Pennsylvania Escrow Theft Scam Warning

Rachel Dollar —  July 23, 2015 — Leave a comment

The Monroe County, Pennsylvania Office of the District Attorney is warning citizens of a scam targeting homebuyers with pending purchases in Monroe County, Pennsylvania.

In this scam, dubbed the “Man in the Email” scam by the FBI, unwitting buyers are duped into wiring the closing costs and down payment to an out-of-state bank account when they receive closing instructions from their realtor or title company.  In reality, the email was sent by someone who had hacked into the email account of the realtor or title agent, and the instructions are bogus – directing the homebuyer to wire the funds to a bank account under the control of the scammers.

Although this press release was local to Pennsylvania, this scam is happening across the country and being directed and all parties that wire funds into escrow accounts – homebuyers and lenders.

These hackers start by identify the email accounts of real estate agents, brokers, or title company agents and then gain unauthorized access into those accounts.  Once they have access to those accounts, they can view all of the sent and received emails, including those referencing pending real estate deals.  The hackers pull out details specific to the transaction, such as the buyer’s and seller’s names, the title company involved, and the property information, and then use that information to pose as the realtor or title agent. The scammers then send an email to the buyer, or title company holding the funds, instructing them to wire the funds to an out-of-state bank account.

What makes this scam so hard for buyers to recognize is that the scammers send this email from the real email account of the realtor or title company so buyers have no reason to doubt its legitimacy. The bank account that the funds are wired to is a real bank account that has been compromised by the scammers.  The owner of that account may have no idea that their account is being used to “middle man” this scam.

As soon as the funds arrive in that account, they are transferred to another bank account under control of the scammers, which is often outside the U.S.  The funds are then quickly withdrawn. The buyer doesn’t learn of the fraud until they speak with their agent and discover that the email containing the wire transfer instructions wasn’t legitimate.  And by then, it’s usually too late.

Within the past several weeks, there have been two confirmed instances of buyers in Monroe County, Pennsylvania being targeted in this scam – one in Stroudsburg and one in Mount Pocono.  In one instance, investigators have confirmed that the fraudulent communications originated in South Africa. In order to avoid falling prey to this type of scam, homebuyers should personally verify any wire transfer instructions sent to them by their realtor or title agent.

If you receive an email containing wire transfer instructions, be sure to call your realtor or title agent on a known telephone number to verify that the instructions are legitimate.  Avoid calling the telephone number provided in the scam email, as that may be a fraudulent telephone number used by the scammers.  With today’s technology, it’s possible for anyone in the world to sign up for a service that offers voice communications over the Internet and have a telephone number with any area code of their choosing.  Callers to that number would have no idea that they weren’t calling a traditional telephone service.

If you do find yourself a victim of this scam, immediately contact your bank, as well as the bank that the funds were wired to, and report the fraud.  They may be able to freeze the funds before they are transferred out of the country or withdrawn.  Then report the fraud to your local police department.

Rachel Dollar

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