Terry Beck
03-07-2011, 09:47 PM
Don’t know if this is going on in other areas, but we have encountered this twice. Appears to be a money laundering scheme from somewhere in Asia (Hong Kong or China). Also don’t have enough details to be authoritative. A buyer contacts Realtors via email with offer to purchase a house, usually new or almost new, and in a moderately high price range. Part of the tip-off is that it is a full price offer (unusual for buyers these days). The buyer offers no mailing address or phone number (or if there is a phone, it is not answered). Primary means of contact is via email only.
A substantial amount of money is actually deposited as escrow funds in a local title company, sometimes with the name of a lawyer in Canada to act as secondary agent. The money may not be enough for the entire purchase, but is substantially larger than required for earnest money and down (maybe up to half the purchase price).
The scam is that before the sale goes to closing, the offer is canceled by the buyer, with demand for return of funds, or to transfer funds to a lawyer in Canada. Normally a buy/sell contract does have a provision for the seller to keep any earnest money, but typically these deals are for properties that are foreclosed, or the agents don’t enforce the return of earnest money. Either way, that money from the Far East is sent to the US, and then returned or forwarded, essentially cleaning or laundering the original funds.
Point of this is to warn you that any home inspections where the realtor can only offer an email address for initial contact should obviously be suspicious. Both of the deals we were called to do home inspection were picked up by the FBI for fraud investigation.
A substantial amount of money is actually deposited as escrow funds in a local title company, sometimes with the name of a lawyer in Canada to act as secondary agent. The money may not be enough for the entire purchase, but is substantially larger than required for earnest money and down (maybe up to half the purchase price).
The scam is that before the sale goes to closing, the offer is canceled by the buyer, with demand for return of funds, or to transfer funds to a lawyer in Canada. Normally a buy/sell contract does have a provision for the seller to keep any earnest money, but typically these deals are for properties that are foreclosed, or the agents don’t enforce the return of earnest money. Either way, that money from the Far East is sent to the US, and then returned or forwarded, essentially cleaning or laundering the original funds.
Point of this is to warn you that any home inspections where the realtor can only offer an email address for initial contact should obviously be suspicious. Both of the deals we were called to do home inspection were picked up by the FBI for fraud investigation.