Kelly Ivy, Assistant Vice President and Senior Escrow Officer for Chicago Title in Houston, Texas, opened the transaction in her production system and receipted in the earnest money. While processing the order Kelly noticed the buyer on her transaction previously owned this property. The buyer of the current transaction actually sold the same property to the current owner in 2012 for $69,000 cash. The new sales price was $160,000. Nothing else in the chain of title appeared out of the ordinary.

The transaction progressed and the sellers notified Kelly they appointed an attorney–in–fact to sign their closing documents since they were out of the country. Kelly asked for the powers of attorney to be faxed to her for review and approval. Upon receipt she sent them to Bobbye Harris in the Underwriting Department for review. Bobbye was unable to clearly view the authentication seals, so she asked for the originals.

A few days later a very pushy woman showed up at Kelly's office without an appointment and during the lunch hour to drop off the original powers of attorney. She refused to leave unless she spoke to someone and received a receipt for the original documents. The receptionist made a copy of the first page of each of the powers of attorney and then handwrote on the copies "Received by Chicago Title" and noted the date. Satisfied, the pushy woman left.

The Underwriting Department approved the powers of attorney and Kelly prepared the closing statements. She sent them out to the principals for review. Additionally, to the buyer, Kelly included her wiring instructions and explained the closing funds must be in the form of a cashier's check or wire transfer. The buyer scheduled the signing appointment.

The buyer arrived on time for the closing and brought a friend with her. Kelly began reviewing the closing documents with the buyer and asked her if she wired the closing funds. The buyer stated she had wired the full sales price to the seller directly and outside of escrow. Upon hearing this, Kelly excused herself from closing. She discussed the transaction with one of her colleagues and together they decided they could not proceed unless the buyer wired her closing funds directly to Chicago Title.

Kelly returned to the closing and explained the seller needed to return the funds to the buyer. Then the buyer must send the funds directly to Chicago Title. The buyer said her bank was located in a foreign country, the same place as the seller. She further claimed, a competitor allowed her to proceed with this payment method and all Kelly needed to do was call the seller to verify the seller received the funds.

Kelly explained she needed the funds in order to properly account for all charges and adjustments, and collect her fees. The earnest money was not enough to cover them. The buyer claimed she had previously discussed this exact proposition with Kelly on the phone. Kelly reminded her, their initial conversation only covered the facts the transaction was a cash sale and no real estate agents were involved.

The buyer asked what else could be done. Kelly reiterated the funds had to be received by Chicago Title. The buyer said she would work with the seller to have the funds sent to her account in the U.S. and then forwarded to Chicago Title.

As the buyer got up to leave, the buyer's friend asked Kelly a few questions. He asked how the funds would get to the sellers. Kelly explained they would be wired to the sellers or she would send them a check. He also wanted to know if she could simply cut the proceeds check to the attorney–in–fact instead of the actual seller. Kelly explained in great detail why proceeds must be paid to the sellers of record. He seemed satisfied with her explanation and left with his friend.

After they left Kelly had a very bad feeling about the transaction. She called her title insurance underwriter to discuss the file further. Together, they agreed there were too many red flags to proceed:

• The funds were not here in the U.S. They were in a foreign country.
• Kelly never had direct contact with the seller.
• The purchase price was being paid outside of escrow.
• Kelly was asked to pay the sales proceeds to someone other than the seller.

Kelly resigned as escrow holder from the transaction. The buyer begged her to close the transaction stating she would have the funds wired to Chicago Title. She even stated there was no need to re–prorate if the closing was delayed a day or two because this was a sale amongst friends.

The attorney–in–fact for the seller showed up at the office demanding to talk with Kelly. Kelly asked her colleague to eavesdrop on the conversation so Kelly and Melissa Hull went to the lobby. Melissa made herself look busy while the attorney–in–fact questioned Kelly.

The attorney–in–fact asked what was wrong with their powers of attorney and why she thought this was fraud. Kelly simply answered she never said either of those things. Instead, the Company was unwilling to insure the sale thus she resigned as escrow holder.

Kelly listed off all the Companies which make up the FNTG Family and instructed them to take their transaction elsewhere. The buyer stated, "That is all the title companies in town, who else is left?" Kelly recommended they contact a real estate attorney to assist them. The attorney–in–fact said her sister should be able to help and left.

The attorney–in–fact returned for the original powers of attorney. The branch manager had her sign a receipt for the originals. Kelly reviewed the documents in the 2012 file and discovered the signatures on the powers of attorney did not match the buyer's signatures in that file. Kelly was relieved she did not close the transaction.