Fradulent Document Recording: Background

Over the past several years, there has been an increase in the number of fraudulent property transfers occurring in the City. Many incidents of this type of fraud occur in distressed neighborhoods. Abandoned and temporarily vacated properties are fertile grounds for individuals interested in engaging in this type of activity. In the recent past, a well-structured group formed to commit this type of crime. It works in this way: One individual drove around the City looking for abandoned properties. Once they were identified, another individual would obtain copies of recorded deeds. Yet several others actually typed new deeds using some of the required information from the previously recorded deeds. The individuals would then present the documents to a notary public who is responsible for validating the identity of the individual signing the deed. The process would be completed when the document was presented to the Records Department for recording. Of course, this activity need not be conducted by a group but can also be conducted by individuals.

The group or individuals may also purport to sell the properties in question to individuals who are not aware of the scam. These individuals pay money to the criminals with the expectation of owning property. However, since the criminals are not the legal owners of properties, the sale and transfer are not legitimate. The bottom line is that the victim loses the money paid to the criminal, and, it may not be possible for the victim to recover the money so spent. Additional loss is incurred if the victim has invested money in renovating the property. This also may not be recoverable. In some cases, perpetrators of crime, while not transferring property ownership by recording deeds, obtain loans and record mortgages against properties they do not own. When this occurs, the legal owner of the property will need to take action to have the record cleared.

The message to communicate is two-fold: programs such as the Neighborhood Transformation Initiative (NTI) play an important role by reducing the potential for fraud by reducing the number of abandoned homes; and, it is important for community groups and members of the public to be vigilant and watchful in their respective neighborhoods in an effort to deter such activity.