'Bizarre' scam targets vacant property owners

Jun. 30—BEULAH — Paula Eberhart, Benzie County's register of deeds, is accustomed to speaking at county commission meetings — though her updates have never before come with a story quite like this.

One with riverfront property, out-of-state owners, a probable scammer with a Cayman Islands passport and nefarious plans ruined by luck.

"The other day we had some customers come in," Eberhart told commissioners this week. "And they'd pulled into their property in Honor on the Platte River, and there was a realtor sign in the drive."

The property is wooded and vacant, the owners live out of state and were not selling, Eberhart said, so they thought it must be their neighbors' sign, just misplaced.

"But, lo and behold, it was their property for sale," Eberhart said. "It's the first attempt at property fraud in the county that I'm aware of."

The real property owners — who Eberhart declined to name, citing privacy issues — had no idea their property was listed and, by luck, showed up before any sale could go through.

But officials said the scam, called seller impersonation fraud, is a real estate swindle popping up in northern Michigan and across the country.

"The common denominator is it's vacant land and the property owners don't live there," said Jennifer Grant, register of deeds for Leelanau County.

According to the American Land Title Association, it works like this: Fraudsters impersonate property owners in order to illegally sell commercial or residential property, and sometimes they even use the real property owner's social security and driver's license numbers. The American Land Title Association has a guide on the scam at alta.org.

Grant said she's aware of at least four attempts of seller impersonation in Leelanau County, and staff with register of deeds offices in Grand Traverse and Kalkaska counties said they'd heard of attempts in their counties, too.

"It's bizarre and it's happening everywhere," said Jo Ann DeGraff, Kalkaska County register of deeds. "We're seeing this one, plus letters about home warranty scams that say you need to sign up for this and it's your final warning."

Counties in Michigan don't offer home warranties, and financial organizations and the Federal Trade Commission have alerted property owners and issued consumer alerts about the potential for abuse in the home warranty business.

So far, no fake listings have resulted in sales in northern Michigan, as far as staff with area register of deeds offices are aware.

Though in the Platte River case, the listing was temporarily included in MLS, a national free real estate database, but has since been removed.

Federal court records show, at its most extreme, the seller impersonation scam can involve seven-figure deals and lengthy legal filings.

In Connecticut, for example, the FBI is investigating after a developer built a $1.5 million home on property a Long Island doctor said had been in his family for seven decades — and they never listed it for sale.

Both the developer and the attorney who handled the fraudulent sale, said they, too, were victims of seller impersonation fraud, by a scammer with a South African address using what the FBI called a Florida "money mule."

A money mule is someone who knowingly — or sometimes unknowingly — allows criminals to use their bank account, to access or transfer money originating from a scam.The same money mule, the FBI said, was involved in a similar fraud in Rhode Island.

Eberhart said the fake seller in the Platte River case used an expired Cayman Islands passport for ID and convinced a Manistee real estate agent to take the listing. There were interested buyers but the actual owners just happened to show up in time to put a kibosh on the deal.

The Platte River property, 1.4 acres, was briefly listed by Jeff Pyciak for $149,000, records show. Pyciak didn't return requests for comment Thursday or Friday.

Benzie County Sheriff Kyle Rosa said his office looked into the incident, but no property deed was altered and no money changed hands.

"In this case, there wasn't anybody who fell for anything, except maybe the Realtor and that's really disheartening," Rosa said.

Rosa advised anyone who sees a "For Sale" sign on property they own that is not for sale to contact the Realtor first — it could be an honest mistake and not a scam.

If they're still concerned, then they should contact local law enforcement.

In the meantime, Rosa and staff with area register of deeds offices, urged people to sign up for their county's free property notification tool.

Antrim, Benzie, Grand Traverse, Kalkaska and Leelanau counties all have versions of the tool, as do many other counties in Michigan, and DeGraff explained how it works:

Property owners sign up online through their county's register of deeds website, under their name.

Antrim County Register of Deeds Patty Niepoth recommended using every version of their name, including common misspellings, that might be in use.

The service is free and often is part of a county's own purchased software, not a third-party product that property owners have to buy.

"It will notify you, not just about potential fraud, but whether your mortgage has been paid off, whether there's been a gas and oil lease extension and it notifies you within 24 to 48 hours," not in six months, when you realize you haven't received a property tax bill and when it might be too late to stop, DeGraff said.

But Eberhart acknowledged this tool would not have alerted anyone to the Platte River listing because nothing was ever registered with her office.

"I'm just hoping that neighbors are looking out for neighbors," she said.

"If you see something next door that doesn't look right, maybe it's not."