Willie Sutton is reputed to have explained why he robbed banks, saying “Because that’s where the money is.” Of all the personal transactions to which most of us may be parties, perhaps none are “where the money is” as much as our real estate transactions. Real estate transactions also can be very public. The property listing usually appears on easily searchable websites that even note when the sale is under contract. Most information about the ownership and value of property is readily available online or in public records. Criminals seeking to grab some of the substantial funds involved in a real estate transaction have lots of details to connect themselves to the transaction and divert real estate settlement funds.
Local real estate settlement providers recently were shocked when a seller’s proceeds were diverted and at least temporarily lost as a result of someone gaining access to information about the sale. It seems that criminals somehow found out about a pending sale of some residential property; exactly how they knew about it is uncertain. When the buyer’s settlement agent initially attempted to wire the sale proceeds to the seller’s settlement agent, some sort of error message was received that indicated the wire transfer could not be completed.
Then the buyer’s settlement agent received what appeared to be substitute wiring instructions from the seller’s settlement agent and proceeded to wire the funds according to the substitute wiring instructions. The problem was that the substitute wiring instructions sent the sales proceeds to an account controlled by the criminals and the funds were lost. We understand those funds may have been replaced by an insurance company that hopes to recover the lost funds somehow.
You may want to inquire about your settlement agent’s or attorney’s office practices and procedures to help prevent your real estate proceeds from being put at risk by this type of fraud. You may want to inquire if your settlement agent or attorney is covered by insurance that would replace funds lost due to fraud. If you are the unfortunate victim of a scheme to divert funds from your real estate transaction, be sure to contact an attorney as quickly as possible. Attorneys with MartinWren, P.C., can assist victims of these crimes in Virginia.