Denver couple lost $30,000 in email scam targeting real estate deals
Experts are warning anyone buying or selling real estate after a Denver couple, days away from closing, lost tens of thousands of dollars.
In 2023 Coloradans lost more than $57 million, in what's known as "BEC scams," or business email compromise, with real estate transactions as one target, according to the FBI.
"We were very much looking for a home with kids in mind and, you know, having enough space to start a family," Drew LeMay said.
They were fortunate to find a home they thought checked a lot of the boxes, so they put in an offer and were thrilled to move on to the next steps.
Scheduling inspections, digging up documents and email after email.
"My wife and I work in the health care field, so we are very much foreigners to the process," LeMay said.
Days before they were set to close, they got an appeal that appeared to be a discussion between their lender and their title company, First American.
"They obtained this email copied and pasted into their own email chain, added us into it and then were having a real-time conversation with us about closing costs," LeMay added.
But those conversations, they would later learn, were with a hacker and if you look closely, the email address they were coming from was just a few letters off from the original.
"It is absolutely growing and what people are able to do better now than they could in the past is essentially create fraudulent emails and so this is what we call 'BEC,'" LeMay said.
Steve Beaty is a computer science professor at Metropolitan State University of Denver. He focuses largely on cybersecurity.
"Closings are becoming a target because there's a whole lot of money involved," Beaty said.
Experts like Beaty say that, in many cases, the scammer sends a phishing email to a broker or title company. If successful, they then have access to that email account and all the information inside.
They use that to trick buyers and, ultimately, take their money.
"I trust almost no pieces of email. If I am going to wire money, I'm going to make a call," Beaty added.
Talking with your realtor or title company on the phone or in person is one way to protect yourself from wire fraud.
In the LeMays' case, they called their financial advisor in charge of wiring the funds.
"She contacted Edward Jones, she spoke with the senior branch administrator on how to send out this wire, she said, 'I don't want to get this wrong in this process, I'm going to go ahead and send you the email chain,'" LeMay said.
The transfer was approved.
"We heard back the next day that they didn't get the wire," he said.
More than $30,000 was now gone.
"It's a lot of years working to save up that money and it's going to take a lot more years to get it back," he said.
While they were able to pinch and pull from other savings to still close on the home, their plans to start a family are now on hold.
"That's the heartbreaking part for us," LeMay said.
The LeMays tried to freeze the transfer with no luck, they've filed insurance claims with both Edward Jones and First American Title, which, in December, had a major cyber security breach. Both companies have denied any responsibility to the couple.
In a statement to CBS Colorado First American said, "Incidents like this are why First American Title considers wire fraud prevention a top priority, and why First American Title regularly promotes awareness of wire fraud prevention best practices to consumers, including encouraging real estate agents to educate buyers early and often on wire fraud prevention and providing consumers written and verbal warnings at multiple points during a transaction."
In a separate statement, they added, "Our cyber security team can say with complete certainty that the wire fraud is completely unrelated to our December incident, as the customer's transaction took place after all our systems were restored and email accounts reset."
Calls and emails to Edward Jones were not returned.
