(WSVN) - It’s great to buy or sell a home. But for some South Floridians, that’s turning into a horror story because their money for the home is disappearing in a shrewd scam. How does it work? 7’s Patrick Fraser has our special report Home Wreckers.
Richard Zimmelman’s dream turned into a disaster…
Richard Zimmelman: “My heart dropped.”
A few months earlier, the same thing happened to Heidi Payne.
Heidi Payne, scam victim: “My buyer tells me the money was wired. I said ‘No, it’s not showing in my bank.'”
Heidi was waiting for $114,000 to be wired to her bank account for her house that she sold. Richard thought he had wired $86,000 to a title company to pay for a new condo. In both cases, a scammer diverted the money to a different account.
Richard Zimmelman: “The only thing I know at this point is I’m out the $86,000, and all I did was follow the instructions from this title agency I received.”
How did the scammers do it? Pretty simple.
Duane Baum, Attorney: “It’s very clever, it’s clever.”
Duane Baum is an attorney and affiliated with a title insurance agency. He agreed to work with us to show how crooks steal from South Floridians using title companies.
Duane Baum: “They’re using title companies because title companies handle large sums of money for real estate transactions.”
Watch how simple it is…
We went online to open a bank account. No ID was needed.
Then we went online to the state’s corporate registry to create a business name. Instead of Duane’s title agency called South Florida Title Associates, we called it South Florida Title and Associates. Again, no proof needed to show we were legit…
Duane Baum: “It’s scary. It’s scary and that is an understatement. You did everything online and there is no verification to verify who you were.”
Then the crook hacks into the legitimate title agency’s e-mail account. For a scammer, that’s easy. The crook then monitors the e-mails between the title agents or attorney and the customers. When the money is about to be exchanged, the scammer sends an e-mail that appears to be from the title company.
Duane Baum: “They’ll send an e-mail to a party and say, ‘We’ve changed our banking information. Cancel the first wiring instructions, send it to these new wiring instructions.”
Duane has set up safeguards to block hackers from doing this to him, but many agencies have not. The FBI reports that crimes like this have tripled in the past year, costing honest people $1 billion, and the scammers are raking it in.
Duane Baum: “They actually got scammed. Now we’re talking about, maybe like $2 million at least.”
The problem is so serious, the Florida Bar just put out a front page story warning attorneys that a sophisticated scam targets lawyers and wire transfers.
Milton Reed, North Miami Police: “Yeah that’s troubling.”
North Miami Police are investigating Richard’s rip-off. But unfortunately, the scammers took the $86,000 out of the account quickly.
Milton Reed: “In a situation like this, it becomes pretty much a dead end because once that money is withdrawn, outside of the information bank can offer us in terms of video and pictures and such, we wouldn’t have anything.”
The solution: if you find out the wire transfer of the money didn’t go through quickly, contact the bank to try to get the money before the crook moves it out. Better yet, pay in person with a cashier’s check, and if you have to wire the money, watch out.
Duane Baum: “And then we let them know, if you receive anything, you know, e-mail or text or anything that says we’ve changed our information. That’s a red flag for you. Call us right away.”
In Heidi’s case she got her money back in a confidential settlement…
Heidi Payne: “I can’t really go into detail.”
In Richard’s case the retired Air Force veteran still doesn’t have his $86,000 back. The crook got away with it.
Richard Zimmelman: “I’m extremely hurt, angry. It changes your life.”
One day, he thought he was moving into a dream condo. The next day, he was devastated by a scamming home wrecker.
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