House closing scheme takes Wisconsinites for millions

The thieves hack into business emails.
Posted at 10:24 PM, Apr 10, 2018
and last updated 2018-04-11 16:40:17-04

A Wisconsin couple wired a big sum of money so they could close on a house, but their money never made it.  Instead, it ended up in a criminal's bank account.  As the I-Team discovered, these thieves are watching your every move.

They hack into business emails and then patiently wait to strike.  In some cases, you don't know if you are talking to your contact in a company or the hacker.

"It was just taken away from us in a heartbeat," a Wisconsin homeowner told us.  

He's one of the victims in a scheme racking up big losses across the country.  

"We ended up transferring just over $100,000."  It was a wire transfer; one of the last steps to close on a new house.  "We had worked so hard to get this property we wanted. Worked so hard to save up this money," he said.

The Milwaukee area man agreed to talk to us if we didn't identify him.  He said these thieves move fast and the bogus emails they send are hard to detect.  

"Upon first glance it looked like a normal email that I'd been receiving for the last month."  The email appeared to be from his loan rep. No one knew it had been hacked. 

And that's how the Business Email Compromise scheme works.  Thieves target areas where large amounts of money are changing hands.  

Right now their focus is real estate.  These people hack into a title company's or lender's email account and monitor transactions.  They're waiting for an "in" with a buyer or seller.  When an email with wire transfer instructions is sent to a consumer, the thieves intercept it and replace it with their own email.

Lisa Petersen is the in-house attorney for Chicago Title and said the changes made to email addresses are very subtle.  

"They might change a hyphen to an underscore so that when the eye reads it, you read it quickly, you think you're looking at the right email," Petersen said.

As she explained, once you click on the link sent by the hackers your money goes to a holding account in a U.S. bank.  Then it's quickly transferred overseas.

"Most of the victims get some money back but not all," Petersen said.

According to the latest FBI numbers, the BEC scheme is top of the list when it comes to internet crimes in the U.S. and Wisconsin.  These thieves have taken Wisconsinites for more than $2.5 million. 

"They prey on human error, they prey on us being busy and in a hurry and doing lots of closings and lots of transactions," Petersen said.  "That's when it's easier for them to step in."

Members of the Wisconsin Land Title Association, like Lisa, and the Wisconsin Realtors Association are working to make sure everyone involved in the buying or selling of a home is on high alert, but Petersen feels there's still a gap when it comes to educating consumers.

"We were within hours of it completely being gone," the Wisconsin homeowner told us.  

He was able to stop his $105,000 from being transferred overseas.  

"It was frozen, and it was being prevented from being taken out."  

It took three months to get the money back.  Next time around, he says he'll be more diligent.

"Follow up at every single checkpoint, every turning point of the procedure. I failed to do that," he said.

You have very little time if this happens to get your money back.  Contact your bank right away, sometimes it can stop the funds from leaving your account. Also, reach out to the FBI.  

Some advice so you can avoid this situation altogether.  Go old school and make a call.  Or meet face to face.  Find a point person in the company that's handling the money in your real estate transaction.  If you are doing a wire transfer always confirm, by phone first. That link is legit.  And follow up to make sure the money made it to the right place.

Contact the FBI Milwaukee at (414) 276-4684 to report any signs of a scam.