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Category Archive: ‘Fraud’

International Money Laundering


Agents aren’t known for asking a lot of questions – from

The numbers are staggering: Annually, $1 trillion is stolen by corrupt officials from countries around the globe.

That money needs to be spent, or laundered, and much of it goes into big, anonymous real estate deals in the United Kingdom, which is seeing $1.5 billion in unrecorded capital inflows per month.

The main source of that money? Russia.

From Russia with Cash, a new documentary that aired at the Newseum in Washington, D.C., on December 15, focuses squarely on the phenomenon. It examines up close British real estate agents’ willingness to overlook a deal’s potential illegality in the hopes of a big commission.

Wearing hidden cameras, Russian government minister “Boris” and his blond girlfriend “Nastya” tour five palatial apartments in central London, accompanied each time by a different real estate agent.

The movie captures the interactions. We watch Boris buttonhole each realtor to confide that he is a government minister with a “very small salary,” adding, “Needless to say, the money for this flat comes straight out of the Russian budget.” He explains that his name cannot be connected to the property in any way.

Despite having just heard that their client is a crook, the agents invariably continue the deal. Several refer him to a lawyer; one says, “You shouldn’t be telling me anything about any of these things,” but doesn’t cut the conversation short.

In the United States, that behavior is fine: real estate agents in the United States aren’t obligated to report on clients whose legality is in question. But in the United Kingdom, an agent who thinks a potential client might be laundering money illegally is required by law to file a Suspicious Activity Report (SAR) with the country’s National Crime Agency.

In the film, the agent showing the ritziest apartment—an ornate, five-bedroom flat selling for £15.8 million (and potentially fetching a £315,000 commission for the agent)—does seem to have second thoughts after Boris’s speech; there’s a moment where it looks like he might turn the Russian down. But then he says, “No one will find your name on this,” and proceeds to explain how that can work.

None of the deals go far beyond the initial conversation, but the film is a powerful, if repetitive, illustration of how corruption flourishes. Corrupt officials from around the world need safe places to park their money, and real estate deals are currently the vehicle of choice—as long as the bureaucrats’ and oligarchs’ names can’t be traced to the purchases.

Read full article here:

Posted by on Dec 21, 2015 in Fraud, Jim's Take on the Market | 3 comments

‘The Big Short’

The long-time readers of this blog remember back when the financial crisis was imploding, and how we followed the ensuing mortgage-industry collapse.  People from Jim Grant to the FHFA were gathering on-the-street intel from this blog, and we had an audience on Wall Street.

Michael Lewis worked at Solomon Brothers during that time, and he wrote the book called, ‘The Big Short’.  The movie version comes out next month.

Here is the trailer:

Posted by on Nov 24, 2015 in Fraud, Jim's Take on the Market, Mortgage News | 2 comments

Realtor MLS Fraud & Extortion


Thanks to Susie for sending in this story of everyday realtor fraud – committed by the third-highest-producing agent team in the country – and an agent who just couldn’t be a do-gooder and turn them in.  He tried to extort $800,000 from them instead:

An excerpt:

As well as being outspoken, Tomlinson had earned a reputation as a whiz with an online database known as the Multiple Listing Service, which can only be accessed by brokers and Realtors, and supplies the data for web services such as

He alleged that when the Jills couldn’t sell a home, they would sometimes hide it from other users of the MLS. That could mean, for example, changing the address of a mansion on North Bay Road so that it would appear to be located in Allapattah, where few high-end brokers would think to look.

To the untrained eye, it looked as if the Jills were better at selling homes than their actual record suggested. And even more important: the scheme prevented other brokers from offering their services to clients whose listing were expiring on the database. Realtors only have exclusive rights to sell a home for as long as their contract with the owner lasts. Once the listing expires, the home is fair game for competitors.

In his complaint to the board, Tomlinson cited 51 instances where the Jills had hidden homes.

Esther Percal, a top broker at EWM Realty International with nearly four decades of experience, blasted the Jills’ conduct.

“The Jills broke the rules. They have a near monopoly on the top of the market because they’ve branded themselves so well,” Percal said. “They say they’re the best and they can bring the best prices, but they don’t have a magic wand. Their listings can expire like everybody else.”

In a response to Tomlinson’s complaint — now evidence in the criminal case — the duo admitted using “poor judgment,” but said they never realized “the consequences” of the data jiggering. And they denied their conduct actually broke Realtor association rules.

About five years ago, the Jills explained, they got a call from an “irate client” whose property had not sold. The client had gotten “a barrage of unsolicited calls” from other Realtors looking to snag business as his listing had just expired.

The Jills said that a staffer — unnamed in the document — overheard the call and “indicated that, in the future, a client’s property could be kept off a list known as the ‘Hot Sheet,’ ” which Realtors scoured for new business. From then on, the Jills acknowledged, they would “from time to time” keep other unsold properties off the collection of the expired listings, according to the response.

Read full article here:

Posted by on Nov 3, 2015 in Fraud, Jim's Take on the Market, Listing Agent Practices, Realtor, Scams | 0 comments

Squatter with Papers

Hat tip to daytrip for sending this in from the


When police responded to reports of a squatter at a San Francisco mansion over the weekend, they didn’t expect to catch an alleged art thief believed to have stolen and sold paintings valued at more than $300,000.

While squatting in the home, Jeremiah Kaylor, 39, took 11 paintings from the walls and sold them through social media and pawn shops, said Officer Carlos Manfredi, a spokesman for the San Francisco Police Department. Nine of the 11 paintings have been recovered.

Kaylor was charged with trespassing and 10 counts of burglary, Manfredi said.

The initial call about a possible squatter at the home on the 3800 block of Washington Street came Saturday just before 11 p.m. When police made contact with Kaylor, he produced documents allegedly showing he was going to be the proprietary owner of the home, police said.

“This individual produced some type of paperwork that looked like it was official, saying he had a right to stay there,” Manfredi said. “It is a little sophisticated … not typical for squatters to do.”

When police were unable to reach the homeowner and sales agent, they left. But the next day, the sales agent called police and said no one should be inside.

Kaylor may have been squatting there for as long as two months, Manfredi said.

Posted by on Oct 20, 2015 in Fraud, Scams | 0 comments

Latest Real Estate Scam

A sophisticated scam by fraudsters hacking into realtor accounts:

There’s a consumer alert about an apparent scam targeting families in Rhode Island after a local couple lost $13,000.

Experts say this scheme is very sophisticated, and anyone who’s in the market for a new home needs to be on alert.

It’s a simple idea: pose as a real estate agent online and target home buyers. But in reality, it is anything but simple.

“The goal is to hack into the real estate agent’s email account,” said Connor Dowd, a broker with Keller Williams Realty of Newport. “Once they’re in, they try to learn about any real estate transactions that are currently going.”

News, Weather and Classifieds for Southern New England

Posted by on Oct 5, 2015 in Fraud, Jim's Take on the Market, Scams | 2 comments

Inventory Watch – Relists

There have been 116 new listings of NSDCC houses this year. As expected, 61 of those were on the market last year (53%), and that’s not counting the sellers who listed with a different company.

Why are listing agents allowed to intentionally deceive the consumer? You’ll have to ask the district attorney about that one, because there is nobody within the industry that is doing anything to stop it. Get Good Help!!

Click on the link below for the complete NSDCC active-inventory data:

Read More

Posted by on Jan 12, 2015 in Fraud, Inventory, Jim's Take on the Market | 1 comment

Potentially Distasteful?


Because California has been exempted by the IRS from their debt-tax on short sales, we should still see more of them in the coming months and years.  They tend to be shady – here’s how a case in Nevada turned out:

An excerpt:

Harcourts was one of the Northern Nevada companies identified by a Reno Gazette-Journal investigation last year for engaging in quick-listed, dual agency short sales. The deals allow the same agents or firms to earn multiple commissions on the same property by representing both the buyer and the seller — at times “triple dipping” and earning a third or even fourth commission by being involved in the property’s resale as well.

The practice also allows a pre-arranged buyer or investor to purchase the property far below fair value by blocking other offers for the property, which go pending with an approved offer the moment they are listed on the market. This allows an investor to resell the property just a few weeks or months later at huge profit, with some examples posting more than $100,000 in appreciation during the resale.

“What we pursued was gross negligence based on fiduciary duty … to represent the interests of all parties involved,” said Jonathan “JD” Decker, Nevada Real Estate Division administrator. “In this case, all parties include the seller, buyer and the mortgage lender.”

According to the defense, the primary interest of the seller is to sell a property quickly to avoid a harder hit on their credit rating from foreclosure. Since the seller is losing the property, it does not matter if the house is sold at a lower price to a prearranged buyer. By failing to get the best offer, however, Decker’s team said that the deals did not fairly serve the interests of the mortgage lender.

During the hearing on Wednesday, the defense countered that courts have ruled that the lender and homeowner are adversarial so the broker cannot represent both their interests. Instead, banks need to do their own due diligence to ensure a distressed property is being sold for the best price possible.

“You could call what was going on potentially distasteful,” Decker said. “But (the commission decided) that it did not come down to being illegal or in violation of statute.”

Posted by on Jan 8, 2015 in Fraud, Short Sales, Short Selling | 1 comment

Corruption, Lies, and Deceit

Chase Witness

Every American should read this article that exposes the cozy relationship between big banks and government – thanks daytrip for sending!

An excerpt:

One mortgage in particular that sticks out in Fleischmann’s mind involved a manicurist who claimed to have an annual income of $117,000.  Fleischmann figured that even working seven days a week, this woman would have needed to work 488 days a year to make that much. “And that’s with no overhead,” Fleischmann says.  “It wasn’t possible.”

Posted by on Nov 9, 2014 in Fraud, Mortgage Lawsuits | 3 comments