Fraudulent Home Sales in Texas

Fake Deed Ring Run From Prison?

On the heels of the Philly Fiasco, property thieves in Texas have gone from the ridiculous to the preposterous.

A Texas man has allegedly been performing deed fraud from prison, where they are currently serving 10 years on deed fraud they committed before they went to prison.

How Easy is It?

We took a closer look and found that it’s too easy and no one has wanted to take any responsibility to ensure the records are correct.

The division of Property Records says that it is not their duty. They claim that without a significant increase in staffing and funding that trying to stop fraud would bring the home buying process to a standstill.

There’s no way for us… to determine if it’s a clean deed or a dirty deed.

Dallas County Clerk John Warren

So, who does not pass the buck? Everyone is trying to put the blame on title companies, but title companies can only go on public records. If the records are wrong, it stands to reason the title search will be wrong as well.

How did This Happen?

Shell companies, forged documents, paying off homeless people, others claiming they were duped, and truthfully, who knows what else at this time.

The 23 year old offender said it was simple, after they pled guilty to 25 counts of theft.

But, according to officials, that has not stopped them. They are now alleged to have done at least nine more fraudulent closings behind bars.

They have been alleged to mail fraudulent titles from jail to the County Records Office. We understand that people do need to get documents notarized while they are in prison.

But, maybe we might want to give these documents a little more scrutiny?

Will Emerging Technology Like RON and the Blockchain Fix This?

No. No it won’t.

There are several startups claiming that digital nature will provide more security, and the new tech super system, the blockchain will prevent cases of fraud.

Don’t fall for the hype.

As we reported earlier this year, at least one RON signing was used to steal a home in Philly. We mentioned inherent security flaws in remote online signings, but did not go into depth. We won’t here either, but expect an article on it soon.

In the short term, remote notarizations are likely to lead to more fraud. What is going on off camera can be more important than what is recorded on the webcam. We are hearing about facial recognition and all kinds of things to validate ID. These are not ready now. They are a hope to prevent fraud down the road.

And they may not even be good ones.

What About the Blockchain?

The blockchain, made famous by Bitcoin, and the web’s new data security savior. It is alleged that it cannot be broken, it cannot be used to commit fraud, and it preserves all records in a way to allow complete accounting until the end of time.

In other words, it is the Harry Potter of computing.

The problem cities and states are having is because of bad records. In computing they have a saying, bad data in, bad data out. The government already stores records, many being publicly available.

These fraudulent sales are only being caught after the fact. How will the blockchain prevent that?

There is nothing in the blockchain to prevent bad records from being added. Just to prevent editing those records after the fact. You know, like the publicly recorded documents already do. The ones that are providing evidence to law enforcement to make these arrests.

Another touted feature is real time analytics, to spot people doing a lot of purchasing. But, many investors already buy each home under a different company name or trust, so the question is a lot harder to answer than simply searching for names.

And the accused had no problem using bank officials to back stop the fraud. Under what system is a real estate document signed by a mortgage official going to raise a red flag? Even if it is forged.

There are a lot of great things about the blockchain, but it is most likely not the panacea that we have been hearing about.

The Feds Are Fed Up

Though no specifics have been revealed, federal law enforcement agencies are putting together a task force to help stop the acts.

Federal and local law enforcement agencies across the county will work together to investigate these cases more thoroughly and more quickly, stopping the damage earlier, cutting off these schemes, and hauling these criminals out into the daylight. We will also identify solutions to make it harder to cheat the system, to protect future would-be victims.

Dallas County Assistant District Attorney Phillip Clark

Where Do We Go from Here?

The fact is notaries are getting tied up in all of this. From Philly to Kansas City, to Texas and probably beyond.

Some are completely fraudulent and some notaries claim they were duped. But either way, the real ones are getting caught in the middle, and even being on the periphery of a criminal allegation can be enough drive you up a wall or damage your reputation.

That is one reason we do our best not to name names. The fact is that reputable notary names, as well as companies are being throw around.

So, where do we go from here?

Maybe it is time that you make sure your local representative(s) hear what you have to say about how to improve the system.

After all, no one has more experience and knowledge on this topic than you do.

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