In these variations, scamsters use the ruse of a phony real estate conveyance or a fake mortgage.
Here are the descriptions of the scams as initially reported:
Phony real estate conveyance
A residential property is for sale by the registered owner and a realtor is involved. A Canadian lawyer is contacted by telephone to act for a purchaser from outside of Canada. The lawyer meets in person with an individual acting on the purchaser’s behalf (e.g. a relative with a power of attorney), and receives a certified cheque for the purchase amount. The lawyer deposits the cheque into trust. The relative advises the lawyer that the purchaser has passed away and the relative requests that lawyer to quickly return the funds (e.g. by wire transfer). The lawyer transfers the funds to the relative before learning that the certified cheque is fraudulent.
Attention real estate practitioners: A variation on the bad cheque scam (Notice to the Profession, December 15, 2008)
LawPro has warned Ontario about yet another sophisticated counterfeit bank draft scam. This one targets real estate lawyers acting in mortgage transactions. The scenario may include the fraudster using the identity of a major national financial institution as the lender and pretending to be the real property owner. Meanwhile, the actual property owner is completely unaware of what’s happening.
The scam works similar to this: A new and previously unknown client or a lender’s representative allegedly from a major bank asks you to act on mortgage transaction in the $640,000 to $685,000 range. Shortly thereafter, you receive mortgage instructions (fake), and a legitimate looking bank draft (fake) drawn on a major bank. There is no other mortgage on title. The “borrower” is in a rush to complete the deal and get the mortgage funds.
Fraudsters falsifying ID of major banks in counterfeit bank drafts mortgage deals (Notice to the Profession, June 19, 2009)
Twists and developments
Since first reported, we have seen new twists to the phony real estate conveyance or fake mortgage and other ruses as fraudsters try to trick lawyers. Because the details of any particular ruse or scam may change and any variation in one may be used in another, lawyers will want to be familiar with all of these twists and developments, including those that relate specifically to the real estate context:
Phony real estate conveyance
Bad cheque scam – real estate purchase by Kin Hang Cheung (Notice to the Profession, June 1, 2012)
Craigslist – scamsters preying on legitimate sellers (Practice Watch, Benchers' Bulletin, 2009 No. 3 Fall)
Attention real estate practitioners: Fake law firm website used in new variation of bad cheque scam (Notice to the Profession, May 2, 2011)
On-line mortgage referral program (Practice Watch, Benchers' Bulletin, 2009 No. 4 Winter)
For a complete list of publications relating to the phony real estate conveyance or fake mortgage ruses, see Bad cheque scam publications.
Learn more about how to protect yourself from the bad cheque scam.