It’s rare. But inflation might be making it more common. And when it happens, we can see the stories as the Justice Department and the FBI report them on their websites.
What happens when real estate agents turn to crime? What do their schemes look like?
Here are just a few recent examples of residential real estate agents who brazenly manipulated people — and how they got caught.
Reported July 2022: Unlicensed Florida Agent Sells a House…to Five Different People
A former real estate agent ran a real estate scam by pretending to sell the same property to multiple buyers. Their targets lost the deposits, according to police.
Florida suspended Reyner Labrada from real estate practice in 2020. Yet it seems Labrada recently took deposits from more than 100 people for the same address in Miami Gardens. The real owner reportedly had no clue what occurred.
Labrada’s secretary tipped off the police — who also allege that Labrada pretended to actually convey the property to at least five buyers.
Labrada ghosted all the victims on their closing dates.
Labrada has been charged with 11 felonies so far. They include the scheme to defraud, grand theft, and acting as a real estate broker while being unlicensed. He was arrested in July.
Reported August 2022: Florida Real Estate Agent Charged With Conspiracy and Bank Fraud
On August 3, 2022, a Department of Justice press release, issued through the U.S. Attorney’s Office in the Middle District of Florida, reported a grand jury’s indictment of Maria Del Carmen Montes. The licensed agent from Kissimmee, Florida faces bank fraud and identity theft charges.
Also charged with bank fraud is Montes’s spouse. If convicted, each one could face decades in federal prison.
The pair allegedly hatched a mortgage fraud scheme to print fake pay stubs and W-2 forms. Then they submitted loan applications for ineligible borrowers.
The complicated ruse involved yet another person, pretending to work at a company, verifying the faux employees. The scheme allegedly worked, and the home buyers got home loans.
This case was investigated by the FBI, and the Inspector Generals’ offices for the Federal Housing Finance Agency and the Department of Housing and Urban Development.
Reported August 2022: A Couple of Virginia Real Estate Agents Sentenced for Wire Fraud
On August 3, 2022, a press release from the Department of Justice, through the U.S. Attorney’s Office in the Western District of Virginia, said a married couple received sentences for federal wire fraud. The scheme involved fake home sale contracts. They submitted the contracts to multiple advance commission companies. The scheme spanned March 2016 to November 2019, netting the pair more than $300,000.
Advance commission companies are just what they sound like. They pay agents cash advances on sales commissions.
As part of the scheme, Jessee Allen DeLoach and Natasha Ashley Miller DeLoach even created fake title companies to verify the bogus contracts for the advance commission companies.
Each of these audacious agents got something they didn’t expect, too: 15 months in federal prison.
The Federal Bureau of Investigation and the Virginia State Police investigated the case. Local law enforcement assisted.
Reported August 2022: Hackers Steal Down Payments From Michigan Home Buyers
Michigan real estate agent Stacey Robach, together with Tom Cronkright, who owns the Sun Title company, were targeted by fraudsters who steal down payments. The title company lost almost $200,000 in a wire fraud scheme.
☛ Closing fraud is a major problem. Homebuyers should be on the lookout for hackers who steal down payments through wire fraud schemes.
Criminals are creating fake phone numbers and email accounts, and even bogus websites. They pretend to be legitimate title company employees, lenders, and real estate professionals. Their messages co-opt language and details that agents use, and home buyers wire money to them in the belief that they are sending money into escrow.
Last year, the FBI said the number of real estate wire fraud cases in the country numbered about 20,000. Lost funds are running well into the billions.
FBI Notes Spike in Real Estate Scams as Inflation Surges
Scammers are targeting owners of rental properties, too. The homeowner might advertise a house for rent, then accept a payment from a supposed renter. The supposed renter then asks for a refund for a payment or an overpayment. The property owner doesn’t know that the payment wasn’t real in the first place.
Then there are fake owners who demand upfront payments for apartments that turn out to be unavailable. In some cases, the real owners have nothing to do with renting their properties, and know nothing of the online advertisements the hopeful renters are answering.
According to the FBI’s Internet Crime Complaint Center (IC3), such scams are up 64% year-over-year. Often, the victims are vulnerable students and people in extremely tight markets who are left by their scammers with nowhere else to live.
Be Careful Out There
Finding a place to live can be complicated and psychologically stressful. Often, a lot of money changes hands. This combination is a magnet for swindlers. So, keep alert when making any type of financial agreement involving real estate. Watch out for signs of the various types of fraud described above.
The FBI recommends taking the following precautions to avoid being ripped off:
- Don’t send funds to unknown people. Got email instructions? Make a call to the legitimate recipient of the funds before sending money. Verify who’s sending the instructions.
- Sent a deposit? Follow up and be sure the funds have been received.
- Don’t agree to put a deposit down on a house or apartment without seeing it.
- Be careful about renting property out to someone who hasn’t toured it.
- Verify the homeowner’s or property company’s identity through public records and reviews.
- Be wary of submitting an online application before meeting with the application recipient.
- Know the local market and prices. Look out for deals that don’t jibe with the norm.
- Accept payments for correct amounts only.
What if you believe you’ve been drawn into an in-person or online scam? Stop communicating with the suspicious person or people. Contact law enforcement sooner rather than later. Sometimes, a quick call to the bank and investigators makes it possible to recover the diverted funds. Readers can find the Internet Crime Complaint Center and learn how to register a complaint at ic3.gov.
Supporting References
Chris Gothner for WPLG Local 10 News (via Local10.com): Police [Report] Fake Hialeah Agent “Sold” Same Property to Multiple People, Stole Deposits (Jul. 26, 2022).
Department of Justice U.S. Attorney’s Office in the Middle District of Florida: Licensed Real Estate Agent and Her Husband Charged With Conspiracy and Bank Fraud (updated Aug. 3, 2022).
Department of Justice U.S. Attorney’s Office in the Western District of Virginia: Husband and Wife Real Estate Team Sentenced for Wire Fraud (updated Aug. 4, 2022).
ABC Action News (via Scripps National): Real Estate Wire Fraud Could Cost Homebuyers Thousands (Aug. 4, 2022).
Kristen Setera for the U.S. Federal Bureau of Investigation (Boston, MA): FBI Warns of Spike in Rental and Real Estate Scams (Jul. 12, 2022).
U.S. Federal Bureau of Investigation: Internet Crime Complaint Center (IC3).
And as linked.
Photo credits: Kindel Media and cottonbro, via Pexels.