Wire Fraud Takes Aim at Home Construction Industry
June 12, 2018
Wire fraud is growing its range of targets, with the homebuilding industry increasingly in its crosshairs, according to a new white paper published by CertifID.
“Wire Fraud Begins to Hammer the Construction Industry” was recently produced and written by anti-fraud technology developer Thomas Cronkright II and Lawrence Duthler, co-founders of CertifID. According to the paper, wire fraud may have been the culprit for as much as $1 billion in losses in 2017, as supported by statistics made available by the National Home Builders Association via the Western Michigan Home Builders Association.
The white paper details three actual frauds perpetrated on home builders, illustrating how fraudsters prey upon the builders. Using a few sensitive, stolen details about a pending transaction, criminals send convincing yet false payoff letters, open bank accounts in the name of the targeted developer or employ a technique known as identity spoofing.
Cronkright cautions that wire fraud is “a threat to a much larger universe than the title and settlement industry,” as evidenced by the latest numbers on builder losses.
“While the title industry—thanks in large part to ALTA’s continued efforts to raise awareness—may be a key flashpoint for the earliest cases of wire fraud, all parties are vulnerable,” Cronkright said. “Today, we’re seeing where builders can be targeted. But lenders, originators, investors, even, if indirectly, Realtors, are all on the hook in the long run. We strongly believe all elements of the greater housing, real estate and mortgage industry need to join the fight against wire fraud as it continues to grow.”
Cronkright and Duthler are also co-owners of a Michigan-based title agency, were themselves victimized by wire fraud in the past. They were able to recover most of the stolen funds, which inspired them to develop CertifID’s authentication technology.
Contact ALTA at 202-296-3671 or [email protected].