Email scam puts couple’s retirement plans on hold
The profit from the sale of William and Margaret Frederick’s home in Galena was stolen during an email scam. More than a year later, they are yet to see any of the $216,304 owed to them.
William and Margaret Frederick sold their Galena home more than a year ago but have yet to receive a penny of the $216,304 profit.
A Columbus title company sent the money the couple should have received to a hacker instead, the result of what experts call an all-toocommon email scam.
“We were told, ‘You’ll get paid; you’ll get paid.’ And here we sit, more than a year later,” Margaret Frederick said. “Everybody got paid except us.”
The scam has scarred the relaxing retirement the Fredericks expected when they sold their home for $650,000 in August 2016. William, a former insurance company employee, was 83; Margaret, who had retired from a bank, was 75.
Immediately after the closing, Service Title Agency paid the mortgage holder, taxing bodies, real- estate agents and itself, and then thought it wired the balance to the Fredericks, who were in the midst of moving to Las Vegas.
Days passed, and the couple saw no sign of the money in their bank account.
When the money hadn’t arrived after a week, they realized they had a problem.
The Fredericks’ experience is “very typical” of scams that divert an estimated $ 400 million a year from title companies into bogus accounts, said Tony Franco, chief executive officer of SafeChain, a Franklinton startup designed in part to prevent such problems.
“We hear this story fairly frequently.”
How $ 216,304 disappears
In February, the Fredericks, seeking to recoup their money, sued Service Title Agency, both real- estate firms and the buyers. Seven months later, the couple still haven’t received the payment, but they have a clearer idea about what happened to their money.
A few weeks before they closed on the home sale, a Chase bank account was opened in Houston, purportedly by a Liberian man named Titus Gartee Benson. Federal prosecutors in Texas say the man was really Rasheed Akinsanya, a Nigerian living illegally in the United States.
In their case against Akinsanya, the prosecutors accuse him of a variety of scams — including “romance schemes.” They also say he trolled financial company email exchanges
looking for easy prey.
According to emails included in the Fredericks’ lawsuit, on Aug. 17, 2016, the realestate agent who worked for the Fredericks’ homebuyers received an email — from an address almost identical to the couple’s ( with three “L’s” in “Bill” instead of two) — asking how to get the money from the sale. The agent forwarded the email to Service Title in Columbus.
“I request to contact you regarding the proceeds,” the email said, “should i send the instructions over?”
Despite the broken English and the incorrect email address, the title company responded, asking for details on how to wire him the money, according to the suit. After those directions were sent, the title company deposited the Fredericks’ $ 216,304 into Titus Gartee Benson’s Chase account.
When Chase put a hold on the money for a few days, the hacker asked the title company to expedite the release of the funds. It agreed to try, according to court filings.
The Fredericks and their attorney, Courtney Hanna, say Service Title was negligent on several fronts. They say the company should have:
■ Used secure email to exchange account information.
■ Noticed the incorrect email address and broken English.
■ Verified the bank account information.
“The account was in Texas, and my clients were in Ohio,” said Hanna, with the Columbus law firm Joseph & Joseph. “But the biggest thing is the name ( Titus Gartee Benson) that had nothing to do with my clients. That should have Ledbetter
been the biggest red flag.”
How the victims cope
Fortunately for the Fredericks, they didn’t lose the whole $650,000 that the buyers paid for their home. Before the sale, they had borrowed from their home’s equity to buy their Las Vegas condo to share with their daughter, Kathryn Ledbetter, who had helped purchase the home. (She and her family of six shared the Galena home with her parents.)
But the couple planned to live off the sale proceeds. They say they’ve had to pull money from their retirement account, which, in turn, has cost them in taxes. In addition, the couple estimates that they have spent about $ 30,000 on legal fees.
The Fredericks also had to loan money to their daughter, who was due to get $ 125,000 from the sale of the Galena home.
Ledbetter said she expected to use the proceeds as a down payment on a new home that she and her husband were planning to build in South Carolina, but have now delayed the construction.
“We’ve been living in a rental home for more than a year,” she said. “We really have no idea whether we’re going to get the money. ... It’s just been a nightmare.”
How the cases proceed
SafeChain’s Franco says scammers who target title agencies are rarely successful and are relatively easy to combat.
“Title companies, through proper processes, can often nip out some wire scamming,” said Franco, whose company offers a service, called SafeWire, that helps verify bank accounts.
Still, enough get taken for those losses to exceed $400 million a year.
Service Title President Sharon Adams and the company’s attorney, Amelia Bower, declined to comment for this story, citing the ongoing court case.
In its court response, Service Title acknowledges that the money was transferred to the Benson account, but
challenges some specifics, such as the source of some emails attributed to Service Title. The company also argues that the hacker came through the Fredericks’ or their real-estate agent’s email, not Service Title’s email.
Service Title argues that blame primarily lies with the RE/MAX and Coldwell Banker King Thompson agents who represented the buyers and sellers because their email exchanges made the fraud possible.
Finally, Service Title argues that it was a victim of a crime just as the Fredericks were.
In their responses, RE/ MAX argues that Service Title’s negligence is to blame while Coldwell suggests that the Fredericks were responsible, an argument Hanna called “nonsense.”
On March 2, while the Fredericks were pursuing their court claim, the U.S. attorney in Houston indicted Akinsanya and another man on multiple counts of wire fraud.
Prosecutors accuse Akinsanya of fraudulently pulling in more than $1.1 million through at least three bank accounts set up in false names, including Titus Gartee Benson’s. Among the deposits to that account was $216,304 on Aug. 22, 2016, from Service Title Agency.
Suzanne Elmilady, the U.S. attorney handling the case, declined to say how much of the $1.1 million is left but added, “We make every effort to recover as much as we can.”
Akinsanya is scheduled to go to trial Nov. 27.
The Fredericks, who also filed a complaint with the Ohio Department of Insurance against Service Title Agency, are awaiting a June trial.
“It’s tragic,” said Hanna, their attorney.
“You’ve got these people who worked hard and are just supposed to be enjoying their life now in Nevada, but instead they’re stressed on a daily basis, wondering, are they going to get these funds?”