Potential Fraud Scam in Southwestern Michigan

The following is a warning message that I received from my Michigan MLS Board of Realtors. I thought that I would pass this on to you as well, in case you run into this scam.

The Association was recently made aware of a failed fraud scam that happened in Southwestern Michigan over the past 45 days. The scam started with a purported Doctor from the United Kingdom contacting a local Brokerage about his desire to purchase a home in a private lake front community that he had seen on the internet. Because of the situation with a foreign buyer who was not going to be present for the closing the Brokerage assisted the Buyer with finding them legal representation. A Buy and Sell Agreement was negotiated and then finally signed after the Attorney had received an official check drawn on a U.S. bank from the Buyer through a private courier service for over $600,000. The check was deposited in the a trust account established specifically for the transaction by the attorney and the items needed to completed for a closing were scheduled to be accomplished. At this time everything seemed normal to the attorney and Broker, until a few days after depositing the check, the attorney and Broker both received calls from the Buyer demanding they wire half of the deposited money to a Chinese Bank account so the Buyer could take care of other financial obligations. When asked how he was going to pay the balance on the house he said he has now decided to be at the closing and will bring the additional funds to close the transaction at that time. This demand for the wire of half of the funds deposited for the transaction sent up warning flags and the attorney checked with the FBI and lender regarding the situation. The local bank’s fraud unit got involved and determined that the check presented and going through the banking system was fraudulent. Needless to say the sale of the home failed and the potential fraud was stopped.

Due to the different schemes and scams being used throughout the world today, all Members should use their best judgment and be prudent in evaluating the information being provided by the potential Buyer prior to negotiating the Buy and Sell Agreement.