How does this scam work.
October 14, 2021 11:33 PM   Subscribe

I know this cannot be on the level. How can I explain it to the person involved?

A real estate agent shows a new client a few properties. Buyer says he wants to write cash offers on three properties. Verbal offers are accepted with written offers to follow. The buyer does not speak, but travels with a personal assistant, who speaks for him. The two of them communicate by text.

Young agent is looking forward to a very large commission, as the properties are three to four times the average home price for the area. Client makes note that the agent is driving an older vehicle and jokes that he should buy him a better one to show such nice properties. Later , agent gets a call from the buyer that he, the buyer, is at a local dealership and wants to buy the agent a vehicle. Excited agent meets him there and picks out a high end car. They take all the information needed to properly title the car for the lucky young agent. Car dealer is satisfied that funds are available. Car salesman is happy, real estate agent is happy. Car will be ready for pickup in a few days.

Agent communicates that proof of funds will be required to present with the real estate offers. Buyer says "no problem" and offers a copy of a credit union statement. Brokerage for whom the agent works calls the credit union to verify, and it all looks good. Listing agent for one of the properties is suspicious, and looks up the buyer's name and finds that he has recently served time for fraud, and calls the buyer's parole officer. I am almost certain that this real estate deal is not going to close, but the young agent is still excited about that car. What is going on here? what kind of scam is this?
posted by woman to Work & Money (22 answers total) 13 users marked this as a favorite
 
This scenario ticks a lot of the boxes for money laundering.
Communication with the buyer is carried out in an unusual way - check. (In this case: the buyer literally does not speak but has a 'personal assistant' who speaks for him).
Properties are being sold for an amount which is inconsistently higher than local market values - check.
The buyer is offering the agent a gift for no good reason - check. (In my jurisdiction, this would count as bribery and would be illegal).
Buyer has a previous conviction for fraud - check.
The deal will likely go ahead and the buyer will have successfully laundered dirty money by turning it into legally held property assets.

In the UK, the young agent would be guilty of a criminal offence under the Money Laundering Regulations 2017.

(Sorry, missed the bit about the parole officer: yes, if the buyer's actual parole officer has been informed, then the sale won't go ahead because the authorities will step in and stop it; however if it DID go ahead, the agent would be facilitating money laundering).
posted by damsel with a dulcimer at 11:53 PM on October 14, 2021 [7 favorites]


Buyer or "secretary" may be ringers (i.e. impersonators). I'm going to guess the secretary is the real perp, and the "buyer" is just someone they dressed up for the part. They are impersonating the person who actually has the money. Secretary may have been caretaker of the victim and stole his info and hired someone to play a part. The agent is getting a bribe to make him enthusiastic to push through the deal without further checking.

Why go through all these charades? I am not sure. I suspect they don't want to take the money out of the victim directly, but instead, go through a real estate layer. They may take the deed (once the deal clears) to get a loan and disappear with the money, leaving the victim to deal with the fallout since instead of one victim, you now have like 3 or more that will end up fighting each other and the agent will look guilty as heck.
posted by kschang at 12:20 AM on October 15, 2021 [2 favorites]


Brokerage for whom the agent works calls the credit union to verify, and it all looks good.

I would redo this step and make sure to make independent contact with the credit union - don't use phone numbers on any provided materials and don't necessarily trust a website either. Fraudsters are now creating fake facades to get past these kind of verification steps.

In all likelihood there will be a step where they will require the young agent to front what seems like a small amount relative to the larger sums and rewards being bandied about for some reason but may be the real point of the fraud.
posted by srboisvert at 4:02 AM on October 15, 2021 [11 favorites]


How serious are you and the agent about getting to the bottom of this? There's clearly some serious money involved, and I agree with damsel with a dulcimer that the deal ticks a lot of money-laundering boxes. Which means you may be dealing with some seriously nasty people.

Having said that, I agree with srboisvert that you should re-do the check with the credit union. First establish for certain that the credit union is a real one, and not a front created by your "buyer". Given that there may be money laundering involved, try to find out if the credit union has a money laundering reporting officer (I don't know about credit unions in the US, but a significant financial institution in most countries has to have such a person). The credit union would have (again, going on my knowledge of other countries) obligations about "know your customer", and they should have vetted these people.

You may end up needing to talk to law enforcement, which may not be your local police, but a body with a national remit like the FBI.

Caveat: My knowledge of money-laundering law (such as it is) is based on neither UK nor US law. I hope I'm not just being alarmist, but if we really are talking about money laundering there is more at stake here for the agent than just losing some money.

ETA IANYL and TINLA.
posted by Logophiliac at 5:14 AM on October 15, 2021 [2 favorites]


In all likelihood there will be a step where they will require the young agent to front what seems like a small amount relative to the larger sums and rewards being bandied about for some reason but may be the real point of the fraud.

Yup, this.

Something like:

Saturday afternoon buyer tells young agent, "I really want to close this deal on Monday morning, I leave for a month of business in Switzerland @ 3 pm that day, so I went to the credit union and got cash. But they messed up the count, I'm $50,000 short, and of course they're closed for the weekend."

Young agent, watching a huge commission fly away, "oh jeez oh man oh no what can we do??!!"

Buyer: "Well, you could "lend" me the cash, just between us . . . Of course my assistant would go to the credit union Monday afternoon to get cash to reimburse you."

Young agent: "Jeez, I don't have that kind of money!"

Buyer: "Oh, that's a real shame, I just don't think this deal will happen . . . Wait! I just bought you that $40,000 car! You could sell it, or use it as collateral for a loan from a family member or a coworker or even the brokerage, and I think I can scrounge up the rest!"

Young Agent: "But I don't actually have the car . . ." (Assuming they haven't physically gotten the car yet - if they have then it will eventually turn out that the cashier's check or other financing that convinced the dealership to let the car off the lot is fake, and the dealership will come looking to repo the car. And if Young Agent has the actual car in their possession it's possible they could find a private buyer on Craigslist or somewhere.)

Buyer: "Oh, you've got that paperwork that "proves" that the car will be titled in your name in a few days. That should be fine. And even if you sell it rather than getting a loan, the commission will be more than enough to get an even better car."

Even if the new car isn't really a serious part of the scam (it's just the buyer throwing money around to "prove" how rich they are and therefore how easy this real estate deal should be, and to make the agent feel all warm and fuzzy about the buyer and thus less likely to be suspicious), that's the setup - there's some last minute "problem" with the deal that requires the agent to come up with a hefty chunk of cash, they hand the cash to the buyer, buyer disappears forever.
posted by soundguy99 at 5:30 AM on October 15, 2021 [6 favorites]


This seems like maybe a Ponzi/Identity theft scan combined with money laundering. The “information needed to properly title the car” may be used to fund the next scheme. It may also be used to extort the agent in the near future, and they may find they have actually co-signed a loan for the car which they will be on the hook for financially and may be seized if the authorities get involved. This scheme is likely being funded by the last agent. This agent was probably targeted specifically because they drove a crappy car and were identified as being hungry to make sales and may overlook the fishy details of these deals. If I had to guess, I would say the agent works for a small local agency and not one of the big national or global agencies that probably train to look for this sort of thing.
posted by Short End Of A Wishbone at 7:50 AM on October 15, 2021 [1 favorite]


I would love to know how this turns out. As others have said, the whole thing should happen in the next week or so before the checks are discovered to be no good, although if there is identity theft involved, this part might happen later.
posted by Short End Of A Wishbone at 7:57 AM on October 15, 2021 [3 favorites]


Saturday afternoon buyer tells young agent, "I really want to close this deal on Monday morning, I leave for a month of business in Switzerland @ 3 pm that day, so I went to the credit union and got cash. But they messed up the count, I'm $50,000 short, and of course they're closed for the weekend."

This would be my bet. At some point, having attempted to create a sense of trust and friendship with the agent (as well as having sussed out that they are gullible), there will be some crisis (the classic "sense of urgency" common to con artists and social engineers) that can be resolved with quick cash that they'll pressure the agent into providing in hopes that blinded by the prospect of closing three easy contracts plus getting a car that they'll cough up the money.
posted by Candleman at 8:04 AM on October 15, 2021 [3 favorites]


It's also possible that it'll be a variation on the "sending too much money" check scheme - the dealer will call and say there was a problem with the payment, the client will apologize and overnight a cashier's check to the agent to pay for the car with a few extra thousand tacked on by accident that they'll request the agent send back via Western Union or whatever.

The fact that the buyer is doing this under his legal name which is easily linked to fraud makes me think this is not going to be the fanciest con game in book.
posted by Candleman at 8:48 AM on October 15, 2021 [2 favorites]


Yeah, what everyone is describing about needing some extra cash fits with the car isn't actually paid for yet, right?

Car dealer is satisfied that funds are available. Car salesman is happy, real estate agent is happy. Car will be ready for pickup in a few days.

That doesn't sound like there's any actual payment happening yet.
posted by OnTheLastCastle at 9:19 AM on October 15, 2021 [1 favorite]


Is it also possible the car salesperson is in on it? When the young realtor asks where the car is, they will say "What car? I don't know what you are talking about."
posted by Rock Steady at 9:57 AM on October 15, 2021 [2 favorites]


Best answer: To expand on my previous answer, the car as an object worth money may be less important than the idea that it's a form of love bombing. Young agent is so impressed with the idea that the buyer will just throw a new expensive car their way that they think, "Well, clearly the buyer has plenty of money for the real estate deal!" And then when the buyer asks them to do something unusual or suspicious or outright illegal for the real estate deal, they think, "Well, I do kinda owe them for giving me that car, I'll bend the rules just this once."

(And that psychological pressure can happen even if Young Agent doesn't have actual possession of the actual car.)
posted by soundguy99 at 10:16 AM on October 15, 2021 [4 favorites]


Best answer: I'm not sure what this scam is, but young agent should cease all contact with buyer/personal assistant, and turn this over to their lead broker to handle. They absolutely should not take possession of the car.

Source: was a real estate agent for many years, never lost my license like young agent very well may over this.
posted by nancynickerson at 11:29 AM on October 15, 2021 [5 favorites]


Response by poster: OP here...How might my young friend be in danger of losing his license? This is in the US. Does anyone have specifics on how the scam works? Everyone has confirmed that it does sound like a scam, which I assumed in the first place. Thank you for confirming, but what specifics can I use to explain it to the agent?
posted by woman at 12:29 PM on October 15, 2021


The reason we all think it's a scam, is that it sounds too good to be true rather than because it's a well known scam.

If it's money laundering then there's no scam as such, but the car is a bribe. The UK has gotten better at preventing money laundering, so here the buyer should eventually have to demonstrate where the money is from (not just that they have it) for the property transactions to complete and when they can't it all falls apart. I don't know if that's true in your jurisdiction, nor do I know whether the agent would be breaking the law by accepting the car.

Otherwise, the con itself happens when the agent is asked to pay some money that is a lot less than the value of the car. The specifics can vary beyond that. If you can get them to believe that urgently needing to pay money is *always* the hallmark of a scam and they should never do it, then that might be enough to prevent it happening. The request for money is such an obvious red flag, that in my banking app when you go to set up a new person to transfer money to they always give you a warning about people scamming you by requesting money.
posted by plonkee at 1:08 PM on October 15, 2021 [1 favorite]


Does anyone have specifics on how the scam works?

I think Candleman put it most succinctly: "At some point, [. . .] there will be some crisis [. . .] that can be resolved with quick cash that they'll pressure the agent into providing in hopes that blinded by the prospect of closing three easy contracts plus getting a car that they'll cough up the money."

We can't say for sure exactly what this "crisis" will be or how it will be presented or when, but as plonkee says, "urgently needing to pay money is *always* the hallmark of a scam and they should never do it".

what specifics can I use to explain it to the agent?

Thus the point is that it's not the specifics that we know or that you can use to convince the agent, it's the general idea of "too good to be true". The problem with worrying about specifics is that in any given con or scam the details can vary, so if you try to convince the agent that it's a scam by the details ("They'll want you to sell your car!") and instead the scammers are running a variation ("We need $20k to bribe the housing inspector!"), then your agent goes, "See! They didn't ask me to sell the car, this must be a legit deal!" And then they get scammed.

Probably the best you can do is emphasize to them that if the buyer asks them to do ANYTHING besides the buyer handing over confirmed non-counterfeit actual cash money in exchange for a signed title to the property in the presence of the agent's superiors and lawyers in a place and at a time of the broker's choosing, they need to walk away fast.
posted by soundguy99 at 3:31 PM on October 15, 2021 [2 favorites]


It depends on your state, but in mine I would have been:

-let go from my brokerage for accepting the car
-lost my license for aiding a crime.

Some more perspective: when I did real estate, I did high end sales. We wouldn’t take on listings worth less than $1mm. Never did I ever receive a gift from a client, beyond say a bottle of champagne at new year’s. High end buyers know exactly how much you’re making in commission (aka a lot of money on that kind of deal) and wouldn’t add to that; typically it’s the agent who buys the buyer/seller a gift, not the other way around.
posted by nancynickerson at 3:51 PM on October 15, 2021 [3 favorites]


How can I explain it to the person involved?

In my sad experience, if the person involved doesn't already perceive on their own that a scheme like this stinks to high heaven and that the appropriate response is to run, not walk, away from it: you can't. Some people just don't grow anti-scam spidey senses until they've been ripped off a completely distressing number of times.

Good on you for trying, though. My wizened cynical old heart would love to get confirmation from you that you managed to get through, if you do.
posted by flabdablet at 12:13 AM on October 16, 2021 [1 favorite]


Verbal offers are accepted with written offers to follow.

Verbal offers are not valid for real estate in the US -- I think this was an early step in the scam to see how your friend would react. To see if your friend has poor enough judgement that they will get excited enough about money to disregard things that they should definitely already know if they passed a real estate licensing exam.

Buyer says "no problem" and offers a copy of a credit union statement. Brokerage for whom the agent works calls the credit union to verify, and it all looks good.

What exactly happened here? Did the brokerage just verify that an account for John Smith or whoever had the appropriate amount of money in it, or has it actually been verified that the "buyer" really is John Smith? Because identity theft is a pretty obvious place for the scam to be happening.

OP here...How might my young friend be in danger of losing his license? This is in the US.

State laws are entirely different in different states. Also the National Association of Realtors can kick people out even if they have not violated state law.

I don't know specifically how your friend might be able to lose his license, but generally getting involved in illegal activities doesn't end well and loosing his license might be the least of his problems -- if the supposed "buyer" got the money for the car via impersonating the actual account holder, but your friend is the person whose name is on all the car paperwork -- your friend isn't likely to escape prosecution with a story about how some mystery man gave him a car. And many localities don't like to give licenses for things involving a financial duty of care to people who have been indicted for financial crimes.
posted by yohko at 1:00 AM on October 19, 2021


OP, please come back with an update if you do find out more about how the scam works. It's likely no one here knows exactly how it will play out, but if your friend continues to go along with it they will be likely to learn this information and it can be valuable to others to know.

(Note that I am NOT encouraging your friend to dash out and discover this information... quite the opposite, actually)
posted by yohko at 1:03 AM on October 19, 2021


Response by poster: OP, here. The scammer returned to the dealership, a few days later to "pick up" his car. The funds had not been received, but he was in a hurry to and "needed" his car. It was to be titled in the realtor's name, but he was there to "pick it up for him." The dealership was not even close to complying. He apparently left in a huff. He was perturbed that a man of his means was treated like someone ordinary!
posted by woman at 7:41 PM on November 22, 2021 [6 favorites]


Huh, so the scam was actually a lot simpler than we thought. It's actually aimed at the car dealership, not the agent. But these seem to be amateurs, as the dealer is not going to release the vehicle without funds or loan agreement in place. Scammer probably thought if they can get the car out of the lot and disappear with it the dealer will go after the agent since it's in agent's name. But this ain't dealer's first rodeo.

OP, by "scammer", do you mean the "rich guy" or the "secretary"? I am guessing the latter.
posted by kschang at 12:01 PM on November 23, 2021


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