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Wire Fraud Advisory

VENTURA, California – District Attorney Gregory D. Totten warned today of a fraud scheme in which individuals purchasing a home or engaging in business transactions can be tricked into wiring large sums of money to thieves.  Sadly, in many cases, the money cannot be retrieved.

This scam is called Business Email Compromise (BEC).  Typically, the suspect hacks into an email account to monitor communications about an upcoming real estate purchase or business deal.  When the deal nears completion, the suspect will send a “spoofed” email to the purchaser that falsely appears to be from a real estate agent, escrow officer, or title agent involved in the transaction.  The fraudulent email provides instructions on wiring the funds (e.g., a down payment for a house) and the consumer wires money to an account under the suspect’s control. Once received, the funds are rapidly – sometimes within minutes or hours –  wired overseas or converted to cryptocurrency such as Bitcoin. Too often, these funds represent the consumer’s life savings.

Recently, the Ventura County District Attorney’s Office received reports of fraudulent BEC transactions targeting consumers in our area. A prompt investigation resulted in the return of most of the stolen funds to the victims.  In one case, $358,405 of funds an individual had sent to purchase a small business was recovered.  In another case, $142,770 of a down payment for a home was recovered. Quick action by consumers and investigators was essential to thwart these crimes.  Unfortunately, in many cases, by the time the theft is discovered, the funds have been transferred and cannot be recovered.

Last year in California alone, over $42 million was lost to BEC scams. Fifty percent of victim losses stemmed from BEC fraud involving real estate transactions. Nationwide, BEC causes $3.1 billion in losses. The District Attorney recommends the following tips to avoid becoming a victim of this type of fraud:

  • Obtain names and phone numbers from all real estate professionals – including the buyer’s or seller’s agent, escrow agent, attorney, and any other professionals that may be involved in the purchase or sale of the property – at the beginning of the transaction.
  • Never wire or electronically transfer funds (including opening deposits, down payments, or earnest money) without first calling and verifying all emailed wire instructions. Use a known phone number obtained at the beginning of the transaction for this confirmation. Do not use any phone number provided in an emailed wire transfer instruction. This confirmation should be accomplished by voice, not by text or email.
  • Throughout your real estate transaction, provide sensitive information only by voice rather than by email or text. Limit social media use, including location information and check-in sites, and do not discuss pending real estate transactions on any form of social media. Such information may be used to target your transaction and to better time fraudulent wire transfer emails.
  • Insist your real estate professionals communicate with you using secured business email accounts instead of free email services such as Gmail, Yahoo, Hotmail, etc. Secure your own email accounts with multi-factor authentication, strong passwords, and virtual private network (VPN) services if using free email services.

Consumers who believe they have already wired funds to an unauthorized account should immediately do the following:

  • First, contact your bank, in person, and demand a wire recall. Obtain confirmation that the wire has been reversed. If the transfer has been made after normal business hours, call your bank’s 24‑hour customer support line.
  • Second, immediately file a fraud report with the Federal Bureau of Investigation at https://bec.ic3.gov/
  • Third, submit a real estate fraud complaint form to the District Attorney’s Office through www.refat.org

In light of the pervasive spread of business email compromise activity, consumers must be especially vigilant. Once funds have been wired out of a consumer’s account, successful recovery of those funds is often impossible.

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The Ventura County District Attorney’s Office is the public prosecutor for the county’s 850,000 residents. The office employs approximately 280 employees including attorneys, investigators, victim advocates, and other professional support staff who strive to seek justice, ensure public safety, and protect the rights of crime victims.

Follow the Ventura County District Attorney’s Office on Twitter @VenturaDAOffice  Download Press Release

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13th Annual Fraud Awareness Forum

42107966_2616259461721370_6431242354962726912_nDATE AND TIME: Wed, September 19, 2018  12:00 PM – 2:00 PM PDT

LOCATION:
Residence Inn by Marriott Oxnard River Ridge,
2101 West Vineyard Avenue,
Oxnard, CA 93036

The Real Estate Advisory Team (REFAT) is a unique collaboration between the Ventura County District Attorney’s Real Estate Fraud Unit and Ventura County real estate professionals. The combined knowledge and expertise of these volunteer team members help identify the types of frauds taking place and keep on top of the ever changing tactics of scammers who seek to take advantage of Ventura County residents.

REFAT’s mission is to prevent, detect and report real estate fraud. We strive to accomplish this through educating two groups; real estate professionals and the general public. Our industry outreach to agents, lenders, escrow companies, title companies, etc. is essential as these professionals directly participate in most real estate transactions and are the “front line of defense” since they are in an ideal position to detect warning signs and take action to prevent fraud. Our public outreach efforts are aimed at educating the public and to provide them tools and resources to detect warning signs of real estate fraud so they can avoid becoming a victim. REFAT also provides information on how to report incidents where you know or suspect that you or someone else has been defrauded.

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Upcoming Event: Legal update and upcoming BRE changes

BRE EVENT 2018bbREFAT Presents
Legal update and upcoming BRE changes
Where: VCCAR training room
When: Wednesday May 23rd, 2018
Lunch & check in 12:00
Presentation 12:15-1:15

EVENT IS FREE!

RSVP requested, but not required

Speakers:

  • Jennifer Felten, Attorney at law
  • Carlo H-Banki, Statewide Facilitator/ Special Investigator, BRE

 

 

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District attorney’s warns of rental frauds

gdt_meet_da-190x110The Ventura County district attorney’s office advises residents to be vigilant when using online listing services to secure rental housing.

Such services do not typically verify that the person advertising a property is actually authorized to list the property for rent. This creates an opportunity for criminals to prey upon unsuspecting victims.

Because of the ease of listing properties online on sites such as craigslist.org, scams are difficult to detect. An online rental scam can be orchestrated from anywhere in the world.

The VCDA’s office offers the following tips to renters to avoid becoming a victim of fraud:

  • Arrange to meet with the owner or agent to inspect the property before paying any money. If the “owner” is out of town or otherwise “unavailable” to show the property, or states the property may not be shown, renters should look for another rental property.
  • Be wary of advertisements offering a property at below market rent or at a significant discount.
  • Do not pay for rent or a security deposit with cash or via a wire transfer. Credit cards may offer some protection in the event of fraud.
  • Whenever possible, deliver payment to an open and established business and avoid sending money through the mail. Request a signed lease agreement and keys to a rental property in exchange for the initial payment.
  • Obtain identification from and make note of whomever is claiming to have the authority to rent out the property.
  • Be wary of people who claim to be a real estate or rental agent but provide a business card without a valid California Bureau of Real Estate license number.
  • Use websites that have visible customer feedback, ratings on landlords and a reputation for secure transactions.
  • To prevent identity theft, do not provide a Social Security number, driver’s license number or bank account number until verifying that the person renting the property is authorized to do so.

If a property is advertised by someone claiming to be a real estate agent, verify their credentials at the California Bureau of Real Estate website at www.dre.ca.gov.

If the listing is being advertised by a property management company, such companies are also licensed by the bureau. Their credentials can be verified at the website listed above.

The best practice is to work with a licensed real estate agent or property manager to find legitimate rental properties. If an agent fails to perform due diligence and a consumer loses money as a result, the consumer may contact the Bureau of Real Estate to seek restitution.

Victims, property owners or agents who find an unauthorized property being offered for rent online should immediately submit a report to the district attorney’s real estate fraud unit at rentalscam@ventura.org. Only report suspicious properties advertised in Ventura County.

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11th Annual Fraud Awareness Forum

Industry update on the latest fraud activities affecting real estate and mortgage industries.
Featured Speakers: Wayne Bell, Commissioner, California Bureau of Real Estate
Jennifer Felten, Esq., Principal Owner and Attorney RELAW, APC
Tony Wold, Deputy District Attorney, Real Estate Fraud Unit, Ventura County District Attorney’s Office

WHEN: Thursday, September 22, 2016 from 11:45 AM to 2:00 PM (PDT)
WHERE: Residence Inn Oxnard River Ridge – 2101 West Vineyard Avenue, Oxnard, CA 93036

We like to thank everyone who came to The 11th Annual Fraud Awareness Forum. For more information visit www.refatevents.org #Ventura#Camarillo #VenturaCounty #Moorpark #SimiValley #SantaPaula #Fillmore#Forum #Fraud #RealEstateFraud #RealtorsSlide 1small

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Evenet Banner wayne bell

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Real Estate Fraud Town Hall Meeting

October 18, 2011

Ed Martinez, REFAT Public Outreach Committee Member

Oxnard, Calfornia-People from all walks of life with the common bond of home ownership came to listen with hopes of finding a way to navigate through the maze of information to help save their homes. Some are in default others are considering their options but all came to hear what the speakers had to say. Every home owner had specific items of interest they came to hear.

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The event was hosted by local radio personality David Cruz. In attendance were County Supervisors John Zaragoza and Kathy Long. Also in attendance were District Attorney Greg Totten and Senior Deputy District Attorney Miles Weiss and Ventura County tax assessor Mark Lunn. A representative from State Assemblyman Das Williams office was also present along with members of the Real Estate Fraud Advisory Team and other real estate professionals and affiliates. Quite an impressive group showing the community support in our efforts to combat real estate fraud.

After introductions, Senior D.D.A. Miles Weiss presented what the D.A.’s office has been doing to prosecute individuals who are preying on distressed home owners. Spanish speaking and the elderly community are the ones most at risk to falling victim to these predators. Some families have been victimized several times. He said the goal of the meeting from his office’s perspective was to educate the public and prosecute violators.

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As Mr. Weiss spoke, a power point presentation showed the mug shots of some of the predators, some had the word “Guilty” written across their photo. The remainder had been charged but not found guilty as of the meeting. Mr. Weiss told how many people view each person who comes to offer aid as just another voice promising the same thing. We are not all the same, there is help.

He emphasized to make a plan of action, and told the crowd that it has been illegal since October of 2009 for anyone to charge fees in advance for assistance in obtaining a loan modification, refinance or short sale. Home owners should open and real letters from their bank. There may be an action plan from the bank inside that letter.

Mr. Weiss ended his presentation with empowering home owners to make an action plan. He said if you own the home, own the problem. Partner up with local professionals who can help free of charge, and work directly with your lender for the best chance to save your home.

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Mr. Fernie Campos represented the Real Estate Fraud Advisory Team (REFAT) he informed people that there is a real estate fraud referral hot line (805) 751-5899 they can call to answer their questions There are 25 real estate agents and affiliates on the REFAT team that are committed to combating fraud. One of the factors with regard to fraud is that people don’t talk about it. There is a web site www.refat.org they can also log in to for help. The key is reporting fraudulent activity.

National Association of Hispanic Real Estate Professionals (NAHREP) was represented by Jorge DeLeon. He told the crowd that NAHREP is working with fraud prevention groups and one of the goals of NAHREP is to help people achieve the American dream of home ownership.

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Surepath Finanancial Solutions and Cabrillo Economic Development Corporation (CEDC) offered help at no charge to distressed home owners. Some perceive that no charge means there is no fight on behalf of the home owners. That is an incorrect assumption and assured the group that they are advocates for home owners. They are both organizations that are housing and urban development (HUD) approved by the U.S. Government.

The meeting lasted almost two hours. Home owners left with information on where to get free help from local organizations and had an opportunity to see that there is a community of support fighting real estate fraud. They left knowing that we are one of the most progressive counties in the state attacking real estate fraud.

I was able to meet three attendees to ask their thoughts on the town hall meeting; Pedro said he was impressed with the representatives who were in attendance but his experience with CEDC was not a good one. He said he had called them and made to feel that his case was a bother. He was not giving up and will reach out to Surepath in hopes of resolving his issue. He was glad to learn there was more assistance available. I reminded him of the REFAT web site and hotline in case he needed it.

Gerardo heard about the meeting from the radio show. He was glad there was a Spanish speaking interpreter. He is disgusted that his race is being targeted but knew that before the meeting. He wished he could do more to help his community. I told him he can help by spreading the word to everyone he knows. He said there was not enough information on how to do a loan modification and thought the meeting may have given some a false hope that everyone can save their home. He is still hoping for the best in his case.

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Jorge told me he was a victim. He had paid $3,000 to a company to help with a loan modification. There was never any action performed by the company and his home is still in default. He would like to see the mug shot of the man who took his money on the wall some day. He noticed that none of the predators offering help were in attendance. Jorge did get some valuable information that he hopes will benefit his situation. He went to the table at the back of the room and gathered information. He will not be paying anyone to help him now that he knows there is free help available.

Copyright 2012, REFAT

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REFAT Helps Industry Professionals Lose Fraudulent Weight

May 20, 2010

Janet Dorsey, REFAT Public Outreach Chair
If you weren’t in attendance at the Ventura County Real Estate Fraud Advisory Team’s (REFAT’s) Industry Outreach Forum on Thursday, May 20th, you missed out on three dynamic, heavy-hitting speakers discussing current fraudulent activity and efforts to lose the fraudulent weight.
Stella Ling, Sr. Attorney at the California Association of Realtors® (C.A.R.)
Jeff Davi, California Department of Real Estate Commissioner
Miles Weiss, Sr. Deputy District Attorney – Real Estate Fraud Prosecution Unit
The Chairperson for REFAT Industry Outreach, Charlene Williams, welcomed attendees and gave a brief introduction and overview of the day’s events.  Jim Keith, Chairperson for REFAT, played the role of emcee.

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The opening statement was given by Ventura County District Attorney, Greg Totten, who congratulated and commended the work being done by the REFAT to educate the public and industry professionals about fraudulent activity and ways to prevent and report real estate fraud.  The DA discussed a $1.7 million grant award from the Federal Government to continue prosecutorial activities related to real estate fraud.  Only 7 awards were granted in the entire United States and the Ventura County DA’s office was the only recipient in California – making his office the envy of other DA offices in the state.   Mr. Totten attributed the efforts between his office and REFAT on winning the grant and said it would not have happened without Realtor® collaboration.   The grant has allowed the DA’s office to hire 1 additional Deputy DA in the Real Estate Fraud Prosecution Unit, as well as provide an additional investigator and support staff.
First to weigh in on current real estate fraud was Stella Ling.  She gave the crowd of over 200 real estate industry professionals the A-B-C’s on Short Sale Flipping.  Stella has a comedic quality in her delivery, which made what could have been a complex and confusing explanation, something that was informative and entertaining.
Party “A” – Seller & Facilitator of Short Sale
Party “B” – Buyer with lowball offer marketing property to new/subsequent buyers
Party “C” – Buyer purchasing from Party “B”
In a nutshell, Party A lists the property for sale at below market value to obtain a quick offer from Party B and submits it to the lender for Short Sale approval.  In the meantime, Party A continues to market the property for sale with Party B without the knowledge or consent of the lender.  Party C makes an offer at a market value to Party B.  Party B accepts the offer and they concurrently close both escrows.  The higher purchase price is never disclosed to the lender and the second closing happens outside of the original escrow.
Stella made the following points to help keep Realtors® out of trouble:

  • Realtors® owe a Fiduciary Duty to their clients.  It is not in your client’s best interest to not submit the highest and best offer to the seller’s lender.
  • Do not allow transactional activity to happen outside of escrow.
  • Realtors® are prime targets for a seller’s attorney after a Short Sale.
  • Sellers or Lenders can sue for the purchase price difference between Party B and Party C.
  • Seller damages can be tax liability for debt forgiven, lender deficiency clauses, equitable damages (i.e. seller wants to undo the Short Sale)
  • There could be Loan Fraud for Party C if they are used as a Straw Buyer
  • Realtors® could be prosecuted for aiding and abetting loan fraud

Could be construed at defrauding the US Government on government-back loans (VA, FHA, Fannie/Freddie Loans)
Stella’s advice:  Because Realtors® need protection, CAR has employed a crack team of 15 attorneys at no additional charge to Realtors®.  USE THEM!

REFAT Fraud Forum May 2010-DRE Commisioner Davi

Jeff Davi was the next speaker to weigh in on the subject.  Jeff opened with the No Advance Fee for Loan Modifications law (SB94) [1] that has been in place since October 11, 2009.  This law applies to everyone claiming to help a consumer with a loan modification including attorneys, real estate agents and consultants.  He offered up the following stats:  The DRE has opened 2400 investigations on Loan Mods; 75% of all Loan Mod complaints going to the DRE come from Southern California.

Mr. Davi went on to say that many of the Loan Mod scammers have morphed into Forensic Loan Audit companies claiming to review your loan documents for RESPA violations and charging an up-front fee for the service.  This is essentially just another way to get around SB94 and scam people out of their hard earned money at a time when they are seeking assistance to reduce debt obligations.

Recent DRE Actions
While the DRE does not have police powers, they have collaborated with law enforcement agencies.  The DRE now has trained investigators whose interviews and investigations can be used by law enforcement.  Why is this significant? Law enforcement no longer has to go back and re-interview dozens of witnesses which helps speed up their prosecutorial efforts.

The DRE has also beefed up their website.  The site is now more consumer-friendly and includes Consumer Alerts, new laws affecting real estate, and a Financial Services License Status Check.

Mr. Davi admitted they are overwhelmed with complaint-driven issues and simply do not have enough manpower to conduct as many random audits as they’d like, but that doesn’t mean audits aren’t being done.

In closing, Mr. Davi predicted there will be an upsurge in Debt Collector Fraud due to the numerous Short Sales in the market.  Essentially, Debt Collector Fraud occurs when someone claiming to be a debt collector fraudulently claims a deficiency note has been sold to them.  They then begin collecting monies from unsuspecting former homeowners on notes they don’t legally own.

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Last to weigh in on real estate fraud was Miles Weiss.  Mr. Weiss explained the nuts and bolts of Securities Fraud, Money Laundering and Aggravated White Collar Crime as tools to prosecute real estate fraud.

The audience, of course, was eager to hear about the prosecutions and convictions obtained by the DA’s office and Miles didn’t disappoint.  Since January 2009, there have been 191 complaints to the DA’s Real Estate Fraud Prosecution Unit.  80% of those are related to Loan Modifications, which represents a dramatic shift from the previous top crime of Loan Fraud.

Mr. Weiss went through several presentation slides detailing the crimes committed and the sentences obtained within the last couple of years.  His last slide was a teaser, though.  It showed 3 simulated mug shots for a pending arrest of 3 Ventura County residents.  Weiss indicated the arrest would happen within the next 24 hours, which did occur.  See related story from the Ventura County Star.

From my perspective, Ventura County REFAT put on another, well-received and informative Industry Outreach Forum.  To stay informed on real estate fraud prevention activities, please visit the Ventura County REFAT website at www.REFAT.org.  To invite an expert from Ventura County REFAT to speak at an upcoming event, please contact Kay Runnion at (805)981-2100, or visit our contact page.

Copyright 2012, REFAT