How an email could cost you your home in a mortgage closing scam

In today's The Perfect Scam podcast, meet a man who almost lost everything

Wire fraud scams during real estate transactions are perhaps the most believable kind of digital con I’ve ever seen. Buying or selling homes is already an incredibly stressful time. Consumers are classic “tourists” in the land of title companies and wire transfers, vulnerable because everything feels unfamiliar. Add to that this dastardly elelement: during an ongoing email dialog with your real estate agent, the victim receives a perfectly-in-context set of instructions on how and where to send their money.

In today’s episode of AARP’s The Perfect Scam podcast, we hear from someone who sent hundreds of thousands of dollars to such a criminal — and the race against time to get his money back.

It’s an important story. Wire fraud crime is soaring, according to federal authorities. And the crime gangs behind it have evolved into pseudo-religions; they believe they are playing to part of Robin Hood patriots, righting the wrongs of colonialism. I hope you’ll give this week’s Perfect Scam podcast a listen. Click play below, or click on this link.

INTRODUCTION:

Buying or selling a home is the biggest transaction many people ever engage in. Most of us do it only a handful of times in life. It's confusing. There's a swirl of paperwork, small details, and big money. There's a lot of hurry up and wait, a lot of tension. It's the perfect recipe for a perfect scam. There are nearly 2,000 real estate transactions taking place every hour in America, with almost 500 million dollars changing hands every hour. All that money makes for a very large target. When closing time comes, hundreds of thousands of dollars fly back and forth among the various parties usually via wire transfers and title companies. This method of transfer is usually secure, but if a criminal can trick someone into using the wrong wiring instructions, well, they can make off with hundreds of thousands of dollars in seemingly the blink of an eye. Wire fraud is an elaborate crime, often involving hacked realtor emails, fake companies, multi-hop international money laundering, and it's also become a way of life for people halfway around the globe one of our guests today says. It all adds up to a massive problem. There were 220 million dollars in wire transfer fraud loses in 2019, a 50% increase from the previous year. But behind every crime is a person. A person who might have lost all of their life savings or even lost their home. Let's meet one of them.

—PARTIAL TRANSCRIPT—

[00:25:26] Bob: Tom Cronkright thinks there's something more than money driving the increase in wire fraud. Something deeper.

[00:25:31] Tom Cronkright: We're doing some webinars with the Secret Service and other things nationally. We're doing a pre-call at noon, and the why behind cybercrime and these networks, it's, it's just becoming an ideology. This is transcending just monetary gain into a different identity in some of these countries which is why it's probably not going to slow down anytime soon. It has so much texture to it, unfortunately.

[00:25:55] Bob: In fact, Tom believes it's a way of life, an ideology. Tom says many of the criminals think they have the right to steal the money because they believe they are reversing the impacts of colonization.

[00:26:08] Tom Cronkright: Some of these people are viewed as patriots because they're, they're basically trying to rewrite history by stealing money or data or somehow monetizing and then bringing back to the country things that probably should have been done, you know had that period of time not taken place. From everything I've learned, I would certainly subscribe to the idea that it has risen to the level of an ideology in some countries, if not a quasi-religion. I mean, look, if, if you're viewed as a patriot, if you're viewed as someone that is contributing to, to the greater good, even if it's a small faction of the population identify with, I think you’ve crossed into a totally different realm.

[00:26:52] Bob: It's also a very profitable realm.

[00:26:54] Tom Cronkright: They're getting financial benefit along the way, that's the other thing. You know, you're talking about the countries where you know, the average wire fraud in real estate's right around 200 grand for people that, well what do they make? Two thousand, three thousand a year? I mean that just pencils very well from a return on what is a pretty small investment of time typically.

[00:27:17] Bob: New technology is making things even easier for the criminals providing new attack vectors.

[00:27:22] Tom Cronkright: The newest flavors of this are synthetic identity is a big one. So they'll purchase credentials on the Dark Web for an individual. They'll open credit in that individual's name, and then they will create an entirely new identity, a truly a synthetic identity and add that identity to an account. So think of it as my identity's compromised. And somebody goes in and opens up credit in my name, a credit card or a line of credit, and then I add John Doe, a completely made up individual to that line of credit so that when this fraudster walks in with a completely fake, I mean fake, fake identity, like this person, the name and everything about it doesn't exist, they're able to interact under that account in my name. And then when law enforcement goes to investigate or show up, it literally is a ghost.

[00:28:24] Bob: A digital ghost, created out of thin air or more accurately, created out of ones and zeros. Criminal gangs are even using artificial intelligence to finetune their crimes.

[00:28:36] Tom Cronkright: Well that's what it would be. The artificial intelligence is just that on user behavior. It's on communication, it's on, it's dissecting the playbook of the industry or that network, that they're ultimately going to defraud. And it's just terrifying. There's no world where that's good for any of us.