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On February 12, 2018, Larissa Conrad, an escrow assistant for Ticor Title of Nevada in Las Vegas, opened an escrow transaction for the sale of a residential property for $240,000. Once the title report was received, Larissa ordered a payoff statement from the existing lienholder. The payoff was sent via e–fax and she placed it in the file awaiting closing.

On March 7, 2018, Larissa worked up the file and sent the estimated closing statement to the Listing Agent.

The Listing Agent then provided Larissa with an "updated" payoff statement by email with a number of demands for Larissa to confirm: that she received the new payoff statement and she would use that one in making the payoff.

It is not normal that an agent would order an updated payoff statement to be delivered to the settlement agent. Larissa was suspicious about the email exchange, so she forwarded the email chain to her escrow officer, Stacey Griffith, to review.

Stacey and Larissa knew something was wrong. They compared the two payoff statements closely. These were the wire instructions contained in the body of each payoff statement:

ORIGINAL Payoff Statement: ALTERED Payoff Statement:
WIRING INSTRUCTIONS
Account #: XXXXXXX279
ABA/Routing Number: XXXXXXXXX
Bank Name: Wells Fargo Bank, N.A.
Bank Address: 420 Montgomery Street
San Francisco, CA 94104

(the instructions included overnight delivery instructions for a cashier's check)
WIRING INSTRUCTIONS
Account #: XXXXXXX086
ABA/Routing Number: XXXXXXXXX
Wire Reference: USA/Birt/payoff
Beneficiary: Brit Equipment/payoff
Bank Name: Wells Fargo Bank, N.A.
Bank Address: 1445 Ross Ave. Suite 100
Dallas, TX 75202

(the overnight delivery instructions were removed altogether)

Together they called the payoff lender and confirmed their suspicion: the second payoff was from a fraudster! They detected the scam. They immediately contacted the Listing Agent by telephone, using a known, trusted telephone number. They reported someone was posing as him in the transaction and sending emails from an account that looked like his.

Ultimately, they wired the funds to the correct account of the payoff lender and saved the Company from a possible loss of $153,300.37! As a result of their actions, the Company has rewarded Stacey and Larissa $750 each, as a reward for their expertise in discovering the fraud and preventing it from occurring.

 

 
 

MORAL OF THE STORY

Unfortunately this story is not an isolated incident. We are seeing attempts at this same scheme across the country. Keep in mind payoff lenders do not frequently (if ever) change their wire information. All offices should be using their repetitive wires feature in their escrow production system.

If a payoff lender sends instructions to pay a different account, someone in the branch has to call to verify the changed bank wire information is valid using a known, trusted number not the number reflected on the payoff statement.

 
 

 

 
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