Real estate wire fraud scams cost victims tens of thousands in house down payment money

Samantha Chatman Image
Tuesday, March 22, 2022
Down payment wire fraud scams cost victims tens of thousands
House down payment wire instructions fraud scams cost victims tens of thousands of dollars as they prepare to buy their first home.

CHICAGO (WLS) -- Imagine saving for years for a new home and then having your down payment disappear in the blink of an eye.

Real estate wire fraud is now among the fastest growing scams in the U.S. It has cost its victims tens of thousands of dollars, and a lot of therapy.

Jenna Carlson saved up for years to become a homeowner. In 2021, her dream was about to come true.

"I was just so excited to finally buy my own home," she said. "And I had just got a dog, too. So, kind of starting a family, just the two of us in a place. So it was really exciting."

Carlson was prepared to put down 20% for the home's down payment, totaling $42,000. She said she spoke with her real estate agent's paralegal, who said she'd send her the wire instructions the following week.

But that same day, Carlson got an email from who she thought was the same paralegal. That note said the money needed to be wired sooner than expected. She said the email included the correct down payment amount, address of the new home and her mortgage commitment document.

"There was actually 16 emails that went back and forth between me and this person because I was asking clarifying questions," she recalled.

Carlson said the so-called paralegal sent her the wire instructions and she went to the bank to send the $42,000.

"And then Monday, I got a call on my way home from work from the real estate attorney's paralegal asking me about the down payment of the home. And I told her I sent it because the email she sent, and she said what email, I didn't send any email," Carlson said.

After taking a closer look at the email, Carlson realized the sender's address was similar to the paralegal's, but had two extra letters added to it.

"It was fraud and I'd been scammed," she said. "And that the entire down payment on my house, everything I'd saved was gone in the blink of an eye. And I couldn't do anything about it."

Carlson said she felt a lot of guilt, and has done a lot of therapy to cope with the loss.

"Real estate fraud is one of the fastest growing cyber scams across the country," said FBI Special Agent Siobhan Johnson. "When you look at 2018 to 2020, we saw approximately a 42% increase in the percentage of real estate crimes that we're seeing."

In many cases, a scammer will use information they've hacked to trick you into thinking they're a title company or real estate agency. They email address they use may be similar to the one you've been communicating with for weeks. They send wire instructions with your personal information, then you wire the money and then the next day the person you thought you sent it to never receives it.

"I would expect these numbers to skyrocket as soon as people start buying real estate," Johnson said. "March, April, May, June. The markets are red hot and the scams are hotter."

Carlson said Chase Bank was able to put a stop on $9,000 of the money she wired, but nearly a year later the recovered money still hasn't hit a bank account. It's yet another blow to a woman who just wanted to buy a home.

"It was supposed to be a happy time, and it was just clouded. Clouded by this crime that was committed against me," she said.

Fortunately, Carlson's parents were able to help her pay the down payment and she was able to close and move into her new home.

As for the $9,000 which was recovered but never sent, the I-Team reached out to Chase Bank and they apologized for the long delay and finally sent Carlson the money.

The avoid this scam, before you wire any money always pick up the phone to make sure the person you're sending the funds to is who they say they are, and make sure you're wiring to the right place.

Statement from Chase Bank

"We contacted Ms. Carlson to let her know we are releasing the funds we recovered to her account ($9,000). We apologized that it took this long. The original wire was processed as she instructed and we tried to recover the money as soon as she notified us there was an issue."