In late June 2015, a contact within the Los Angeles County Sheriff's Department–Real Estate Fraud Unit, as well as a detective with the Beverly Hills Police Department (BHPD), contacted the managers of several title companies in the Los Angeles area to alert them of a recent identity theft case involving a victim residing in Beverly Hills, California.
Law enforcement advised an unidentified suspect had used the victim's identity to seek multimillion dollar loans on at least three occasions which were to be secured against the victim's property. The notification was provided as a courtesy to title companies in the Los Angeles area with a request for the Company's assistance in the event we became aware of any further transactions involving the victim and subject property.
Mike Merlo, Title Manager for Lawyers Title in Burbank, forwarded the information to Eldred Sotello, a Western States Underwriter, for the purpose of placing an Office Information (OI) posting on the subject property. Eldred immediately created and distributed a confidential memorandum, as well as posted it to the Fraud Prevention database. He had the memorandum posted to the title plant for the benefit of all Company operations.
Sure enough, on July 7, 2015, a title office in Burbank, California received a title–only order for the subject property from an independent escrow company operating in Woodland Hills, California. The order involved a $1.2 million loan from a private lender.
The initial title work revealed the OI fraud alert. Title Assistant Jennifer Tayco immediately contacted Eldred to alert him of the match on the new order. Eldred in turn advised Jennifer and Mike of the possibility of identity theft of the true owner of the subject property (based on the alert from law enforcement), and advised them not to proceed any further until discussing the order with him and the Company's Fraud Review Counsel.
The Fraud Review Counsel immediately contacted the Beverly Hills Police Department and advised the supervising detective of the new order. The detective provided further details on the extent of the fraud, including information that the suspect had been utilizing a Los Angeles area attorney through a forged power of attorney to facilitate these real estate transactions on his behalf.
The suspect was very cautious about exposing himself to anyone involved in the attempted transactions, and this was now the fifth attempt to perpetrate the fraud by using someone else's property to secure a $1.2 million loan. As a result of the Company's alert to the BHPD, the detective asked for the cooperation of escrow and the private lender in a sting operation in an attempt to try and apprehend the suspect.
With this information at hand, Fraud Counsel, Underwriting and the title officer made the decision to immediately cancel the order and decline to insure. The Company prevented a potential $1.2 million fraud claim.
As a result of her detection and prevention of the claim against the Company, Jennifer Tayco received a $1,500 reward and a letter of recognition from the Company. She did exactly what she was trained to do when the initial title work revealed the Office Information and Fraud Prevention posting alert. She contacted the underwriter for further information and direction on how to proceed.
MORAL OF THE STORY
The Company's ongoing partnerships with various law enforcement agencies have resulted in the reduction or cancellation of several fraudulent transactions preventing potentially millions of dollars in claims exposure.
The Company has long held mutually beneficial relationships with law enforcement agencies that we anticipate will continue to grow as real estate related fraud continues to increase and evolve. Underwriting utilized the information from law enforcement to create the proper alerts which ultimately prevented the order from moving forward.
If an employee ever has any suspicions at all of potential fraud, the underwriting department should be contacted for further review.