Feds Ar­rest 74 Peo­ple, Al­leg­ing Real Es­tate and Wire Fraud

National Mortgage News - - Compliance & Regulation - By Brad Finkel­stein

Fed­eral law en­force­ment au­thor­i­ties have ar­rested 74 peo­ple in this coun­try and abroad, ac­cus­ing them of par­tic­i­pat­ing in a wire fraud scam whose vic­tims in­cluded real es­tate at­tor­neys and set­tle­ment ser­vice providers.

The govern­ment was able to seize $2.4 mil­lion of al­leged ill-got­ten gains as well as dis­rupt and re­cover $14 mil­lion in fraud­u­lent wire trans­fers as part of Op­er­a­tion Wire Wire, an op­er­a­tion un­der­taken by the De­part­ment of Jus­tice, the De­part­ment of Home­land Se­cu­rity, the De­part­ment of the Trea­sury and the U.S. Postal In­spec­tion Ser­vice.

But that is just a drop in the bucket in the dol­lars lost to what the fed­eral govern­ment clas­si­fies as busi­ness email com­pro­mise schemes and its vari­ant, email ac­count com­pro­mise.

Vic­tims have re­ported over $ 3.7 bil­lion stolen since the In­ter­net Crime Com­plaint Cen­ter started keep­ing track of these frauds in late 2013.

Of the 74 peo­ple ar­rested, 42 were in the U.S., 29 were in Nige­ria and one each in Canada, Mau­ri­tius and Poland.

“I want to thank the FBI, nearly a dozen U. S. At­tor­neys’ Of­fices, the Se­cret Ser­vice, Postal In­spec­tion Ser­vices, Home­land Se­cu­rity In­ves­ti­ga­tions, the Trea­sury De­part­ment, our part­ners in Nige­ria, Poland, Canada, Mau­ri­tius, In­done­sia and Malaysia, and our state and lo­cal law en­force­ment part­ners for all of their hard work,” said U.S. At­tor­ney Gen­eral Jeff Ses­sions in a press re­lease. “We will con­tinue to go on of­fense against fraud­sters so that the Amer­i­can peo­ple can have safety and peace of mind.”

There were 23 in­di­vid­u­als charged in the South­ern District of Florida, in­clud­ing eight peo­ple in an in­dict­ment un­sealed June 4 for laun­der­ing $5 mil­lion from a Seat­tle cor­po­ra­tion, var­i­ous ti­tle com­pa­nies and a law firm, the De­part­ment of Jus­tice press re­lease said. The in­dict­ment does not con­tain the vic­tims’ names.

Sun Ti­tle Agency was one of the vic­tims in the Florida in­dict­ments, said Tom Cronkright, the owner of the Grand Rapids, Mich.-based com­pany. In to­tal, the fraud spanned eight dif­fer­ent coun­tries and in­cluded the use of “mules” — peo­ple paid to move the stolen funds, as well as money laun­der­ing to hide this money.

“Though our ef­forts to re­cover the money we learned how fo­cused and de­ter­mined they are to keep the money they have stolen,” said Cronkright, who is also CEO of Cer­tifID, a wire fraud preven­tion ser­vice he formed af­ter be­ing vic­tim­ized.

Pre­vi­ously Cronkright sued the al­leged per­pe­tra­tors in a civil case in or­der to re­cover the stolen money.

In a sep­a­rate in­stance, Glo­ria Okolie and Paul Aisosa, both Nige­rian na­tion­als re­sid­ing in Dal­las, were charged in an in­dict­ment filed on June 6 in the South­ern District of Ge­or­gia. The al­leged vic­tim was a real es­tate clos­ing at­tor­ney. The pair were ac­cused of send­ing the lawyer a spoof­ing email pos­ing as the seller and re­quest­ing that pro­ceeds of a real es­tate sale in the amount of $246,000 be wired to Okolie’s ac­count. The at­tor­ney ex­pe­ri­enced $130,000 in losses af­ter the bank was no­ti­fied of the fraud and froze $116,000, the DOJ press re­lease said.

“They are def­i­nitely fol­low­ing transactions,” said Michael Barone, a New York at­tor­ney whose firm han­dles clos­ings and has been tar­geted for sim­i­lar frauds but was not one of the vic­tims of any of the cases brought. “They are be­ing much more per­son­able in their emails, much more knowl­edge­able in their emails, as op­posed to in the past when they just said ‘we made a mis­take please wire it here.’ Now they’re copy­ing your sig­na­tures so it looks alike. It re­ally looks like they’re as­sum­ing your iden­tity.”

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