New analysis from the Financial Crimes Enforcement Network (FinCEN) indicates that homebuyers “suffer disproportionately” from incidents of business email compromise (BEC) in the real estate sector.
FinCEN issued its most recent Financial Trend Analysis on patterns and trends identified in Bank Secrecy Act data relating to BEC in the real estate sector in 2020 and 2021.
Through BEC, scammers target businesses and financial institutions that routinely conduct large wire transfers and rely on email for communication regarding the wires. Perpetrators may obtain unauthorized access to networks and systems to misappropriate confidential and proprietary information. The sector remains a target for BEC attacks exploiting the high monetary values generally associated with real estate transactions and the various communications between entities involved in the real estate title and closing processes (e.g., title companies, title agents, closing agents, and escrow companies and other individuals and entities involved in the title and closing processes), according to FinCEN>
FinCEN’s analysis of BEC incidents specific to the real estate sector include the following findings:
- The most common victims of impersonation were individuals and entities involved in the title and closing processes within a real estate transaction.
- Money mules were often involved in the movement of funds following these incidents.
- Nearly 88% of all incidents involved initial transfers of fraudulent funds to accounts at U.S. depository institutions as opposed to accounts outside the United States.
- Fraudsters engaged in multiple types of fraud and used the same accounts to receive funds from these acts as the accounts used to receive funds from real estate BEC scams
- In several incidents, illicit funds quickly moved from bank accounts to online payment platforms, or were used to purchase convertible virtual currencies, most commonly in the form of bitcoin.
“This analysis is just another example of how BSA filings make a difference in the lives of many, many people by providing crucial information that helps to alert the regulatory and law enforcement communities to trends in illicit activity, making our communities safer,” said Himamauli Das, FinCEN acting director.