeria, and one each in Canada, Mauritius, and Poland. Among those arrested were a Fort Lauderdale man accused of hacking a real estate attorney’s email in order to send misleading information to clients wiring money. In once instance, a victim sent $500,000 intended as a payment for real estate to one of the scammer’s accounts.