On December 11, 2017, an all cash sale was opened with Lawyers Title Company in Tempe, Arizona, for the purchase of property in Scottsdale, Arizona, for $775,000. The transaction required no new financing, so the closing date was scheduled for a few weeks later on January 3, 2018.
On January 2, 2018, the escrow officer received an email from what appeared to be the buyer's email address asking for their closing disclosure. The escrow officer responded indicating the closing documents, including the settlement statement, were sent to the buyer on Friday, December 29, 2017. The escrow officer explained there would be no closing disclosure, since the transaction did not involve new financing.
After a series of confusing and conflicting emails, the escrow officer looked at the chain of emails and realized the conversation she was having was with someone using a spoof account to look like the buyer’s email account.
The escrow officer immediately picked up the phone and called the buyer. She confirmed the closing funds were wired earlier that day to the wrong bank. She told the buyer to run to her bank and place a recall for fraud.
The escrow administration team also called the receiving bank branch and asked them to lock down the recipient’s account and told them that the account holder had illegally diverted a wire transfer in the amount of $762,741.09 earlier that day and likely would be coming into the branch any minute to attempt to withdraw the funds.
The bank branch manager confirmed receipt of the wire transfer to the account. She called her fraud team to investigate. The fraud team locked down the account. Then the branch manager called the local police to report the incident and find out what she should do to protect the bank's employees.
The police arrived and called Fidelity's national escrow administrator for more facts. They asked the home buyer who was duped into sending the money for information to make a detailed report and launch their investigation.
During the telephone call with the real home buyer, the account holder walked into the bank and attempted to withdraw the funds. The police confirmed with the buyer on the phone she wished to press charges against the account holder who illegally diverted her funds. The police hung up the phone, arrested the account holder and took her into custody.
In a happy ending, the recipient bank returned all of the funds to the buyer's bank. The buyer, believe it or not, was a real estate agent purchasing the property for herself. Luckily she was able to recover her funds and complete the purchase.
Remember email is not always a secure way to communicate. Company policy is to always verify wire instructions via a trusted phone number received at the beginning of the transaction.