This Ring of Bad Guys Could Be Coming to Your Town Next
Nancy Bradshaw, Escrow Officer at the Belleair Bluffs office and Natalie Allshouse, Gulfport Escrow Branch Manager, both from the FNT Tampa, Florida operation, were working on individual suspicious transactions. Nancy reported her suspicions to her Escrow Manager. Natalie reported her suspicions to her County Manager, since unbeknownst to her the Escrow Manager was already deeply involved in the other case. Little did they know how interrelated the two transactions would soon become.
Nancy ’s file was an $860,000 purchase
- Seller submits an invoice for “services rendered” in the amount $135,000
Natalie’s file was a $1.2 million purchase
- Seller submits an invoice for “services rendered” in the amount of $200,000
The following red flags were the same between the two transactions:
- Payment of the invoice was to be remitted to a corporation in Indiana
- Mervin Jones was the buyer (straw buyer, or a loan applicant whom perpetrators use to obtain home loans, but who usually doesn’t intend to occupy the purchased properties )
- The entire deal was orchestrated by the seller; the Escrow Officer never had contact with the buyer
- There was no down payment; the loan represented 100 percent financing
- Buyer was relocating from Indiana to Florida
- Seller was located in Indiana, even though the property was in Florida
After the Escrow and County Managers started to link the two files, they did some investigative work. Based on their investigative tactics, they should be appearing on the next episode of CSI: Miami. Using Choicepoint, the nation’s leading provider of identification verification services and other tools, the managers of the Tampa operation were able to uncover the following:
- Both deals were orchestrated by the same mortgage broker
- The buyer indicated he had been employed with the same company for three years; however, the company had only been incorporated for less than one year
- Appraisals had both indicated these were “distressed sales”
Further investigation revealed that the $860,000 property had been purchased only three months ago for $638,000, a difference of $222,000. The $1.2 million property had been purchased less than twelve months prior for $750,000.
The managers decided to take action. Armed with the aforementioned evidence, they reported the suspicious mortgage activity to the funding lenders in both transactions.
The lenders decided to re-verify their borrower’s employment. Each lender left a voicemail message at the borrower’s supposed place of employment. In both instances, the employer called back from a cell phone and the return phone call was from the same “corporate officer” each time. Of course, the borrower’s employment record was nothing short of stellar, but the lender found it odd that the “corporate officer” verifying employment for the borrower had the same exact name as the purchaser listed on an unrecorded land contract for the borrower’s Indiana property!
Both lenders decided that the facts warranted further investigation. They soon discovered that no address or business existed for the employer in the State of Indiana as purported. The lenders both decided to pull their loans.
Needless to say we resigned as escrow holder and title insurer for both transactions. But wait – there’s more! The managers ran the names of the principals at all branches only to find that they had previously closed two transactions for these same parties and had open orders for an additional four transactions. They resigned on all transactions and proceeded to publish the names of the perpetrators with all Corporate Underwritering staff and Claims Officers throughout the Company to help other operations avoid the same scheme.
This was a complex scheme by multiple ring leaders. Unfortunately, in our industry we are exposed to fraud everyday – the majority of which is never acted upon. Due to the professionalism and expertise of our closers, they were able to identify the red flags and react swiftly to halt the transactions and put an end to these scams – as well as putting the rest of our operations on notice.
Along with our gratitude and recognition, both Nancy and Natalie have received rewards from the Company of $500 each.