I went into the back office section of my real estate website for St Cloud MNand found that the new buyer lead was from a person named Mr Hu Sang the Chief Financial Officer (CFO) CMEC LTD who would be relocating to Minnesota and was looking for a reliable real estate agent, found our firm and wanted to work with me to purchase his retirement home. The description of the home was very simple "I need a 2 or 4 bed room home or apartment of $500,000.00 USD - $1,000,000.00 in nice neighborhood in your location. The home will be a cash buy and I will fly to Minnesota for viewing the property but before that I would like my stock broker in Canada to send the money to your firm via a lawyer/solicitor" The email was longer with niceties but I am trying to get to the heart of the matter. I did chuckle as with home values in our area being what they are he could buy a LOT of home or an apartment complex in that price range.
There was contact information included to get in touch and begin the process of working with my new buyer. I happily emailed back and also let him know that after talking to our Office Administrator he had stated "a certified check for the funds should be sent, via Federal Express (or similar) to our offices, for deposit in RE/MAX Realty Source Trust Account. After funds are secured in the trust account they may be used for earnest money deposit at the time of an offer to purchase, home inspection fees, and purchase closing."
The reply email is where it starts to get interesting: "I would like to inform you that my stock broker will be sending you a payment of $540,000.00 via UPS $300,000.00USD will be the down payment of the property. $240,000.00USD will be for the purchacse" of home furnishings (described in some detail) for the home. I was asked to update them after I had received the funds and they were available, and told that there would be a memorandum along with the funds to sign, and send back. I need to check with legal about using monies placed into the escrow account and then being given back, why not just keep the funds and only send me the check for $300,000, right?
Next I get an email from another person identified as the stock broker with a tracking number for the package. I am told "I have sent you a payment of $540,000.00 on behalf of Mr. Lee Chang this payment was sent by ups please update us once you have receive and deeposit the draft." See you caught it too, the name is wrong.
We looked up the company Dominion Blueline and found that they are a printing company (I removed the account number just in case it is a real checking account). Also after checking with my broker and legal found that we can not give money out in this manner as it might be being laundered. Then I did a little more checking and found that banking laws are not the same in all countries, it is very easy to get burned with a deal like this, you deposit the money, within a few days it looks like the money is in the escrow account for your broker and yet in fact it is not, it can take up to 1 month or longer for funds to be transferred out to an American bank from Canada. We sent back several emails to get the person, if they were not a scammer, to send a new check for the exact amount of the down payment explaining that we could not give money back for the purpose of purchasing furniture and home accessories. We have never heard back.
I am posting this is now because we just tripped across a memo from Fidelity National Title Group sent out to local real estate offices on May 28, 2010 and I am sure that this is part of the same scam. The memo is titled Counterfeit Check Scam, they state that they have had eleven of their offices detect this scam recently and have had 2 attempts in Minnesota.
The pattern is the same:
- All cash offer to purchase property
- Selling broker/agent has never met the buyer
- Buyers have not actually seen the property in person
- The buyer is located outside of the country
- The initial deposit check amount exceeds the required money necessary for the transaction
- Excess funds are requested to be sent out to another business or person
- The deposit check is drawn on a Canadian Bank or on Dover Federal Credit Union
This scam, if it works even once could do irreparable harm to an unsuspecting home seller and could also leave the agent and broker exposed to potential prosecution under federal money laundering statutes.
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