I-Team: Elaborate timeshare scam costs man thousands
WEST PALM BEACH, Fla. (CBS12) — The real estate market in Florida continues to be fast-paced and competitive. There's more pressure than ever on buyers and sellers to act fast, and seal a deal.
But that pressure also means people are more vulnerable to scams during this already stressful process. Bad actors posing as buyers, sellers, real estate agents and title companies can quickly steal your life savings.
Wire fraud scams in real estate transactions are becoming more common, and in some cases, more sophisticated.
One senior in West Palm Beach found this out firsthand, when he tried to sell his timeshare.
EUGENE'S STORY
Eugene Marenga thought he was about to sell his timeshare in Panama City Beach for a great price.
About a year ago, he received an unsolicited phone call from someone claiming to be a real estate attorney, representing a travel company based in Mexico. They wanted to buy his timeshare for more than $400,000.
"When they threw that figure out at me, I said 'Wow, sure I'd be able to sell it.'"
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At the time, Eugene thought he was dealing with a credible buyer. The lawyer appeared to have a website and address in California, and the travel company sent him a letter of intent outlining their offer.
There was just one catch: the "buyers" wanted Eugene to pay off the $11,000 balance on his timeshare before entering into a contract with them. To pay off the balance, they requested he send a wire transfer to an account in Mexico.
Eugene complied, thinking the deal would proceed. He was confused to learn from the timeshare management that he was overdue on his payments, and still owed them the $11,000 -- the first clue that something was wrong.
He paid the management $11,000 over the phone to clear that up first, then sent the California "lawyer" a letter in the mail requesting clarification on the wire transfer he already sent. That letter bounced back: the address on the lawyer's website wasn't valid.
The "lawyer" called Eugene and convinced him they were working it out. He said they were trying to wire transfer him the $400,000+ from the timeshare sale, but made an error. Instead, they were going to send him a check through the mail.
Later, Eugene received a phone call from someone claiming to be from Mexico's Border Patrol. That "officer" said they confiscated Eugene's package, noted that the check did not come with proper documentation, and planned to fine Eugene.
They demanded he pay the fine via wire transfer to Mexico. Upon threat of arrest, Eugene sent them more than $100,000 to pay what he thought was a fine -- still hopeful that the money from the timeshare sale was coming through.
After that, the "lawyer" who initiated this "sale" contacted Eugene to tell him he needed another lawyer -- this time, a lawyer based in Mexico -- to help him get his package and check back. They gave him the name of someone else, who requested a $3,500 retainer -- again, wire transferred to an account in Mexico.
The new "lawyer" told Eugene he had great news -- they won a judgment against the courier company handling his package/check, and they were going to give him even more money than he was originally promised. The catch this time: he had to pay a $50,000 "tax" on that money.
But even that payment didn't stop the ever-evolving scam. There were more requests and demands for money -- stories about more taxes and an insurance policy -- all with the promise that Eugene would get more in return if he only complied.
Those requests have turned into threats. When the CBS12 News I-Team sat down with Eugene to go over his situation, we were able to reach some of these key players on the phone. They denied scamming Eugene, but threatened to "come after" us and Eugene.
All told, he has lost more than $250,000 -- and he's lost hope that he'll get it back. He turned to us for advice, hoping to make the threatening phone calls end.
"How do I put a stop to it? That's what I can't understand."
EXPERTS WEIGH IN
The I-Team spoke to three experts in wire fraud and financial crime.
While FBI Special Agent William Stewart, Supervisor of White Collar Crimes based in West Palm Beach, could not comment on Eugene's case specifically, he did say that the bureau is seeing an uptick in similar scams involving wire fraud in real estate scams.
He said there are common red flags to watch out for.
"If the people on the other end of the transaction are pushing you, saying this has to happen now, that something bad will happen, that should set off alarm bells," Stewart said.
He added that these criminals are often in other countries, and because they rely on wire transfers, they can quickly steal their victims' money and re-invest it in other scams.
"A lot of the times the money is transferred and money laundered many times in many accounts in many countries," Stewart said. "So what that involves in the investigation is a tremendous amount of coordination with other law enforcement agencies, other governments."
It's very difficult to get money back once it's been sent via wire transfer, Tom Cronkright, founder of wire fraud prevention company CertifID, told the I-Team.
His advice: "Take a step back and slow down. Confirm the information that you are receiving is coming from a legitimate source. That is going to make the difference between a satisfying closing, and financial ruin."
Wire fraud in real estate transactions has been on the rise. One report by the American Land Title Association estimates one in three real estate transactions are the target of fraud.
"Wire fraud is out there," Cronkright warns. "It can strike at any moment. And your life savings can be gone in a single transfer with very little hope of getting it back."
John Tobon, Professor of Global Financial Crimes at FIU, reviewed the narrative of Eugene's case.
"Unfortunately the pattern that is demonstrated by what happened to this gentleman is the exact pattern of how these things happen," Tobon said.
He said to be extremely skeptical of cold calls making unsolicited offers.
"No serious business, no serious entity, is going to cold call you and ask you to transfer money without something else to back it up," he said.
Both Cronkright and Tobon agreed that Eugene's case sticks out because of how elaborate and detailed the story was.
We asked the FBI if there is a common target or victim for these kinds of scams.
"These people are so sophisticated and intelligent they can trick all of us," Stewart warned.
INVESTIGATION ONGOING
After we met with Eugene, we helped him get in contact with the Florida Attorney General's office to file a complaint.
All three of the experts in wire fraud investigations told us that the earlier a victim reports a case of wire fraud, the better the odds are of recovering the money and exposing the scam, so more people are not victimized.
Eugene tells us he has also been in touch with Senator Rick Scott's office, which has helped him report his case to the FBI.
The experts told us victims should also file a report with their local police departments, but Eugene says he hasn't been able to get an appointment to file with West Palm Beach Police yet.
He said it will take him years to financially recover from this, and he hopes other people can learn from his situation and avoid becoming a victim.
