The Latest In Malibu Real Estate Fraud Scams

With the advent and subsequent boom of online real estate outlets such as Zillow, Trulia, Redfin, Realtor.com, etc, has come a new wave of real estate related fraud schemes.  Ten years ago it would have been pretty rare to be contacted by a foreign buyer who has never seen the home they are contacting you about, is asking you to make an offer for them (often a full price offer), and  to please send them wiring instructions so they can wire their money into the country.  These days I get about 1 call or email like this  a month on average, and this month I have had 1 a week.

As a hard working Malibu Real Estate Agent, I cannot completely dismiss these emails automatically though without a little leg work, because with the economic booms of countries like China and Russia, properties are being bought in Malibu at a fairly high rate.

I sold a $1 million home to a very nice Chinese family last year, and am about to close escrow on another $1 million home this month to another lovely Chinese family.   The rest of the contacts however feel like some sort of scam, and this is The Latest in Malibu Real Estate Fraud.

Most disappear rather quickly after you start asking for information, but this one seemed legitimate, and took some digging before it started to show its true colors.Screen Shot 2015-02-25 at 12.22.08 PM

 

How this scheme works in short, is that an agent or attorney will be contracted by a foreign buyer who is using the name of a high profile business person.  In my most recent case it was the name of a Chinese Billionaire movie theater and gas mogul.  The email address had this name, they sent me what appeared to be a legit bank statement showing $3 million in funds, and said that they could only communicate by email for a week or two as they were overseeing their interest in an oil company and were on an offshore oil rig in China.  I don’t know why that part is important to the scam, but it is word for word in the article above, and it definitely has the feel of big money when you see it in an email.  I googled the name and it popped up all over the place.  Most authentic buyers are easy to identify via a Google search, so we were off to a great start.

 

Next I was asked to prepare a very strong offer on a property they had specified and send it to them.  I did so and the offer was signed and sent back along with what appeared to be proof of funds.  Thus far you have a very happy realtor.  Then things got weird.  I was then asked to provide wiring instructions to my real estate company so the funds could be transferred in full before the offer had been Accepted.  In Malibu, California we use escrow companies to handled funds like this, and only after an offer has been Accepted.  When this didn’t work I was next asked to help them find an attorney who they could send the funds to.

 

A few days later I found out another agent in my office was working with the same buyer and had made an offer on the EXACT same property for them.  When I asked the Buyer about this I was told they were buying multiple properties.  They did not seem to realize that buying the same property twice with two different Malibu Real Estate Agents might seem odd.

 

The buyer kept pressing for an account to wire funds to.   The way the scam works is that they send a fraudulent deposit, find a reason why they don’t want to buy the property in question, and then ask for the funds to be returned less fees and costs.  Since the funds were fraudulent in the first place, any funds returned to them will run at a negative to the firm, attorney, etc. who has received the fruadulent deposit, and then the buyer disappears once they have gotten the funds.

 

It would not seem possible for something like this to work in Malibu, as our real estate firms to not accept direct deposits from Buyers, and our escrow companies would be quick to catch on to something like this, but none the less as you can read in the article attached, the scam has worked successfully at least two times on the East Coast of America, and no doubt is probably going to work a few more times before it is more widely recognized.  They got away with large amounts of money each time.

 

So consider yourself warned, and make sure you do your homework on any offer that seems to be too good to be true.   As the old adage goes:  If it seems to good to be true, it probably is.

 

I specialize in homes in the Malibu area.  Please feel free to contact me if you have any questions about this blog post, or any real estate questions in the Malibu area.  Tony Mark, Sotheby’s International Realty, Malibu, CA  310-457-Mark(6275) Markmarkrealtors@mac.com

 

By Mark Real Estate | February 25th, 2015 | Uncategorized
Share: