Nigerian scammers have taken Internet scams to a new high (or low): selling your house, without your knowledge, and having the proceeds go to them. All done remotely, primarily via the Internet, with a little fax and phone thrown in. Of course, now that Nigerian scammers have pulled this off successfully (yes, successfully – just ask Roger Mildenhall about the Perth, Australia house that used to be his), we’re sure that other scammers around the world will be trying it.
A native of Australia, Mindenhall was living in South Africa, and was maintaining two rental income properties back in Australia. A neighbor contacted him to advise him that one of his properties had just been sold, and the second was already on the block.
Mildenhall hightailed it back to Australia just in time to stop the sale of the second property, but the first was already signed, sealed, and delivered. But not to him.
Authorities posit that the scammers orginally hacked into Mildenhall’s email account, and with that foot in the door, got enough information to counterfeit the necessary documents to sell the house, and have the proceeds deposited in an overseas bank account. In this particular instance, a source familiar with the case says that in the email account there were communicationis with Mildenhall’s property manager, making it even easier for the scammers to pull off this scam, but it would be trivial to find that information even without it having been delivered on a silver plate.
According to Brian Greig, a spokesperson for the Real Estate Institute of Western Australia (REIWA), the entire series of transactions occurred without there ever being personal contact with the owner (obviously), adding that “Agents report an increasing trend that more and more transactions are done without face-to-face interaction, particularly with overseas and interstate buyers.”
In other words, this is a natural and fertile ground for scammers.
Says Grieg, “Until Friday, there were enough checks and balances to mitigate fraud…. It is clear it was a sophisticated outfit that scammed the owner, the real estate agent, the settlement agent, the banks, and more importantly and critically, the Department of Land Administration (DOLA).”
Australia’s Consumer Protection Commissioner, Anne Driscoll, assures that “The matter is being fully investigated. It is important that every phase of the sale and transfer process that was undertaken in this instance is reviewed, to ascertain what went wrong. This no doubt will give some clarity about what should or could have been done to prevent it,” adding that “Separate to this issue, work is being done to develop standards for proposed electronic conveyancing systems. A key area of work is to establish a robust Client Identify Verification Standard.”
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Says Arnold, “It is increasingly going online and you have investors who own properties from abroad and they own properties [locally] and you are reliant on email.”
Grieg points out that the real estate agent involved did follow all expected procedures, meaning that the scammers..well, scammed the system. “They had a comprehensive understanding of how transactions take place and of the legal processes … If they are sophisticated as they seem to be, identity checks will not be enough – they can forge them,” observed Grieg.
In this case, however, even though the authorities and the realtor agencies are scrambling to label the scam “sophisticated”, some closer to the facts are saying that it was anything but, and that a little vigilence would have quickly defrocked the scam for what it was.
According to Detective Senior Sergeant Don Heise, the emails that authorized the sale of the properties came from Lagos, Nigeria, and were poorly written, and should on their own have raised eyebrows.
“On most occasions, the emails show poor English. That’s a very solid point that people should look out for when dealing with sales from overseas.”
He adds that “This happened over a period of time between the suspect and the real estate agent and settlement agent in Perth here which has allowed the sale of the house to progress through the forwarding from that country a number of documents that assisted in that sale.”
And the person arguably closest to this scam, Mildenhall himself, says that he is “shocked” that the agents ever accepted the signatures.
“The forged signature was so infantile that it could’ve been done by a five year-old,” says Mildenhall. “The writing was in lower case and was not joined up writing at all. Nothing at all like my signature which she has on file and also the settlement agent has on file.”
Still, we are likely to see this again, and next time the signatures may be more realistic (or, like Mildenhall’s unfortunate situation, maybe it won’t matter even if it is “infantile” scrawl). The best thing you can do to protect yourself in this situation is to let your realtor or property manager know that they should never sell off one of your properties without first seeing you face-to-face or, at the very least, having a phone conversation in which they can confirm that it is you, and your instructions.