Kent County Clerk/Register of Deeds Lisa Posthumus Lyons is cracking down on property fraud with the Fraud Notify system, a free online tool that alerts subscribers via email to potential mortgage fraud and property and identity theft.
Property owners can thwart such deceit by subscribing at
accesskent.com/fraudnotify.
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CourtesyThomas W. Cronkright II, CEO of Grand Rapids-based Sun Title
This is a crime that’s causing financial heartache across the nation, and Kent County is no exception, according to Thomas W. Cronkright II, CEO of Grand Rapids-based Sun Title, a licensed attorney and executive chairman of CertifID, a technology platform designed to safeguard electronic payments from fraud.
“It has grown to be the fastest form of real estate fraud,” says Cronkright, who works with law enforcement and the Greater Regional Alliance of Realtors Realtors to stem the tide of property fraud. “I think it’s because it’s very easy to do.”
According to Cronkright, there were roughly 25 cases in 2023 of property fraud in Kent County. So far this year, there have been over 40. The financial loss is distressing.
Scale of schemes not known
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CourtesyLisa Posthumus Lyons
And the sobering truth, according to Posthumus Lyons, it’s not known how far-reaching filing fraudulent deeds has become, making the Fraud Notify system all that more vital.
“We really don’t have a full grasp of the magnitude of this problem simply because we don’t know a property is fraudulently claimed until the rightful owner goes to make a claim on that property,” says Posthumus Lyons. “That’s when property owners realize there’s been fraudulent activity going on in their property. And so we don’t have full numbers. We do know that around the country there’s been over 12,000 individuals who are the victims of property fraud, title theft that equates to $350 million.”
The Kent County Register of Deeds defines property fraud as when someone records a fraudulent document at the county land records office, making it appear as if they own property that is not legally theirs.
The actual owner doesn’t know of the crime committed against them until they attempt a transaction on their property, which could be years later.
The Fraud Notify system allows property owners to take legal action sooner
.
“Once they get notified by our fraudulent advice system, that gives them the information to go to law enforcement,” says Posthumus Lyons. “They’ll investigate that situation and then it goes through the criminal justice system.”
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CourtesyKent County now has Fraud Notify available to property owners.
Victimized by fraud
Cronkright himself has been a victim of wire fraud. In 2015, Sun Title received an order for title insurance for a gas station in Southeast Grand Rapids.
The property owner sent Sun Title the purchase agreement and requested its services to insure the transfer and handle the escrow and settlement of funds.
Sun Title, in turn, received a cashier's check from the buyer for $185,000. After due diligence was complete, Sun Title was directed to transfer $180,000 of that amount to the seller as non-refundable earnest money.
Cronkright’s business deposited the $185,000 check into its escrow account, where it remained for a few business days. Then it received the wiring instructions and confirmed with its bank that there were no issues with the check. Everything looked good and the money was wired to an account in New York. After the check had been in the banking system for four days, Cronkright learned the check bounced.
“So, it was identity theft on the part of what we thought was a legitimate buyer but whose identity was stolen, and that led us to civil litigation to get the money back,” recalls Cronkright. “The (investigation) uncovered Nigerians in Texas who were running a blackjack syndicate in North America and it disassembled what was a $3 billion scam over a five-year period. It was incredibly intense. There were safety concerns for witnesses (during the trial), so there was protective detail involved.”
That unsettling experience launched the technology platform, CertifID, that protects and prevents electronic payments from fraudsters.
More details can be found at
https://www.certifid.com/article/the-story-of-certifid.
Huge burden for victims
Most often, once the ownership is fraudulently altered, the thief then sells the property. Not only is the victim robbed of what is likely their greatest financial asset, but they are then left with the outstanding debt of any mortgage on the property and must navigate through the legal and criminal justice system at great expense, according to Posthumus Lyons.
“When we get deeds that are recorded in our office, we have no ability or expertise to determine what is a fraudulent document these individuals will create,” says Posthumus Lyons. “With our local Realtors association, these individuals will present themselves as the property owner with an ID and owner authorization and all the elements required.”
The fraudulent sale of title claims averages $130,000, which Cronkright says makes the cost of a full investigation less likely.
“That’s still a lot of money, but when you think of the bandwidth that it would take to open up a full investigation and prosecution, it just doesn’t hit that threshold because of competing priorities that local or federal law enforcement would have,” he says.
“The other challenge is, when you own a vacant piece of property, you’re not showing up for dinner every night there nor are you driving by it on a regular basis, so you wouldn’t be notified unless somebody notices a (for sale) sign in the yard or by something like Kent County just implemented: the Fraud Notify
system.”
Paul R. Kopenkoskey has been a freelance writer for more than 30 years. The Calvin University grad has written for many West Michigan publications and he has sat in the editor’s chair for three monthly magazines. His first historical fiction novel, Karl Beguiled: A Journey of Hope and Sacrifice, is available on Amazon.com. He can be reached at [email protected]