Wire Fraud Home Construction

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wire fraud and the home construction industry

Wire Fraud Takes Aim at Home Construction Industry

Wire fraud is growing its range of targets. The homebuilding industry increasingly in its crosshairs, according to this new white paper published by CertifID.

Background

Consequently, Thomas Cronkright II and Lawrence Duther wrote a white paper entitled “Wire Fraud Begins To Hammer the Construction Industry.” Cronkright II and Duthler co-founded CertifID and are anti-fraud technology developers.  According to the paper, wire fraud may have been the culprit for as much as $1 billion in losses in 2017. The National Home Builders Association via the Western Michigan Home Builders association provided and supported these statistics.

White Paper Details

Here, the white paper details three actual frauds perpetrated on home builders, illustrating how fraudsters prey upon the builders. Using stolen details about a transaction, criminals send false payoff letters, open bank accounts in the name of a developer or use identity spoofing.

Expert Analysis

Without reservation, Cronkright cautions that wire fraud is “a threat to a much larger universe than the title and settlement industry,” as evidenced by the latest numbers on builder losses.

“While the title industry—thanks in large part to ALTA’s continued efforts to raise awareness—may be a key flashpoint for the earliest cases of wire fraud, all parties are vulnerable,” Cronkright said. “Today, we’re seeing where builders can be targeted. But lenders, originators, investors, even, if indirectly, Realtors, are all on the hook in the long run.  We strongly believe all elements of the greater housing, real estate and mortgage industry need to join the fight against wire fraud as it continues to grow.”

Learning From Past Experience

In the past, wire fraud victimized Cronkright II and Duthler while they were co-owners of a Michigan-based title agency. However, they were able to recover most of the stolen funds, which inspired them to develop CertifID’s authentication technology.

Courtesy of American Land Title Association and CertifID.

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