Open Forum

------------------------------
Cathy Clamp CTIP, NTP
Escrow Officer
Heart of Texas Title Co., LLC
Brady TX
+1 (325) 597-0796
------------------------------

I agree that when something feels off it probably is.  And even if it isn't completely "off", I err on the side of caution and will not handle the transaction. My "gut" has saved me multiple times throughout the years.  

------------------------------
Becky Taylor NTP
Owner
TitleWorks, Inc.
Fairfax VA
+1 7033592824313
------------------------------

Original Message:
Sent: 07-19-2023 10:10
From: Cathy Clamp
Subject: New Buyer Fraud - possible money laundering scheme

All,

I think we just avoided a potential buyer fraud, a new sort I haven't seen talked about recently and wanted to let you all know the details so you can watch out for it.

We received a contract a few weeks ago from a local realtor for four vacant town lots for cash. The property wasn't actually listed for sale, but the buyer had called on a different property shown on MLS and the realtor said that property was under contract, but another one might be listing soon. The buyer offered more than the asking price, sight unseen. The seller accepted the offer quickly. The contract was electronically signed.

 

Th buyer wanted a rush closing. We explained we probably couldn't complete the closing that quickly, but we would try. The title was clear, had no liens, the Seller was local and known to us, and there were no issues, so we started making preparations for closing.

 

The Buyer was from New York and seemingly in a rush. He called the realtor constantly during the next few days while we were working on the search, and the realtor in turn pressed us to help the buyer out. We forwarded our commitment by email several days before the planned closing, expecting that the buyer would be signing by mail. The only thing in the buyer's package that needed to be notarized was a marital status affidavit (Texas is a community property state, while New York is an equity state), and when we contacted the Buyer to explain that the package would have to be signed before a notary, he emailed us to say he was now in a different country and wanted us to send documents by email and he would sign them electronically. We emailed back to let him know that we would need to set up an appointment at an embassy or schedule a remote online notary for the affidavit. We asked which province he was in to see what would be available. The buyer agreed to take the document to an embassy, but wouldn't provide his current address nor which embassy he would be using. Keeping in mind recent Underwriting Bulletins about foreign embassy notary fraud, I told him we would have to schedule the appointment at the embassy through our office. He didn't respond.

 

Things then started to get weird. He also emailed that he had mailed us a cashier's check for the closing. Since we hadn't prepared the settlement statement yet, we explained that we didn't know the amount needed yet and we might need additional funds, which would have to come from a U.S. bank, but that we would look at the check when it arrived and let him know. We received the check the following week. The cashier's check was mailed in a plain white envelope with no return address and was in an amount more than two times the purchase price of the lots. It was drawn on a bank in Ohio two days after he supposedly was in the other country, and was mailed from a city in Georgia four days after he was out of the country. 

 

I called the bank, using a phone number from their website, rather than the one on the check, and asked to verify the check. The representative got the details and there was a strange tone to her voice that sounded suspicious when she asked me to hold to verify the check. I was on hold for almost 10 minutes when she returned to say that it was a valid check. She sounded surprised it was valid.

 

We wrote back to the buyer and said that there must have been a mistake, because the check was for far in excess of the sales price and we wouldn't be allowed to refund back that much money, nor hold the excess funds for potential future purchases in the area. I suggested it might be be better to wait until he returned to the U.S., so I could return this check and he could have it reissued for the correct amount. The buyer wrote back and just said, "I won't be back for some time. Thank you. I will let you know."

 

After discussions with our underwriter, we declined to close the transaction. After discussing with the realtor, who relayed the story to the seller, the seller cancelled the contract. The buyer later emailed to say the cashier's check had been cancelled and to destroy the check.

 

Was this money laundering or perhaps some other sort of fraud? Maybe, but we might not ever know. My advice is to be careful when things seem odd. The fact that the buyer didn't argue about us not accepting the check, didn't complain about having to go to a notary (or an embassy in a foreign country!) and was unwilling to give information about his location or when he would return to the U.S. makes it very likely.

 

The motto is – if something feels "off," it probably is. Keep your underwriter in the loop when you have a gut feeling, and let them make the call. 

------------------------------
Cathy Clamp CTIP, NTP
Escrow Officer
Heart of Texas Title Co., LLC
Brady TX
+1 (325) 597-0796
------------------------------

As I read your experience, I was shocked at how it was so similar to one that I had personally.  I had this happen with a car I was selling.  They saw it online and offered more money if I was willing to work with them because they were in another state.  They sent me a cashier's check and then got all weird about things. They told me they were out of the country and a friend would meet me to get the car for them. 

I took the cashier's check to my bank.  My bank called the bank the cashier's check was drawn on.  Everyone was surprised that the check was real.  While I was at the bank the buyer was rushing me to get this done, which I thought was odd given they were out of the country.  My bank said something just didn't seem right.  They accepted the check, but still placed a hold on the funds.  I was told that it can take cashier's checks 3 weeks to process completely through my bank and then the out of state bank it was drawn on. 

The buyer kept hounding me to know if I had deposited the check yet.  I told them I had deposited it, but I didn't let on that anyone thought it was suspicious.  I wanted to see how this played out with them.  They contacted me the next day and said their mom was in the hospital so they couldn't purchase the car.  They needed me to send the money back to them.  I told them I couldn't because the bank placed a 3 week hold on it. They suggested all kinds of things that I should to tell the bank to convince them to release those funds.  They were relentless.

Well, within that 3 weeks, the account that was used to purchase the cashier's check was closed for fraudulent activity.  The cashier's check was denied by the bank it was drawn on.  Had my bank not questioned it and placed that hold, I would have sent the money back to the buyer the day after I deposited the check.

------------------------------
Lora Leathco
Paralegal
Capital City Title Agency, Inc.
Columbia SC
+1 (803) 277-4322
------------------------------

Original Message:
Sent: 07-19-2023 10:10
From: Cathy Clamp
Subject: New Buyer Fraud - possible money laundering scheme

All,

I think we just avoided a potential buyer fraud, a new sort I haven't seen talked about recently and wanted to let you all know the details so you can watch out for it.

We received a contract a few weeks ago from a local realtor for four vacant town lots for cash. The property wasn't actually listed for sale, but the buyer had called on a different property shown on MLS and the realtor said that property was under contract, but another one might be listing soon. The buyer offered more than the asking price, sight unseen. The seller accepted the offer quickly. The contract was electronically signed.

 

Th buyer wanted a rush closing. We explained we probably couldn't complete the closing that quickly, but we would try. The title was clear, had no liens, the Seller was local and known to us, and there were no issues, so we started making preparations for closing.

 

The Buyer was from New York and seemingly in a rush. He called the realtor constantly during the next few days while we were working on the search, and the realtor in turn pressed us to help the buyer out. We forwarded our commitment by email several days before the planned closing, expecting that the buyer would be signing by mail. The only thing in the buyer's package that needed to be notarized was a marital status affidavit (Texas is a community property state, while New York is an equity state), and when we contacted the Buyer to explain that the package would have to be signed before a notary, he emailed us to say he was now in a different country and wanted us to send documents by email and he would sign them electronically. We emailed back to let him know that we would need to set up an appointment at an embassy or schedule a remote online notary for the affidavit. We asked which province he was in to see what would be available. The buyer agreed to take the document to an embassy, but wouldn't provide his current address nor which embassy he would be using. Keeping in mind recent Underwriting Bulletins about foreign embassy notary fraud, I told him we would have to schedule the appointment at the embassy through our office. He didn't respond.

 

Things then started to get weird. He also emailed that he had mailed us a cashier's check for the closing. Since we hadn't prepared the settlement statement yet, we explained that we didn't know the amount needed yet and we might need additional funds, which would have to come from a U.S. bank, but that we would look at the check when it arrived and let him know. We received the check the following week. The cashier's check was mailed in a plain white envelope with no return address and was in an amount more than two times the purchase price of the lots. It was drawn on a bank in Ohio two days after he supposedly was in the other country, and was mailed from a city in Georgia four days after he was out of the country. 

 

I called the bank, using a phone number from their website, rather than the one on the check, and asked to verify the check. The representative got the details and there was a strange tone to her voice that sounded suspicious when she asked me to hold to verify the check. I was on hold for almost 10 minutes when she returned to say that it was a valid check. She sounded surprised it was valid.

 

We wrote back to the buyer and said that there must have been a mistake, because the check was for far in excess of the sales price and we wouldn't be allowed to refund back that much money, nor hold the excess funds for potential future purchases in the area. I suggested it might be be better to wait until he returned to the U.S., so I could return this check and he could have it reissued for the correct amount. The buyer wrote back and just said, "I won't be back for some time. Thank you. I will let you know."

 

After discussions with our underwriter, we declined to close the transaction. After discussing with the realtor, who relayed the story to the seller, the seller cancelled the contract. The buyer later emailed to say the cashier's check had been cancelled and to destroy the check.

 

Was this money laundering or perhaps some other sort of fraud? Maybe, but we might not ever know. My advice is to be careful when things seem odd. The fact that the buyer didn't argue about us not accepting the check, didn't complain about having to go to a notary (or an embassy in a foreign country!) and was unwilling to give information about his location or when he would return to the U.S. makes it very likely.

 

The motto is – if something feels "off," it probably is. Keep your underwriter in the loop when you have a gut feeling, and let them make the call. 

------------------------------
Cathy Clamp CTIP, NTP
Escrow Officer
Heart of Texas Title Co., LLC
Brady TX
+1 (325) 597-0796
------------------------------

Original Message:
Sent: 7/20/2023 9:46:00 AM
From: Lora Leathco
Subject: RE: New Buyer Fraud - possible money laundering scheme

As I read your experience, I was shocked at how it was so similar to one that I had personally.  I had this happen with a car I was selling.  They saw it online and offered more money if I was willing to work with them because they were in another state.  They sent me a cashier's check and then got all weird about things. They told me they were out of the country and a friend would meet me to get the car for them. 

I took the cashier's check to my bank.  My bank called the bank the cashier's check was drawn on.  Everyone was surprised that the check was real.  While I was at the bank the buyer was rushing me to get this done, which I thought was odd given they were out of the country.  My bank said something just didn't seem right.  They accepted the check, but still placed a hold on the funds.  I was told that it can take cashier's checks 3 weeks to process completely through my bank and then the out of state bank it was drawn on. 

The buyer kept hounding me to know if I had deposited the check yet.  I told them I had deposited it, but I didn't let on that anyone thought it was suspicious.  I wanted to see how this played out with them.  They contacted me the next day and said their mom was in the hospital so they couldn't purchase the car.  They needed me to send the money back to them.  I told them I couldn't because the bank placed a 3 week hold on it. They suggested all kinds of things that I should to tell the bank to convince them to release those funds.  They were relentless.

Well, within that 3 weeks, the account that was used to purchase the cashier's check was closed for fraudulent activity.  The cashier's check was denied by the bank it was drawn on.  Had my bank not questioned it and placed that hold, I would have sent the money back to the buyer the day after I deposited the check.

------------------------------
Lora Leathco
Paralegal
Capital City Title Agency, Inc.
Columbia SC
+1 (803) 277-4322
------------------------------

Original Message:
Sent: 07-19-2023 10:10
From: Cathy Clamp
Subject: New Buyer Fraud - possible money laundering scheme

All,

I think we just avoided a potential buyer fraud, a new sort I haven't seen talked about recently and wanted to let you all know the details so you can watch out for it.

We received a contract a few weeks ago from a local realtor for four vacant town lots for cash. The property wasn't actually listed for sale, but the buyer had called on a different property shown on MLS and the realtor said that property was under contract, but another one might be listing soon. The buyer offered more than the asking price, sight unseen. The seller accepted the offer quickly. The contract was electronically signed.

 

Th buyer wanted a rush closing. We explained we probably couldn't complete the closing that quickly, but we would try. The title was clear, had no liens, the Seller was local and known to us, and there were no issues, so we started making preparations for closing.

 

The Buyer was from New York and seemingly in a rush. He called the realtor constantly during the next few days while we were working on the search, and the realtor in turn pressed us to help the buyer out. We forwarded our commitment by email several days before the planned closing, expecting that the buyer would be signing by mail. The only thing in the buyer's package that needed to be notarized was a marital status affidavit (Texas is a community property state, while New York is an equity state), and when we contacted the Buyer to explain that the package would have to be signed before a notary, he emailed us to say he was now in a different country and wanted us to send documents by email and he would sign them electronically. We emailed back to let him know that we would need to set up an appointment at an embassy or schedule a remote online notary for the affidavit. We asked which province he was in to see what would be available. The buyer agreed to take the document to an embassy, but wouldn't provide his current address nor which embassy he would be using. Keeping in mind recent Underwriting Bulletins about foreign embassy notary fraud, I told him we would have to schedule the appointment at the embassy through our office. He didn't respond.

 

Things then started to get weird. He also emailed that he had mailed us a cashier's check for the closing. Since we hadn't prepared the settlement statement yet, we explained that we didn't know the amount needed yet and we might need additional funds, which would have to come from a U.S. bank, but that we would look at the check when it arrived and let him know. We received the check the following week. The cashier's check was mailed in a plain white envelope with no return address and was in an amount more than two times the purchase price of the lots. It was drawn on a bank in Ohio two days after he supposedly was in the other country, and was mailed from a city in Georgia four days after he was out of the country. 

 

I called the bank, using a phone number from their website, rather than the one on the check, and asked to verify the check. The representative got the details and there was a strange tone to her voice that sounded suspicious when she asked me to hold to verify the check. I was on hold for almost 10 minutes when she returned to say that it was a valid check. She sounded surprised it was valid.

 

We wrote back to the buyer and said that there must have been a mistake, because the check was for far in excess of the sales price and we wouldn't be allowed to refund back that much money, nor hold the excess funds for potential future purchases in the area. I suggested it might be be better to wait until he returned to the U.S., so I could return this check and he could have it reissued for the correct amount. The buyer wrote back and just said, "I won't be back for some time. Thank you. I will let you know."

 

After discussions with our underwriter, we declined to close the transaction. After discussing with the realtor, who relayed the story to the seller, the seller cancelled the contract. The buyer later emailed to say the cashier's check had been cancelled and to destroy the check.

 

Was this money laundering or perhaps some other sort of fraud? Maybe, but we might not ever know. My advice is to be careful when things seem odd. The fact that the buyer didn't argue about us not accepting the check, didn't complain about having to go to a notary (or an embassy in a foreign country!) and was unwilling to give information about his location or when he would return to the U.S. makes it very likely.

 

The motto is – if something feels "off," it probably is. Keep your underwriter in the loop when you have a gut feeling, and let them make the call. 

------------------------------
Cathy Clamp CTIP, NTP
Escrow Officer
Heart of Texas Title Co., LLC
Brady TX
+1 (325) 597-0796
------------------------------

Variation on vacant land scheme.  Just what we need.
------------------------------

Original Message:
Sent: 07-19-2023 10:10
From: Cathy Clamp
Subject: New Buyer Fraud - possible money laundering scheme

All,

I think we just avoided a potential buyer fraud, a new sort I haven't seen talked about recently and wanted to let you all know the details so you can watch out for it.

We received a contract a few weeks ago from a local realtor for four vacant town lots for cash. The property wasn't actually listed for sale, but the buyer had called on a different property shown on MLS and the realtor said that property was under contract, but another one might be listing soon. The buyer offered more than the asking price, sight unseen. The seller accepted the offer quickly. The contract was electronically signed.

 

Th buyer wanted a rush closing. We explained we probably couldn't complete the closing that quickly, but we would try. The title was clear, had no liens, the Seller was local and known to us, and there were no issues, so we started making preparations for closing.

 

The Buyer was from New York and seemingly in a rush. He called the realtor constantly during the next few days while we were working on the search, and the realtor in turn pressed us to help the buyer out. We forwarded our commitment by email several days before the planned closing, expecting that the buyer would be signing by mail. The only thing in the buyer's package that needed to be notarized was a marital status affidavit (Texas is a community property state, while New York is an equity state), and when we contacted the Buyer to explain that the package would have to be signed before a notary, he emailed us to say he was now in a different country and wanted us to send documents by email and he would sign them electronically. We emailed back to let him know that we would need to set up an appointment at an embassy or schedule a remote online notary for the affidavit. We asked which province he was in to see what would be available. The buyer agreed to take the document to an embassy, but wouldn't provide his current address nor which embassy he would be using. Keeping in mind recent Underwriting Bulletins about foreign embassy notary fraud, I told him we would have to schedule the appointment at the embassy through our office. He didn't respond.

 

Things then started to get weird. He also emailed that he had mailed us a cashier's check for the closing. Since we hadn't prepared the settlement statement yet, we explained that we didn't know the amount needed yet and we might need additional funds, which would have to come from a U.S. bank, but that we would look at the check when it arrived and let him know. We received the check the following week. The cashier's check was mailed in a plain white envelope with no return address and was in an amount more than two times the purchase price of the lots. It was drawn on a bank in Ohio two days after he supposedly was in the other country, and was mailed from a city in Georgia four days after he was out of the country. 

 

I called the bank, using a phone number from their website, rather than the one on the check, and asked to verify the check. The representative got the details and there was a strange tone to her voice that sounded suspicious when she asked me to hold to verify the check. I was on hold for almost 10 minutes when she returned to say that it was a valid check. She sounded surprised it was valid.

 

We wrote back to the buyer and said that there must have been a mistake, because the check was for far in excess of the sales price and we wouldn't be allowed to refund back that much money, nor hold the excess funds for potential future purchases in the area. I suggested it might be be better to wait until he returned to the U.S., so I could return this check and he could have it reissued for the correct amount. The buyer wrote back and just said, "I won't be back for some time. Thank you. I will let you know."

 

After discussions with our underwriter, we declined to close the transaction. After discussing with the realtor, who relayed the story to the seller, the seller cancelled the contract. The buyer later emailed to say the cashier's check had been cancelled and to destroy the check.

 

Was this money laundering or perhaps some other sort of fraud? Maybe, but we might not ever know. My advice is to be careful when things seem odd. The fact that the buyer didn't argue about us not accepting the check, didn't complain about having to go to a notary (or an embassy in a foreign country!) and was unwilling to give information about his location or when he would return to the U.S. makes it very likely.

 

The motto is – if something feels "off," it probably is. Keep your underwriter in the loop when you have a gut feeling, and let them make the call. 

------------------------------
Cathy Clamp CTIP, NTP
Escrow Officer
Heart of Texas Title Co., LLC
Brady TX
+1 (325) 597-0796
------------------------------

People are getting better at scams, we have had cases on supposed foreign sellers, selling properties that they see are out for sale with foreign names (had 3 cases so far), and when we request to see the passport to obtain an ITIN to recover the FIRPTA withholding they say "we do not care to recover that money", which is shocking due to the recovery is always in the $50,000 usd. range if not way more.... but they falsify passports or just find someone with the same name.
Glad you were able to caught it, but the time one spend clearing all the mystery  .... is infuriating 

------------------------------
Mary Enzi
Tax Solutions – FIRPTA Consulting
Barker TX
+1 (281) 578-1040
------------------------------

Original Message:
Sent: 07-19-2023 10:10
From: Cathy Clamp
Subject: New Buyer Fraud - possible money laundering scheme

All,

I think we just avoided a potential buyer fraud, a new sort I haven't seen talked about recently and wanted to let you all know the details so you can watch out for it.

We received a contract a few weeks ago from a local realtor for four vacant town lots for cash. The property wasn't actually listed for sale, but the buyer had called on a different property shown on MLS and the realtor said that property was under contract, but another one might be listing soon. The buyer offered more than the asking price, sight unseen. The seller accepted the offer quickly. The contract was electronically signed.

 

Th buyer wanted a rush closing. We explained we probably couldn't complete the closing that quickly, but we would try. The title was clear, had no liens, the Seller was local and known to us, and there were no issues, so we started making preparations for closing.

 

The Buyer was from New York and seemingly in a rush. He called the realtor constantly during the next few days while we were working on the search, and the realtor in turn pressed us to help the buyer out. We forwarded our commitment by email several days before the planned closing, expecting that the buyer would be signing by mail. The only thing in the buyer's package that needed to be notarized was a marital status affidavit (Texas is a community property state, while New York is an equity state), and when we contacted the Buyer to explain that the package would have to be signed before a notary, he emailed us to say he was now in a different country and wanted us to send documents by email and he would sign them electronically. We emailed back to let him know that we would need to set up an appointment at an embassy or schedule a remote online notary for the affidavit. We asked which province he was in to see what would be available. The buyer agreed to take the document to an embassy, but wouldn't provide his current address nor which embassy he would be using. Keeping in mind recent Underwriting Bulletins about foreign embassy notary fraud, I told him we would have to schedule the appointment at the embassy through our office. He didn't respond.

 

Things then started to get weird. He also emailed that he had mailed us a cashier's check for the closing. Since we hadn't prepared the settlement statement yet, we explained that we didn't know the amount needed yet and we might need additional funds, which would have to come from a U.S. bank, but that we would look at the check when it arrived and let him know. We received the check the following week. The cashier's check was mailed in a plain white envelope with no return address and was in an amount more than two times the purchase price of the lots. It was drawn on a bank in Ohio two days after he supposedly was in the other country, and was mailed from a city in Georgia four days after he was out of the country. 

 

I called the bank, using a phone number from their website, rather than the one on the check, and asked to verify the check. The representative got the details and there was a strange tone to her voice that sounded suspicious when she asked me to hold to verify the check. I was on hold for almost 10 minutes when she returned to say that it was a valid check. She sounded surprised it was valid.

 

We wrote back to the buyer and said that there must have been a mistake, because the check was for far in excess of the sales price and we wouldn't be allowed to refund back that much money, nor hold the excess funds for potential future purchases in the area. I suggested it might be be better to wait until he returned to the U.S., so I could return this check and he could have it reissued for the correct amount. The buyer wrote back and just said, "I won't be back for some time. Thank you. I will let you know."

 

After discussions with our underwriter, we declined to close the transaction. After discussing with the realtor, who relayed the story to the seller, the seller cancelled the contract. The buyer later emailed to say the cashier's check had been cancelled and to destroy the check.

 

Was this money laundering or perhaps some other sort of fraud? Maybe, but we might not ever know. My advice is to be careful when things seem odd. The fact that the buyer didn't argue about us not accepting the check, didn't complain about having to go to a notary (or an embassy in a foreign country!) and was unwilling to give information about his location or when he would return to the U.S. makes it very likely.

 

The motto is – if something feels "off," it probably is. Keep your underwriter in the loop when you have a gut feeling, and let them make the call. 

------------------------------
Cathy Clamp CTIP, NTP
Escrow Officer
Heart of Texas Title Co., LLC
Brady TX
+1 (325) 597-0796
------------------------------

This sounds familiar. What we had found a few years ago was that we had received a personal check from a Canadian buyer, in the amount of $500,000. It was not a cashier's check. However, we would have been at least 60 days out from closing. The buyer was working with a realtor who refers business the buyer wanted to prove he was a legitimate buyer, so he sent us the funds to place on a property forthcoming within a couple of days. The realtor had identified a $2,000,000 property for him, but at the time no offer had been made. We have a firm rule about personal checks, in that they have to wait 10 working days for a local check to clear and 30 days for a Canadian check to clear. After 30 days had passed and no property had gone under contract, we received an email from the buyer with disbursement instructions asking us to release his funds back to him. They wanted $200,000 of it released back to him, $100,000 to be sent to a Chinese furniture maker and for us to keep $200,000 to place on an upcoming contract.  We had not received any notifications from our bank after 30 days had passed, that the check had bounced so it would seem that the check was indeed good. Our manager became suspicious and due to the amounts involved; she reached out to the RBC bank to confirm that the check was good before doing anything. Of course, we would have never complied with the request to split the check up, under any circumstances. If it were determined to be a real check, we would only release it to the owner of the account it came from. Turns out after speaking with RBC Bank the check was fraudulent. The reason we did not receive any notification from our bank that it bounced back was because the FBI intercepted the check in New York while it was on its way to the bank. Odd that the FBI would not notify us as the payee. Also, we found it odd that my bank wouldn't follow up after some time had passed, asking for the funds from RBC Bank. So, the moral is, whenever you get more funds than needed, it's a red flag. If the buyer comes back to ask for its return, make sure those funds have been collected. Apparently 30 days is not long enough to confirm "good funds", so now we don't accept foreign checks of any kind. Wires only! Thankfully my manager did not assume that because the company policy had elapsed, and after 30 days she would assume the check was good, she instead decided to further vet the funds. She saved this company $500,000. Here in SWFL fraud is rampant due to the large amount of high-priced vacant lots in Florida. It's a daily battle. Over 30 attempts of fraud within the last 6 months in this operation. I changed the culture of my company 8 years ago by making consumer funds protection as our primary function and clear title as a secondary priority. What kind of a world do we live in? (Thats a rhetorical question) We focus so much on seller ID fraud, sometimes we don't think about the buyers and/or borrowers. Keep up the good fight my fellow peers.

------------------------------
Pamalla Lanaux
Agency Relationship Manager
Doma Title Insurance, Inc.
Miami FL
------------------------------

Original Message:
Sent: 07-19-2023 10:10
From: Cathy Clamp
Subject: New Buyer Fraud - possible money laundering scheme

All,

I think we just avoided a potential buyer fraud, a new sort I haven't seen talked about recently and wanted to let you all know the details so you can watch out for it.

We received a contract a few weeks ago from a local realtor for four vacant town lots for cash. The property wasn't actually listed for sale, but the buyer had called on a different property shown on MLS and the realtor said that property was under contract, but another one might be listing soon. The buyer offered more than the asking price, sight unseen. The seller accepted the offer quickly. The contract was electronically signed.

 

Th buyer wanted a rush closing. We explained we probably couldn't complete the closing that quickly, but we would try. The title was clear, had no liens, the Seller was local and known to us, and there were no issues, so we started making preparations for closing.

 

The Buyer was from New York and seemingly in a rush. He called the realtor constantly during the next few days while we were working on the search, and the realtor in turn pressed us to help the buyer out. We forwarded our commitment by email several days before the planned closing, expecting that the buyer would be signing by mail. The only thing in the buyer's package that needed to be notarized was a marital status affidavit (Texas is a community property state, while New York is an equity state), and when we contacted the Buyer to explain that the package would have to be signed before a notary, he emailed us to say he was now in a different country and wanted us to send documents by email and he would sign them electronically. We emailed back to let him know that we would need to set up an appointment at an embassy or schedule a remote online notary for the affidavit. We asked which province he was in to see what would be available. The buyer agreed to take the document to an embassy, but wouldn't provide his current address nor which embassy he would be using. Keeping in mind recent Underwriting Bulletins about foreign embassy notary fraud, I told him we would have to schedule the appointment at the embassy through our office. He didn't respond.

 

Things then started to get weird. He also emailed that he had mailed us a cashier's check for the closing. Since we hadn't prepared the settlement statement yet, we explained that we didn't know the amount needed yet and we might need additional funds, which would have to come from a U.S. bank, but that we would look at the check when it arrived and let him know. We received the check the following week. The cashier's check was mailed in a plain white envelope with no return address and was in an amount more than two times the purchase price of the lots. It was drawn on a bank in Ohio two days after he supposedly was in the other country, and was mailed from a city in Georgia four days after he was out of the country. 

 

I called the bank, using a phone number from their website, rather than the one on the check, and asked to verify the check. The representative got the details and there was a strange tone to her voice that sounded suspicious when she asked me to hold to verify the check. I was on hold for almost 10 minutes when she returned to say that it was a valid check. She sounded surprised it was valid.

 

We wrote back to the buyer and said that there must have been a mistake, because the check was for far in excess of the sales price and we wouldn't be allowed to refund back that much money, nor hold the excess funds for potential future purchases in the area. I suggested it might be be better to wait until he returned to the U.S., so I could return this check and he could have it reissued for the correct amount. The buyer wrote back and just said, "I won't be back for some time. Thank you. I will let you know."

 

After discussions with our underwriter, we declined to close the transaction. After discussing with the realtor, who relayed the story to the seller, the seller cancelled the contract. The buyer later emailed to say the cashier's check had been cancelled and to destroy the check.

 

Was this money laundering or perhaps some other sort of fraud? Maybe, but we might not ever know. My advice is to be careful when things seem odd. The fact that the buyer didn't argue about us not accepting the check, didn't complain about having to go to a notary (or an embassy in a foreign country!) and was unwilling to give information about his location or when he would return to the U.S. makes it very likely.

 

The motto is – if something feels "off," it probably is. Keep your underwriter in the loop when you have a gut feeling, and let them make the call. 

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Cathy Clamp CTIP, NTP
Escrow Officer
Heart of Texas Title Co., LLC
Brady TX
+1 (325) 597-0796
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