BRADENTON, Fla. (WFLA) – Sheryl Johnson is finally in her new Bradenton home, but she’s out $51,000 because of an elaborate real estate scam, which real estate professionals failed to protect her from.
None of those professionals are stepping up to help Johnson now. She had to borrow money from family and friends to come up with the new down payment. Now, Johnson fears she’ll never see her money again. It took her years to save up the cash.
She is furious Bank of America failed to stop the crook from taking her money, even after she figured out the con and warned the bank. “The bank should be responsible,” Johnson said. “How could they just allow this thief to take my money?”
This problem started after a computer hacker apparently broke into her real estate agent’s email account and manipulated wire transfer instructions, rerouting the money to the crook’s bank account. Johnson said she cried in the lobby and begged bank employees to freeze the crook’s account. She was turned away.
She now knows that a scammer apparently changed the bank account and recipient’s name on the instructions and then sent it to Johnson. Since the email came from Newgard’s email address, she didn’t question anything.
8 On Your side took her case to the U.S. Secret Service. The agency works, along the FBI and other agencies, to track down economic criminals. Billy Joe Powers, special agent in charge at the Tampa division of the Secret Service, knows this scam well. He said there have been 22,000 such cases since 2013 – with $1.3 billion up for grabs.
Powers said a victim should contact his or her bank and law enforcement as soon as the scam is discovered. If Bank of America had done this right away, Johnson’s money could have been rescued before the crook took it out of the bank days later. The crook closed the account after taking the money out.
Our 8 On Your Side investigation found this scam is growing in popularity. In March the Federal Trade Commission issued an official alert to the real estate and banking community. The alert warned against sending financial information and wire transfer information through email. It also advised those involved in real estate transactions to keep their security software up to date.
In fact, authorities say emails associated with real estate agents are targeted because the crook monitors the emails, knowing it’s a matter of time until financial information could come through. During that monitoring time, the thieves learn real estate lingo and the names of the home buyers. The thieves adjust their language to trick the victims. By the time a real estate agent realizes a crook is posing as him or her, it’s often too late.
Johnson’s real estate agent, Elizabeth Newgard, of Boyd Realty, did not use an encrypted email system. Johnson said local police sent her to the FBI. She says she still has not heard back on whether the FBI is investigating. This incident occurred Aug. 19.
“No one seems interested in helping me,” she said.
Johnson now sees red flags in the wire instructions. She thinks her Wells Fargo banker should have caught those signs. For example, the top of the cover page lists the title agency and attorney name as the receiver of the funds. However, further down the page, an account number for a trust is listed. The scammer listed that number, but the bank did not question it.
Further concerning is what happened after Johnson discovered she had been scammed. “We walked right across the street to Bank of America and asked them to freeze that account for us, and we were told we would have to deal with the fraud department through Bank of America to the fraud department of Wells Fargo,” Johnson said.
Johnson says she was told her money had successfully transferred to this stranger’s account, but the bank was unable to do anything about it. This was on Friday, Aug. 19. Johnson says the money was gone. The account was closed by Monday.
“I feel Bank of America really dropped the ball,” Johnson said.
Matthew Daily, a spokesman for Bank of America, said he cannot comment on the identity of the person who took the money but said that the bank is looking into the situation.
At Boyd’s Realty, broker Brenda Boyd May says this is the first time this has happened at her business and there are no signs anyone else’s email has been compromised.
Newgard said she is “heartsick” about what happened to Johnson’s money and is trying to reach out to authorities who may be able to help. “I also want to warn others in real estate so we can have safeguards in place,” Newgard said.