Real Estate Buyers Beware of Fraudulent Wire Transfer Instructions

Email Fraud and Real Estate Closings

Email fraud in Pennsylvania real estate transactions poses a cruel risk to innocent buyers. And email fraud connected to real estate closings is alarmingly on the rise. The FBI, national title companies and real estate advisers are warning buyers to confirm emailed wire transfer instructions with the settlement agent who is running their closing.

The Scam

The email scam is sophisticated, often successful and increasingly common.

It works like this. Hackers identify email accounts of real estate agents, brokers or other companies involved in real estate closings. Then they hack directly into the accounts and find emails relating to pending closings. Using the chain of emails already sent to a buyer by the realtor or other participants in the closing, the hackers are able to send a very convincing email to the buyer with false wire transfer instructions. The buyer readily accepts the instructions because he or she has already received emails from the apparent sender—  and the hacker’s email contains specific, correct information about the closing and about the property.

The fraudulent instructions direct the buyer to wire monies to an account controlled by the hacker. After the buyer wires the funds, the account is emptied instantly by the hacker.

Protect Yourself

How can a buyer protect against this fraud?

First, the buyer probably has previously received escrow instructions or other preliminary information that identifies the bank where funds will be deposited before closing. Buyers must review their paperwork before following emailed wire instructions. Often fraudulent wire transfers call for transfers to a bank some distance away from the town where the closing is scheduled.

Second, and far more importantly, buyers must speak directly to the settlement agent, by telephone or even in person, and review emailed wire instructions thoroughly before wiring funds. Given the existence of this hacking scheme, buyers simply cannot rely on emailed wire instructions.

Hacking is Common

Sony, Target and the United States Office of Personnel Management have been thoroughly hacked. It’s not wise to assume that the same can’t happen to real estate agents and title agents. Everyone involved in real estate closings must confirm wire transfer instructions by speaking with a responsible person involved in the closing to confirm the bank and account number in to which the funds should be wired.

Impacted? Act Quickly

And for those who are victimized by this scam, it is imperative immediately to cancel the wire transfer with the victim’s sending bank, in writing, with detail that the transfer was fraudulently induced. Equally quickly a scammed buyer must notify the receiving bank in writing that the transfer was fraudulently induced, and instruct the receiving bank to hold the funds pending further investigation. It may be impossible to reverse a fraudulent wire transfer, but a reversal can only occur if prompt written notice is given to both banks. Finally, prompt notice to the regional FBI Office can help stop the movement of funds.

 

Driver’s License Suspension for Failure to Pay Ticket

Driver’s License Suspension for Failure to Pay Ticket

A Pennsylvania man unexpectedly lost his driver’s license when he failed to respond promptly to a traffic ticket. Burgess v. PennDOT, 991 A.2d 1014 (Pa. Cmwlth. 2010).

The man’s problems started when he was cited for speeding and driving an unregistered car. The law enforcement agency didn’t arrest the man, but mailed him a citation after the incident. When he failed to respond to the citation, PennDOT sent the man a letter advising that he would lose his driver’s license in 20 days if he did not respond to the citation immediately. The man did not respond to the citation within the 20 days. Instead, two months after receiving the notice about losing his license, he pled guilty to the citation and paid the fine.

PennDOT then suspended his license for an additional 15 days, because he was convicted of a moving violation while his license was under suspension. The moving violation was the original speeding and driving an unregistered vehicle citation. His guilty plea amounted to a conviction.

The man appealed the additional 15 day suspension of his license, claiming that by pleading guilty to the citation for speeding and driving an unregistered vehicle he was effectively responding to the citation and his doing so should have ended the first suspension. He argued that PennDOT should not be permitted to treat his “conviction” as having occurred during a period of license suspension.

The man lost his appeal. License suspensions do not end in automatic restoration of drivers’ privileges. When Pennsylvania drivers lose their driving privileges due to traffic tickets, DUI charges, failure to pay past fines or for any other reason, they must complete a “restoration” process before their privileges are restored. Drivers who simply assume that they can drive legally at the end of their suspension period are mistaken. To start the restoration process, a driver can request a free restoration letter from PennDOT by calling (800) 932-4600. The letter is also available at no charge through an online request to PennDOT at www.dot.state.pa.us. Follow the menu on the first page headed “On-line Driver and Vehicle Services.” A restoration letter advises the suspended driver of everything he or she must do to become a legal driver again. Those conditions may include resolving previous open citations, paying fines and going through driver education and testing again.

Operators of County Nursing Homes Liable for Nursing Home Neglect

Nursing Home Neglect in County Nursing Homes

State and local governments are cloaked with broad immunity from private lawsuits. While many exceptions to state and local governmental immunity exist, they tend to be narrow and technical. Governmental immunity doesn’t protect only government agencies; it also often extends to government officials, employees, and volunteers. But where a County‑owned nursing home is operated by a private corporation, the County’s governmental immunity does not protect the private corporation from suits for its negligence.

The family of an elderly woman who died after having suffered severe neglect in a county nursing home sued the private company that had contracted with the County to run the home. Noting that the private company’s contract with the County gave the private company control of the nursing home and required that the private company “ensure that the facility was properly staffed, equipped, trained and prepared to deliver care to the residents,” the Pennsylvania Commonwealth Court agreed that the private corporation was an independent contractor and was not operating as part of the county government.

In fact, the private company was a for‑profit company that operated nursing homes in several states. Refusing to extend governmental immunity to private individuals or corporations that contract to provide services for government entities, the court found that where a private corporation acts for profit and exercises independent management control, it is liable for its negligence.

Any private company considering a business venture of any kind with a governmental entity or agency must assume that it will not enjoy governmental immunity. Before anyone injured by a governmental activity assumes that immunity applies, he or she should more thoroughly review the actual identity of the parties involved: When independent contractors act on behalf of government, immunity sometimes disappears.

Take Me Out to the Ball Game – Injuries During Baseball

Who is Liable for Injuries During Baseball Games?

Spectators at baseball games assume the risk of a variety of injuries—balls and even bats sometimes hit fans and can cause serious injuries. A Phillies fan who tried to get around the law of assumption of the risk struck out when the Pennsylvania Superior Court threw his case out of court.

The spectator suffered a serious eye and head injury when he was hit by a ball thrown into the stands by a Phillies center fielder. The center fielder intentionally tossed the ball into the stands at the end of an inning, to serve as a souvenir for a lucky fan. Unfortunately, no fan caught the ball, and the injured spectator sued, claiming that while he assumed the risks associated with the play of the game, he did not assume the risk of being hit by a ball intentionally thrown into the stands.

The court disagreed. Because fans routinely arrive early for batting practice in hopes of retrieving an errant baseball as a souvenir and fans routinely clamor to retrieve balls landing in the stands via home runs or foul balls, the court found that many risks occur at baseball games in connection with souvenir balls. The court also observed that both outfielders and infielders are known to toss caught balls to fans at the end of an inning.

Pennsylvania law provides that even first‑time attendees at sporting events are presumed to know all of the customary risks that come from sitting in the stands. Those risks are not confined to events that take place during game play but include just about anything that can and does happen at a sporting event.

Don’t Sell Your Structured Settlement

Don’t Sell Your Structured Settlement

A structured settlement is a completely voluntary agreement between an injured person and the insurance company obligated to pay for the negligent conduct of the person or company that caused the victim’s injuries. In a structured settlement, an injury victim doesn’t receive compensation for his or her injuries in one lump sum. Instead, the victim receives a stream of payments, sometimes over many years, that are designed to meet future medical expenses and basic living needs.

A long‑term structured settlement provides guaranteed long‑term income and can help a victim avoid having to make decisions about how to invest a large personal injury settlement. Long‑term structured settlements also prevent a victim from overspending upon receiving a large settlement. After a federal law granting favorable tax treatment to structured settlements was passed in the 1980s, structured settlements became increasingly popular in personal injury cases.

This fairly sudden popularity spawned an industry that now purchases structured settlements from victims. Because structured settlements don’t give victims all their settlement money up front but instead promise steady income over future years, victims sometimes become impatient and sell their structured settlements.

Search the Internet for “structured settlement,” and you may find more sites for businesses looking to buy structured settlements than sites sharing information about establishing such settlements. Unfortunately, companies buying structured settlements may offer an immediate purchase price payment of as little as 25% or less of the value of the total long‑term payments owed to the injury victim. And such companies sometimes seek out injury victims and offer to purchase their settlements. Once an individual or company has purchased a victim’s structured settlement, the victim loses the right to collect all future payments. All of the future payments become the sole property of the purchaser.

Because selling a structured settlement often operates to the complete economic disadvantage of an injury victim, many States have recently passed new consumer protection laws strictly regulating the sale of structured settlements. Pennsylvania’s consumer protection law, passed in 2000, prohibits the sale of a structured settlement without judicial approval. When a Pennsylvania injury victim considers selling his or her structured settlement, he or she must file a petition with the local court, asking for approval. Most entities that purchase structured settlements offer to provide the lawyer and initially carry the cost of getting the judicial approval.

Sometimes, depending on the exact terms of the structured settlement, the insurance company that is paying the structured settlement must agree to or approve the sale. The petition must include a “disclosure statement” provided by the individual or company seeking to buy the structured settlement. This disclosure statement must add up the dollar value of all the future payments owed to the victim under the existing structured settlement and must compare that value to the exact amount of money that the victim will actually receive for selling the structured settlement.

Judges can and do withhold approval if the sale is not in the best interests of the victim or his or her dependents. And judges don’t even have to schedule a hearing—they have the power to deny the sale if the petition doesn’t recite good factual support for the sale. Any sale of a structured settlement that does not go through the judicial approval process has been declared by Pennsylvania law to be illegal and an unfair trade practice and is thus subject to the substantial penalties of the Unfair Trade Practices and Consumer Protection Act, a separate law.

While it is certainly possible to sell a structured settlement for a fair price, Pennsylvania lawmakers have wisely recognized that all too many such sales sadly undercompensate injury victims. If you are considering buying or selling a structured settlement, be sure you follow the strict requirements of the law and secure judicial approval first.