A major police raid in India has broken up a scam operation involving dozens of fake IRS agents, but don’t let your guard down just yet. IRS imposters are still out there along with scammers that like to prey on the real estate industry.
Earlier this month, police in India raided nine call centers in Mumbai that were allegedly used by phony IRS agents. 70 people were arrested and hundreds more are under investigation.
It’s a scam that’s gone on for years. The IRS says it’s difficult to deal with because many of the calls come from outside the U.S. But, the crackdown appears to have greatly reduced the problem.
The scammers like to target older Americans and retirees. They tell their victims that they owe back taxes and threaten them with jail time, deportation, and or penalties if they don’t pay up immediately.
They often set up threatening robo-calls as well, to scare victims into paying. Victims are told to settle their debts by wiring money, paying with money orders, or by sending high value gift cards.
The Wall Street Journal Reports that an IRS watchdog group has received almost 2 million complaints about IRS imposters in the last three years. This group claims that 8,800 people were tricked, and they ended up more than $47 million dollars to these scammers.
The Better Business Bureau says it has seen a dramatic 95% drop in complaints since the arrests in India. Although there’s been progress, there are still complaints.
But fake IRS agents aren’t the only ones to watch out for, especially if you are in the market to buy or rent property.
The Federal Trade Commission recently issued a nationwide alert about an email and money wiring scam. Money that’s supposed to be wired to the seller at closing ends up going into the land of the hacker.
A Colorado property owner lost almost $83,000 earlier this year to this kind of scam. Court documents say the seller arranged to have the money wired into her personal account on the day of the sale. But her agent received an email that looked like it was from her saying to wire the money to a different account.
The agent thought the email was authentic so the money was wired to a different account. By the time the title company realized what happened, the scammer transferred the money to other accounts and was gone. And this is happening all over the country.
Both the FTC and the National Association of Realtors issued a set of recommendations to fight back against scammers. Among them, make sure you make a phone call to verify an account before you wire any money. Also, don’t click on email links. It’s better to go directly to a website. And be cautious about opening email attachments.
And there are tons of real estate-related scams to beware of. A quick Google search listed several including a foreclosure website out of Santa Barbara that took $200 membership fees for listings that were out-of-date or inaccurate.
The Santa Barbara Independent reports that when customers tried to get their money back, they are told to send a written request with five letters from property owners that prove the listings were wrong, and then wait 90 days. Many of those customers say they never got a refund.
The Independent reports the man allegedly behind the website is former Ataris bass player Mike Davenport and his business partner Susan Quinn. It says they are being investigated for operating several other online real estate scams as well.
Also out of Southern California — a fraudulent investment scam and a plea deal. The Prosecutors say a Mission Viejo man swindled more than $2,000,000 from investors.
According to the Mission Viejo Patch, 39-year-old Francisco “Frank” Hobson told people he would use the money to buy investment properties but ended up spending the money on himself. Those expenditures included travel, laser hair removal, and plastic surgery. And, it says, he also used it to partially fund Ponzi-style payments to other investors.
The Patch writes that Hobson was a licensed real estate agent at the time of the bogus transactions. And, that he would send his victims purchase agreements for properties that were not really for sale or didn’t actually exist.
Prosecutors are charging Hopson with wire fraud. He could get up to 20 years in prison. He also agreed to pay back most of the money.
A Petaluma real estate agent has been accused of a home mortgage scam in the Bay Area. The Press Democrat reports that 44-year-old Miguel Lopez-Soleta recently pleaded no contest to felony grand theft and embezzlement in this scam.
The paper says he charged clients $2,000 to restructure their loans and reduce their mortgage payments. But, hundreds say they he didn’t do anything. Some lost their homes, including some elderly clients.
Lopez-Soleta will get up to a year in jail when he’s sentenced in December. He’ll also be forced to pay restitution and serve five years probation.
That’s just a small sampling of scams related to real estate. There’s actually a website called http://californiarealestatefraud.com with all the latest stories on real estate fraud in California.
And don’t forget about rental scams, especially those on Craigslist! A Fox TV station in Nashville is reporting on a currently active scam there. It’s a hot real estate market in Nashville with many homes on sale. Scammers are trying to cash in by listing homes for sale as rentals.
Many of them simply lift photos and descriptions straight from the MLS and incorporate them into their bogus rental listings. They make off with rental payments and deposits and leave a surprised homeowner with a full house of tenants.
The advice to buyers and renters is to always do your due diligence. Meet with the owner or realtor in person, don’t click on email links, avoid suspicious websites, verify accounts before you wire money, and make sure your investment partners are legitimate. And remember, the IRS will “never” call you about your back taxes.
And when it comes to real estate transactions, always send your funds to a legitimate title & escrow company – never to the seller directly. If investing in a group fund, syndication, fund or “pool,” make sure you receive a Private Placement Memorandum and an Operating Agreement from a registered company (LLC or LP).