In this particular case, Granillo asked a broker from Tucson to pay a 20 percent kickback on commission received  for listings, at which point the broker alerted federal law enforcement officials. The broker then began assisting law enforcement in the investigation.  In a recorded meeting between Granillo and the broker, Granillo stated the arrangement was a “natural part of business.” In the same meeting, Granillo made arrangements to receive an $11,200 payment from the broker.

If convicted, Granillo’s charges could result in a statutory maximum penalty of 20 years in federal prison.

Note: An indictment contains allegations that a defendant has committed a crime.  Every defendant is presumed to be innocent until and unless proven guilty in court.

The entire article may be reviewed at:  http://www.justice.gov/usao/cac/Pressroom/2013/044.html

State Scams/Frauds

Agent’s Credentials Being Used Fraudulently in Conjunction with Burglaries
June 2012

Email Scam: Out-of-Town Buyer
Scammer Found Listing & Agent on REALTOR.com

Counsel Highlights Two Scams Reported in the Region
Out-of-State or Out-of-Country Transactions; Fraudulent Foreign Timeshares

Robbery Attempt on Listing’s Appliances
Agent reports that items of value in listing have been target of thieves.

Robbery During Showing Appointment Window
A home was robbed during a noon to 2:00pm showing appointment timeframe. It is unclear if the showing and robbery are related.

Beware – REALTOR® Identity Theft
A valley REALTOR® has reported someone posing as a REALTOR® to gain access to a property for the purpose of stealing items from a home.

A Foreign Buyer Transferring Funds to US
Agents continue to get inquires from alleged buyers outside the country with requests to purchase a property that often appear, in the words of one agent, “too good to be true.”

Mortgage Lawsuit Scam Hits Arizona
Notice from Arizona Department of Real Estate – August 23, 2011
Attorney General Tom Horne issued a warning to consumers to be wary of any notices or advertisements that claim to offer homeowners facing foreclosure “complete forgiveness of the loan” or other monetary relief if they join a class-action lawsuit. Such ploys are likely a pretext to collect illegal up-front fees for foreclosure assistance.

5 Real Estate Scams You Need to Know About

Arizona REALTOR® Magazine – October 2010

National Scams/Frauds

Payments to Entities, Asset Dumping & More

“Fraud Insights” – Fidelity National Financial – Volume 7 – Issue 8 – August 2012

U.S. Attorney Charges 11 for Mortgage Fraud, One for Attempted Murder

DSNews.com – July 20, 2012

Third-Party Short Sale Negotiator Misrepresents Closings Costs on HUD-1 Statement

“Fraud Insights” – Fidelity National Financial – Volume 7 – Issue 7 – July 2012

REALTOR® Guilty of Conspiracy to Commit Fraud in Connection with Short Sale Transaction

July 2012

Scams Affecting the Elderly

• Accomodation Signing Protects Against Elder Abuse
  “Fraud Insights” – Fidelity National Financial – Volume 7 – Issue 4 – April 2012
• Quite an Adventure
  “Fraud Insights” – Fidelity National Financial – Volume 7 – Issue 4 – April 2012

4 Ways to ID Borrower-Assistance Scammers

NAR Daily Real Estate News – January 13, 2012

Fake Short Pay Letters Plague the Industry
“Fraud Insights” – Fidelity National Financial – Volume 6 – Issue 10 – October 2011

Scammers Use Vacant Homes as Bait
KTNV-13 News (Las Vegas) – October 7, 2011

Two Men Face Charges on Duping Home Owners
San Bernardino Sun – August 30, 2011

More Details on Scam/Fraud Alerts

————————————————-

REALTOR® GUILTY OF CONSPIRACY TO COMMIT FRAUD IN CONNECTION WITH SHORT SALE TRANSACTION

July 2012

The importance of this case is that there have been few, if any, convictions of real estate agents based solely on a short sale transaction. In this instance, the REALTOR® was a California licensee who pleaded guilty to conspiracy to commit real estate fraud in two separate short sale transactions. What did the REALTOR® do ? He was accused of exceeding the compensation limitation placed on him within the listing agreements for the short sales. The listing agreements held him to compensation not to exceed 7% of sales price. The agent had the buyers pay an additional amount of money as a short sale negotiation fee, which he concealed and did not disclose to the lenders or sellers. The REALTOR® lost his license, served jail time and was ordered to pay restitution of approximately $25,000. He was also given three years probation. View the complete California DRE news release.

————————————————–

AGENT’S CREDENTIALS BEING USED FRAUDULENTLY IN CONJUNCTION WITH BURGLARIES

June 2012

The Arizona Department of Real Estate was notified by the Phoenix Police Department that a burglar is using an agent’s information to set up appointments at properties and then burglarizing the property. The agent whose information has been compromised is Chris Buckley. The police report that the suspect has struck twice, once in Phoenix and once in Gilbert. REALTORS® are asked to confirm showings with Chris Buckley before giving out lockbox codes. If it is determined the showing is not actually being set up by Buckley, the agent should contact the Phoenix Police Department’s Crime Stop at 602 262-6151. They will assist the agent reporting to get in touch with the proper police department, if needed.

————————————————–

EMAIL SCAM: OUT-OF-TOWN BUYER

March 2012

Email scams continue to circulate in Arizona. One of our members reports that she received an email request whereby the scammer found her name on REALTOR.com.  The party contacted her regarding a property she had listed for sale and said he wanted to purchase it. He said that he was out of the country and requested a referral to a local attorney to handle his affairs and disburse funds to escrow once some liquidation occurred. The agent asked a local attorney to contact the party. The attorney sent an email, which was redirected to another individual. That individual said they had no knowledge of the other party and indicated that they were not trying to purchase property in the U.S.

————————————————–

COUNSEL HIGHLIGHTS TWO SCAMS REPORTED IN THE REGION

March 2012

At the Rocky Mountain Regional Conference, legal counsel discussed two new scams reported in the region. The first involves an out-of-state or out-of-country buyer who contacts an agent to make a cash offer for property.  The buyer sends a cashier or certified check for earnest money or down payment.  Shortly thereafter, the buyer comes up with excuse to have the agent or title company refund him/her the money.  Thereafter, it is discovered that the cashier or certified check is fake. The second involves fraudulent timeshares in foreign countries.  The buyer is instructed to deposit fund into a title/escrow company that does not exist.  (Note:  A list of title insurers in Arizona may be found at:www.id.state.az.us/consumerautohome.html.)

————————————————–

ROBBERY ATTEMPT ON LISTING’S APPLIANCES
Submitted by a Phoenix REALTOR® – November 2011

An agent in Phoenix reports that twice when listing properties in the last year, he has included photos of items of value, such as appliances and TVs, and then had criminals attempt to steal the items. The latest incident occurred in Goodyear. Luckily, the criminal was scared away by a neighbor, but the appliances were already moved to the garage when the police arrived.

————————————————–

ROBBERY DURING SHOWING APPOINTMENT WINDOW

Private listing remarks said: “call lister, call occupant” and provided the occupant’s phone number.

Occupant received a call, and a showing was arranged between noon and 2:00pm. This suggests that the caller had MLS access. The owners vacated the home between noon and 2:00pm. They thought the front door was locked; however when they returned, it was unlocked. While the lockbox was not used, the home was robbed of cash and jewelry during the noon to 2:00pm timeframe. Some of the jewelry was in an unusual, difficult-to-find place. Nothing else was disturbed, and no large items were taken. The home was left completely clean. The telephone call came from a ‘throw-away’ cell phone.

While there is no way to know for certain if this had to do with the call the owners received, it seems worth passing along as the home was robbed during the time of the planned showing.

The listing has been changed to remove owner/occupant telephone numbers, and showings will be by appointment only.

————————————————–

BEWARE – REALTOR® IDENTITY THEFT
A valley REALTOR® has reported someone posing as a REALTOR® to gain access to a property for the purpose of stealing items from a home.
The Arizona Association of REALTORS® (AAR) was notified in August 2011 that an individual, posing as a specific REALTOR® phoned a listing office and was given an access code to a mechanical lockbox for entry into the property. Once the impostor gained access, they removed items from the home. A police report has been submitted.
AAR is offering this information to our members as it appears to be a “scam” that affects both a REALTOR®, whose identity was used for access to a property, and the public, whose property was stolen.

————————————————–

A FOREIGN BUYER TRANSFERRING FUNDS TO U.S.

Submitted by Jerome King, Designated Broker, Long Realty Company – Tucson, Arizona
Agents continue to get inquiries from alleged buyers outside the country with requests to purchase a property. The inquiries often appear, in the words of one agent, “too good to be true.” The alleged buyer often requests the name and email address of an attorney. Please do not provide the name/email of an attorney without that attorney’s expressed permission and understanding. This seems to be a gambit these guys like to use to appear to be legitimate.
James Robertson, Jr., an experienced commercial agent, has helped me understand what information is needed to present to a possible international buyer and what we should require before we begin working on such a buyer’s behalf.
James explains that there are important federal laws to observe, and this buyer is probably in no position to perform. For example, JP Morgan Chase, China Bank in LA, Deutsche Bank, Barkley’s Bank and others have international cash transfer departments.
You should first refer this buyer to one of these institutions to have the currency transferred and converted to US currency. The bank will do the federal notifications and prepare it for transfer to the escrow company when instructed. If there are any taxes due or disclosures needed, the banking institution will do this as part of their fee, which is usually 2 to 5%. There may be a waiting period for seasoning of the funds, which may take as long as 90 days, depending upon what country it is coming from and how much cash is in the transaction.
Some banks were requiring the transferring entity to buy a liability policy on the transfer, covering the banks loss margin, if any, and fraud. This could be as much as 500 basis points.
Bottom line: Only do international deals if you really know what you are doing and always verify that hard funds are in a legitimate escrow account before you start to work with an international buyer. A scammer will disappear when you insist on this process of transferring funds first.

The crimes are often complex, involving several parties and occurring over multiple transactions. To protect you and your clients, educate yourself about mortgage fraud and be on guard for any warning signs in a transaction. You can start by reviewing these five scams, and then test your knowledge by taking NAR’s Mortgage Fraud Quiz.

1. The Foreclosure Rescue Scheme

The Scam: “Rescuers” promise cash-strapped home owners that they can save their home from foreclosure. The rescue, which involves paying upfront fees, can take multiple forms, such as the perpetrator obtaining a new loan on behalf of the owner or by having the owner sign over the home’s deed and then rent the home until they can repurchase it. Eventually, the home owner loses the home, either to foreclosure or the fictitious rescue company.

Red Flags: With foreclosure rescue programs, borrowers are often advised to sign over the title of their house to a third party, become renters of their home, not contact their lender, or send mortgage payments to a third party, according to Fannie Mae, which provides fact sheets on mortgage fraud.

2. Loan Documentation Fraud

The Scam: This fraud involves numerous schemes in which a borrower provides inaccurate financial information — such as about their income, assets, and liabilities — or employment status in order to qualify for a loan with lower rates and more favorable terms. Occupancy fraud is one growing area: Borrowers say they plan to live in the property when they actually intend to rent it.

Red Flags: Documentation may raise suspicion if the employer’s address is shown as a post office box, accumulation of assets compared to the person’s income appears too high or low, the new house is too small to accommodate occupants, the person has no credit history, or the application is unsigned or undated, according to Fannie Mae.

3. Appraisal Fraud

The Scam: A faulty appraisal — saying a property is worth more than what it really is — is connected to many types of mortgage fraud. It entails manipulating or overstating comparables, market values, or property characteristics in order to obtain a higher appraisal. The higher property appraisal, which generates false equity, is done by falsifying an appraisal document or using an appraiser accomplice to obtain the higher value.

Red Flags: Be skeptical of appraisals that are dated prior to the sales contract, list comparable sales that do not contain similarities to the property or are outside the neighborhood, the owner is not the seller listed on the contract or the title, or a third party participating in the transaction orders the appraisal, Freddie Mac warns.

4. Illegal Property Flipping

The Scam: This entails purchasing properties and reselling them at inflated prices. These scams usually involve faulty appraisals and inaccurate loan documents. The property is then refinanced or resold immediately after purchase for an inflated value. The home is purchased at a higher price, often by straw buyers working with the “flipper,” and eventually falls into foreclosure.

Red Flags: Some key things to look for are rapid refinancing of a property; the seller recently having acquired the title or acquiring the title concurrent with the transaction; an appraisal that comes in too high; a property that was recently in foreclosure being purchased at a much lower price than its sales price; or the owner listed on the appraisal and title not matching the seller on the sales contract, according to Fannie Mae.

5. Short Sales Schemes

The Scam: Borrowers owe more than the current value of their home so they fake financial hardship and no longer make their mortgage payments. An accomplice of the borrower then submits a low offer to purchase the property in a short sale agreement. The lender agrees to the short sale, unaware that it was premeditated. The property, after being purchased at the reduced price, is then often resold at the home’s actual value for profit.

Red Flags: The borrower suddenly defaults on the mortgage with no workout discussions with the lender, an immediate offer is made to a lender at a short sale price, the short sale offer is less than current market value, or a cash back is offered at closing to the delinquent borrower (disguised as “repairs” or other payouts, for example) and is not disclosed to the lender, according to Fannie Mae.

You can report instances of suspected mortgage fraud to Stopfraud.gov.
Reprinted from REALTOR® Magazine Online August 2010 with permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2010. All rights reserved.

“Fraud Insights” – Fidelity National Financial – Volume 7 – Issue 8 – August 2012

U.S. Attorney Charges 11 for Mortgage Fraud, One for Attempted Murder

DSNews.com – July 20, 2012

Third-Party Short Sale Negotiator Misrepresents Closings Costs on HUD-1 Statement

“Fraud Insights” – Fidelity National Financial – Volume 7 – Issue 7 – July 2012

REALTOR® Guilty of Conspiracy to Commit Fraud in Connection with Short Sale Transaction

July 2012

Scams Affecting the Elderly

• Accomodation Signing Protects Against Elder Abuse
  “Fraud Insights” – Fidelity National Financial – Volume 7 – Issue 4 – April 2012
• Quite an Adventure
  “Fraud Insights” – Fidelity National Financial – Volume 7 – Issue 4 – April 2012

4 Ways to ID Borrower-Assistance Scammers

NAR Daily Real Estate News – January 13, 2012

Fake Short Pay Letters Plague the Industry
“Fraud Insights” – Fidelity National Financial – Volume 6 – Issue 10 – October 2011

Scammers Use Vacant Homes as Bait
KTNV-13 News (Las Vegas) – October 7, 2011

Two Men Face Charges on Duping Home Owners
San Bernardino Sun – August 30, 2011