On March 30, 2023, FinCEN published a Financial Trend Analysis on patterns and trends identified in Bank Secrecy Act (BSA) data relating to business email compromise (BEC) in the real estate sector in 2020 and 2021. The report contains relevant information for the public, particularly individual homebuyers and the multiple entities involved in real estate transactions.
FinCEN Acting Director Himamauli Das said the following in a statement:
“FinCEN’s analysis indicates that individual homebuyers suffer disproportionately from incidents of business email compromise in the real estate sector. This analysis is just another example of how BSA filings make a difference in the lives of many, many people by providing crucial information that helps to alert the regulatory and law enforcement communities to trends in illicit activity, making our communities safer.”
Through BEC, scammers target businesses and financial institutions that routinely conduct large wire transfers and rely on email for communication regarding the wires. FinCEN’s analysis of BEC incidents specific to the real estate sector revealed the following:
The most common victims of impersonation were individuals and entities involved in the title and closing processes within a real estate transaction;
Money mules were often involved in the movement of funds following these incidents;
Nearly 88% of all incidents involved initial transfers of fraudulent funds to accounts at U.S. depository institutions as opposed to accounts outside the United States;
Fraudsters engaged in multiple types of fraud and used the same accounts to receive funds from these acts as the accounts used to receive funds from real estate BEC scams; and
In several incidents, illicit funds quickly moved from bank accounts to online payment platforms, or were used to purchase convertible virtual currencies, most commonly in the form of bitcoin.
FinCEN emphasizes the critical role of timely reporting of cyber-enabled crime to enable FinCEN and law enforcement to interdict, freeze, and recover funds stolen through cyber-enabled fraud, such as BEC, through FinCEN’s Rapid Response Program (RRP).
Read FinCEN’s press release here.
The Trend Analysis can be found here.