Homebuyers beware: Couple warns of wire fraud scheme that wiped out their savings

COBB COUNTY, Ga. — A lifetime of savings, gone in seconds. It is a fast growing scheme targeting home buyers in metro Atlanta.

A local couple lost over $20,000 to the little-known internet crime.

Homebuyers who mistakenly wire closing funds to the wrong bank account have little recourse when it comes to getting their money back a Channel 2 investigation finds.

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Ben Lerner and his wife are passionate about deep sea fishing. In late 2020, the couple began the process of buying a condo in rural Florida, near the Gulf Coast.

“It was kind of like our dream thing,” Lerner said.

Lerner told Channel 2 investigative reporter Justin Gray the closing date was set for October.

“We received a communication from what we thought was our attorney, and it was the week of the closing. So, we were expecting a communication about cash to close,” Lerner said.

His wife wired the money to account specified in the email, but it was returned. He told Channel 2 they received as second email requesting a wire transfer and this time it worked.

“We got a confirmation from what we thought was our lawyer, and we thought everything was good.”

Three days later, while they were driving to their new condo, they got another request from their attorney to wire the funds.

“So, we sent her an email back and said, we did wire the funds on Monday, per your request. And then we got an email that says, ‘I’m going to call you.’”

The attorney informed them a criminal had spoofed the email of their firm and sent a bogus request for the money. Every penny of the $24,000 was gone.

“There’s no protection. And there’s also no real avenue to communicate with the banks, the banks will not talk to you. And that’s really been the most frustrating part about the whole process,” Lerner said.

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According to the most recent Consumer Financial Protection Bureau statistics, mortgage closing scams rose more than 1,000% between 2015 and 2017. The crime brought in nearly one billion dollars in 2017 alone.

Despite that startling amount, Lerner told Channel 2 he’d never heard of it before. “It hit us like a train.”

The closing attorney for Lerner told Gray they use encrypted communication and send every client an email alert about this type of crime.

Attorney Rick Alembik specializes in real estate litigation. He told Gray many closing attorneys have insurance that requires them to send those emails.

“Nobody actually reads those email warnings in real life,” Alembik said a better safeguard would be for firms to get a written acknowledgment from the clients that they are aware of possible fraud.

Denise Hindle knows a thing or two about online security threats. Her company handles secure Medicare and social security data.

The email she received while closing on a home she was buying for an employee looked legitimate to her.

“We got an email saying, ‘We’re ready to close. Let’s speed things up. Here’s all your closing documents.’”

But she said the message was from a criminal posing as the attorney.

“We had wired a quarter-million dollars.”

It was then she learned it isn’t the bank or Burgess Title LLC, the closing attorney, who were responsible for the lost funds. It was her.

Hindle was able to recover some of the money lost thanks to a quick-thinking Western Union employee who spotted the potential fraud in Texas.

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Alembik said many closing attorneys have insurance to cover this type of fraud.

“They have specific instructions from their insurers on how what procedures they need to perform,” he said.

Hindle said she still has questions for her closing attorneys.

“There were not protected emails and there were no encryptions. There were no secure channels for any of this,” she said.

Gray reached out to Burgess Title in January and is still waiting for answers about Hindle’s case.

Alembik said there are steps homebuyers must take to protect their finances.

“Two things you do, is you call before you wire and before you call you independently verify the phone number that you’re calling to make sure it’s the right place,” he said.

The CFPB has a mortgage closing checklist on its site.

What should you do if the COVID-19 pandemic has you behind on your mortgage? A home foreclosure moratorium is close to ending as the pandemic continues