Beware: mortgage scams

Warning to be alert for certain types of transaction by which fraudsters attempt to obtain unsecured finance

The Journal, March 2005, page 48

Bruce Ritchie, Director of Professional Practice at the Soicety, recently wrote to all money laundering reporting officers with this warning:

Our attention has been drawn by a firm of solicitors to a number of transactions where fraudsters have obtained mortgage finance over unsecured properties by purporting to be the proprietors. In each case the fraudsters have obtained extracts of the titles either by way of a substitute land certificate or extract sasine titles. They have taken these extracts to a solicitor with whom they have no previous connection and usually in a town other than the town in which the property is located.

In each case they have produced driving licences and utility bills by way of identification, although it now transpires that the driving licences would appear to be extremely clever forgeries. The properties were unencumbered and the funds were deemed to be required either for the purchase of a property abroad or for refurbishment of the existing property. It is likely that the real owners of the properties are working abroad and that the properties were tenanted out, which would have enabled the fraudsters’ access to them for the purposes of having surveys carried out.

In two of the four cases the solicitors received signed mandates from the purported owners for the funds to be telegraphically transferred to a third party. In the other two cases the funds were transferred to the individuals’ bank accounts, which would appear to have been fraudulently set up for that purpose.

Please ensure that all relevant partners and staff are alerted to the dangers of accepting such instructions. If your firm are approached with such a proposal, you should decline to act and report the circumstances to NCIS.