I am Dr. William Grey, M.D. and internist in Titchfield Engalnd. I am relocating my family to Madison, Wisconsin and I am interested in retention of you services to buy a house. Please send me information about homes that costing $400,000 to $600,000.
Sounds too good to be true? In most cases it is too good to be true – it is a complex scam that we first wrote about in 2010. Its back and scammers are posing as oil rig workers from China.
Falling for the Scam
The scammers are sophisticated and even the suspicious, cautious REALTOR or attorney can fall prey. A wealthy, out of town buyer relocating to your area is every REALTOR’s dream. When you look up the foreign buyer’s name, you will find his information checks out. And, upon further emails, he will be very specific about his needs and wishes. He will tell you about his wife and children, his need to for 3 or more bedrooms, his desire to be near a school and he may even tell you the neighborhood he likes best.
Then, after sending 5 or 6 listings, he will tell you he is ready to buy MLS Listing 0654321, the beautiful colonial on the west side. “Please make a full price offer, unless you think, in your judgment, that a different amount would be appropriate.” He will also provide you with the name of his financial advisor in New York and ask you for a referral to a local attorney.
At this point, the deal still seems suspicious, too good to be true, and likely to be a scam. But how can it be? He’s using a local attorney. He has a financial advisor at Global Financial, Inc. in Manhattan. And, his emails are so specific.
How The Scam Likely Works
The buyer signs an offer to purchase remotely from China (or England or Canada) and then sends in the earnest money to either the REALTOR or the attorney. The earnest money check will be far larger than the customary amount — it may even be for the entire purchase price. Oops. And some cases, the buyer will also send another check for a hundred thousand dollars or more. OOPS! Then, after the checks have been deposited, the buyer will request that the excess funds be returned via wire or western union. Even if the funds appear to have cleared or been credited to the REALTOR or Attorney account, the check will bounce. It was a fake. The wire goes to a foreign bank and is gone forever.
Avoiding the Scam
If a transaction appears too good to be true, it likely is. Some red flags and similarities include:
- A foreign buyer sends you large amounts of funds by accident
- A buyer asks you to deposit funds that come in by check and, shortly thereafter, return them via wire or Western Union (Western Union is a major red flag!)
- A buyer offers to pay full price for a house, sight unseen.
- The Financial adviser either is named Karen James or Paul Jackson and may work at Global Financial, Inc. (While it is possible these are real names and individuals, scammers are using these names)
- The Buyer is from China, Japan, England, or Canada (really any foreign country where the buyer is suddenly relocating and buying sight-unseen)
- The initial emails contain typos or poor grammar
- The Buyer moves incredibly fast, making a decision in hours or even minutes rather than days or weeks.
- The Buyer’s name is Otake Iwao, Miki Watanabe, Han Cheung, Han Hung, or Yuji Inoue
- The Buyer works or lives on an Oil Rig in southeast Asia
- The email address comes from @asia.com or some other generic email .
If you suspect a scam, ask lots of questions and have verbal, phone conversations at a minimum. Don’t send any private information, bank account numbers or anything else that you would not want a scam artist to have. Alert your Broker or legal counsel whenever a foreign individual is sending funds, even if the funds originate within the U.S. — this alone is cause for caution. Do not send out wired funds if the incoming funds were not wired. And do not send back large amounts until your bank can confirm with 100% certainty that the incoming funds were legitimate and fully cleared. Having access to the funds does not mean they cleared. Work with your bank to provide solid assurances that the funds are real and cleared whenever you suspect fraud.