Real estate fraud close call: Property owner, real estate broker unravel scam in Northern California
A Rocklin man nearly fell victim to real estate fraud. Now, the property owner and a Roseville real estate broker are sharing the concerning story as a warning to others.
It began in early August. Michael Joseph said he got a call from a man named Mohammad, who was interested in selling a vacant piece of land he said he owned on Sylvan Road south of Auburn Boulevard in Citrus Heights.
The sale turned out to be unlike any other Joseph had handled in his nearly 20-year career as a real estate broker.
Joseph said he researched the parcel and put it on the market for $200,000 for his client. They quickly got an offer of $25,000 over the listing price.
Joseph let Mohammad know the good news by communicating by phone or email because his client was often traveling for business.
“The seller said, ‘Let's take that one. Let's run with it.’ Seven-day close. All that looks good. Cash offer, all contingencies removed,” Joseph said.
However, the sale hit a snag.
“A day before close of escrow comes, my escrow officer, who we've been working together for years, emails me,” Joseph said.
The escrow officer expressed concerns about the seller.
He wanted to use his own notary, but Joseph said that notary was not on the escrow company's vetted list. So, he asked Mohammad to call escrow to finalize signing arrangements.
However, the escrow officer told Joseph that Mohammad had not yet called.
“She said, ‘When they are traveling all the time and not available to meet in person,’ she said, ‘That's not unusual. That happens.’ She said, ‘When they want to use their own notary, it's not unusual that happens. But when they never contact escrow, when you add all three of those together, then it becomes a red flag.’” Joseph explained.
With all of that in mind, he decided it was time to meet Mohammad face to face. He went to his Rocklin home unannounced.
“I was glad to meet him. I said, ‘I'm Michael Joseph, your agent,” Joseph recalled.
The man responded, "Michael who? Agent in what?”
"I thought initially it was a joke,” he said.
Mohammad was confused because he was not in the process of selling his land in Citrus Heights.
“I was a bit shocked,” Joseph said. “I said, ‘Mohammed, I think we have a case of fraud.’”
The FBI investigates this type of real estate fraud.
“The scary part is we are resolving a lot of these to criminal rings,” said FBI Supervisory Special Agent Jamil Hassani.
KCRA 3 Investigates spoke with him at the FBI’s Sacramento office.
“Our transactions are even more remote now. You can buy a house sight unseen from across the world just through virtual signing,” he said.
It is something that scammers especially took advantage of during the COVID-19 pandemic.
KCRA 3 Investigates combed through reports from the FBI’s Internet Crime Complaint Center, showing tens of millions of dollars lost over the years because of real estate fraud in California, and even more nationwide.
It has impacted thousands of victims. A reality that hit too close to home for the real Mohammad and his wife.
“We lost our sense of comfort and security for a while,” he said.
Given what happened, he did not feel comfortable sharing his last name publicly.
Mohammad told KCRA 3 he tried to report the incident to law enforcement.
“There has to be some consequences for this,” Mohammad said.
Joseph tried, too, reaching out to local and federal agencies.
“All of them said, because there was no exchange of money and because title was not transferred, they will not pursue it,” Joseph said.
Still, in discussing the fraud, Joseph and Mohammad managed to make the best out of the bad situation.
“He said, ‘How much did you have it in contract for?’ I said, ‘Well, 225.’ He thought and said, ‘You know, I’ll sell it for 225,’” Joseph recounted.
“He already had a buyer, so it didn't take us long to close the deal,” Mohammad said.
Together, they landed a successful sale for everyone except the fraudsters who had initially set it all in motion.
In an effort to prevent falling victim to real estate fraud, property owners can set up alerts on Google or Zillow for mentions of their address online.
Some counties also offer notification programs for property owners.
For instance, Placer County automatically alerts owners about recorded activity related to their properties.
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