Monday, December 14, 2015

Recent Elderly Victim Who Had Vacant Harlem Brownstone Sold Out From Underneath Her Recovers Title, Victimized Unwitting Buyer Gets Repaid, Alleged Scam Organizer Awaits Trial While Three Others Cop Guilty Pleas, Title Insurer Left Holding The Bag; Officials Say Ease Of Access To Property Records Online Make Title Hijacking Rackets A Cyberthreat

In New York City, The Wall Street Journal reports:
  • The clues were there for months, but property investor Sybil Patrick didn’t put them together. The locks to a vacant Harlem brownstone she owns were changed. Belongings weren’t in the same place she left them.

    Then one day last spring, Ms. Patrick, a 79-year-old former nurse, showed up to tend the front yard. The superintendent next door asked why she was visiting a house she had already sold.

    “I told you I was never, ever going to sell,” she recalled saying.

    But it turned out the superintendent was correct: The house had been sold, without her knowledge, about a year earlier for roughly $750,000.

    The case was one of about 30 related incidents in Manhattan in which a group of people allegedly forged or attempted to forge new deeds using easily available online records, to sell the homes and collect the proceeds, according to officials at the Manhattan district attorney’s office. Since last fall, New York prosecutors have arrested four people on grand larceny charges connected to the sale of Ms. Patrick’s house, according to the district attorney’s office.

    Prosecutors in Chicago and Detroit also said they have seen a spike in a category of crime known as deed fraud.

    Investors who own several properties are especially vulnerable, prosecutors said, as they are less likely to notice if someone moves into a home they don’t visit regularly. Ms. Patrick owns the Harlem brownstone in addition to her primary residence.

    “This crime has always happened, but it’s been made much more prolific” by having records online, said Executive Assistant District Attorney David Szuchman, chief of the investigation division in the office of Manhattan District Attorney Cyrus Vance Jr.

    The rise in such crimes is an unintended consequence of an effort to put documents on the Internet to promote transparency in local real-estate markets.

    It had a noble purpose and was a good idea, but in fact has become one-stop shopping for fraud,” said Mr. Szuchman, dubbing the problem an “epidemic” in Manhattan.

    A hot property market in some cities is making the crime easier as well. Swindlers often price homes just below market values, putting pressure on buyers to snap them up as quickly as possible, preferably with all cash, prosecutors said. Ms. Patrick’s house, for example, is valued at more than $1 million, prosecutors said, based on an appraisal they commissioned.

    In New York City, it is possible to view online copies of deeds, mortgages and other documents, which often include owners’ signatures, primary addresses, emails and phone numbers, lawyers’ names, the amount of the mortgage and whether there are liens on the property. Such information makes it easier to obtain additional details, such as birth dates and Social Security numbers.

    The swindlers then use that information to impersonate the owner and create a new, fake deed transferring the property to the new owners.

    The New York City Department of Finance, which started tracking such crimes about a year ago, said it is currently investigating 120 cases. To combat the problem, the agency this summer began notifying property owners automatically whenever a new deed is recorded for their property.

    Despite the potential for deed fraud, some lawmakers and regulators continue to support the push for online records, which have made buying and selling properties significantly easier. Deeds are available online in a number of U.S. counties.

    “It impedes the process of the transfer of real estate” not to have property records readily available, said Annette Hill, assistant commissioner at the New York City Department of Finance. “It’s always been public information. It’s just now across the country it’s available online.”

    Chicago officials said they have seen an uptick in cases in recent years as more records are available online. The Cook County recorder of deeds currently has 62 open investigations of suspected fraud, a spokesman said.

    In Detroit, the Wayne County prosecutor’s office said it has seen more complaints about deed fraud this year than in any other since it started tracking them five years ago. Local officials said many European and Asian investors have been buying properties in a bet on the city’s renaissance, making them easy targets for fraud.

    Kanwarjeet Malik, the alleged organizer of the fraudulent sale of Ms. Patrick’s house, was arrested and charged with grand larceny. He was arraigned in mid-November in New York State Supreme Court and pleaded not guilty. A lawyer for Mr. Malik declined to comment.

    Mr. Malik allegedly operated behind the scenes while several people he worked with either impersonated or found people to impersonate property owners and real-estate brokers, furnishing them with false photo IDs. Some of those people were charged. In some cases, the closings were also attended by legitimate lawyers and brokers who were unaware of the fraud.

    Mr. Malik’s co-defendants— Christopher Cable, Kajetan Belza and Carrie Stevens—pleaded guilty before trial and are expected to serve prison time.

    A lawyer for Ms. Stevens said she received the minimum sentence, one to three years, and is “paying her debt to society.” Lawyers for Messrs. Cable and Belza declined to comment.

    Ms. Patrick had left the house empty for years, at one point hoping to turn it into a home for unwed mothers. She now has it back, and the buyers were able to settle with their title insurance company to get repaid. Competing owners often have to fight over rightful ownership in civil court, prosecutors say.

    After the stress of the past couple of years, Ms. Patrick now rarely visits the house, which she bought for $110,000 in 1989. She is starting to think that keeping it might be too much trouble. “I don’t know if it’s still even worth it,” she said.
Source: Latest Cyberthreat: Stealing Your House (Deed fraud, helped by proliferation of online records, is reaching ‘epidemic’ levels in Manhattan and becoming more common elsewhere in the U.S.).

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