True Crimes in Real Estate continues with the Case of the Phantom Owner.
As stated in earlier articles, not all real estate crimes are the results of unknown or stranger persons. Some are by renters, some by real estate personnel and some by owners. This true-life case details how one owner pulled off two scams.
The Case of The Phantom Owner
It is alleged, has not been proven in court, that the “owner” would enter a property that was in foreclosure. He would fix up the property and rent it out. When I say fix up I mean just cosmetics. The property would already be in good condition with utilities intact.
The tenant would find out the hard way that the “owner” did not have the right to rent the property. Because he didn’t own it. Gone is the tenant’s money. This case is supposedly in court, I don’t know about that. What I do know is the scam he is accused of doing is on my block.
Scam #2
One day I walked outside to find flyers on all the cars and trees on my block. The read, “Warning the owner of (Address withheld) stole my money.” It described the owner as a crook and not to be trusted.
I found this peculiar since I had not seen the owner for quite a while. I knew the owner to be a woman, not a man. A talk with my next-door neighbor confirmed that the owner was someone he knew. He felt that this could not be true. After all, he knew this man–not–woman–to be a good person. Hmmm… Man not woman, the plot thickens.
One Month Later
Fast forward a month or so. The rumors of the fast-dealing owner have gone nowhere. No information can be found neither can the owner.
It’s a warm night. A car pulls onto the street. A young lady gets out, she goes to the darkened house. She knocks on the door and waits. Her male friend waits by the car. After a while, she comes across the street to my house. I guess because I’m the only one outside. She asked if I had seen anyone at the house. I told her no. I didn’t think anyone lived there, I never saw any activity.
Scammed
She begins to explain how the owner scammed her. Weeks earlier he met her at the house to show an apartment. He explained that the lights were out because he just evicted the tenants from the entire building. Con Ed had turned off the power because of the non-payment of the bills.
He showed her around and she liked the apartment. The owner told her that others were coming by to see the apartment. If she wanted it she needed to leave a deposit. She didn’t have any money on her and she wanted to look at other apartments. He was okay with this and they departed company.
After some time she decided that this was the place for her. The rent was reasonable and it was still available. She saved up her money and made the 1500.00-dollar deposit.
Red Flag Alert
The owner did not give her a receipt. He claimed he didn’t have his receipt book. Even though he knew she was coming by. He told her that when she returned to take possession of the apartment she would get the lease, keys, and a receipt. She was to bring one month’s rent upon her return.
When she returned with the one month’s rent she could not find him. When I met her it was her third trip to the house. Angry and frustrated she really wanted to do damage to the house but she remained calm.
I told her to file a complaint with the DA’s office and hope that they looked into it. She told me about the other victims she found online. The person that originally posted the flyers were still gunning for this guy, good for her. I advised her to join up with this person and any others. Then file a joint complaint. Get a lawyer and pursue this case.
Update
It is years later. There are people living in the house. I think the owner is there too. I’m not sure because I never met him. Beyond that, not much is known. What happened in the first case, unknown. Was he prosecuted in the second case? Again unknown.
What is known is that the injured parties did the best they could. In the second incident, one person went online to verify homeownership. She did her due diligence. If that were enough we wouldn’t be having this conversation. Sometimes no matter what you do the bad guys win. But you can sway the odds in your favor.
Reviewing the 2 scams
In reviewing both scams one mistake stands out. The lack of a receipt. This is a red flag. In what business transaction would you give up 1500.00 dollars without a receipt?
A scammer looks for you to go against your better judgment. Under normal conditions, the young lady might not have paid 1500.00 dollars without a receipt. But faced with losing the apartment she decided to take the risk. This is what the scammer looks for, that moment when you are willing to ignore that bad feeling.
The Role of the Agent
Had either of these people had representation the outcome might have been better. There is no guarantee that the agent would have fared better. Just an increase in the odds against being taken.
Scam 1: Phony Ownership
In the 1st scam, a check of ownership of the property would reveal who the true owner was. The scam would be stopped in its track. When someone tried this on me, I verified the ownership. Then I contacted the owner, told him what was going on. I gave him all the information I had on the scammer. An email to the web page host got the ad removed.
Scam 2: Deposit Ripoff
Scam 2 is like the improper use of the rental application fee story. But with a twist. The owner is the crook and the stakes are higher. 1500.00 dollars to be exact. How many times did he pull this off before he got caught? Two, three, ten. I’ll never know.
It may have been one less time had an agent been involved. Red flags were popping up if you knew where to look.
- Con Ed turned off the entire building for non-payment of bills?
- The hallway and basement electricity is the owner’s responsibility.
- All the tenants of the four-family building did not pay their electric bills?
- No receipt, no cash. A receipt can be written on any piece of paper.
- Time to check ownership, building dept records, etc.
The Art Of The Con
The art of the con is; you don’t want anyone that knows what they are doing looking too closely at you. Agents, good agents look closely. Oh sure, things can get past us. But we work hard to make sure that doesn’t happen. The real estate con artist knows this. The last person they want to see with the mark is an agent.
Disclaimer
Disclaimer: I am not a lawyer and nothing stated here is legal advice. This article applies to the five boroughs of New York. All information deemed accurate but not guaranteed. Always check the real estate laws in your part of the country.
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