FIRPTA Friends Beware!
FIRPTA Friends Beware!
Recently, our company was approached by a Norwegian citizen, looking to sell a property in the Cape Coral area. As a foreign seller of US real estate, he was subject to FIRPTA, and required our assistance with all of the IRS required tax forms. During our initial interview process, he provided his Norwegian passport for identification purposes, gave us a Nigerian phone number for communication, and mentioned that he had a bank account in Singapore. While this information may seem innocent to the unsuspecting recipient, it was an immediate red flag for us.
We examined his passport copy again. It appeared to be legitimate. It had all of the usual security features, correct image size, and consistent fonts. Fortunately, Norway allows you to look up passport information online and sure enough, his passport was a fake. Between the stolen identity and a few other rookie mistakes, it was clear that this was not the real property owner. I immediately warned all of the parties involved and we agreed that it should be reported to the FBI.
Sadly, this was not our first encounter with a foreign imposter. In fact, this is our 6th case this year alone. I reached out to some industry colleagues to see if these were isolated events. I was troubled to hear from many of the title companies that we work with, that these types of fraudulent sales are happening on a daily basis.
In an effort to combat these fake transactions, here are some tips and red flags to look out for:
- Request proof of ID upfront – if you are not trained to spot forgeries, send the copy to our office for review.
- Request to do a video conference call (Skype, Zoom, etc.) to confirm the person's identity. If they don’t agree to a video call, that may indicate a problem.
- Compare addresses and phone numbers. If the deed says they live in Germany but their phone number starts with a different country code, that could be a warning sign.
- Send the seller a document for an electronic signature to get their IP address. Does it match the country they say they are located in?
- If you ever have a client tell you that they don’t care about FIRPTA, and don’t want their money refunded, that should be a HUGE red flag!
Some of these ideas may seem like a stretch but these criminals will stop at nothing to manipulate you. My hope is that these crime organizations get caught and the victims find a way to get their properties back. Until then, all we can do is spread the word, and be extra cautious and safe.
As always, if you have any questions please feel free to reach out.
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