<div dir="ltr"><div class="gmail_default" style="font-family:tahoma,sans-serif;font-size:small"><br></div><div class="gmail_default" style="font-family:tahoma,sans-serif;font-size:small">Of interest to the RPPT Section from a local Spokane title company.</div><div class="gmail_default" style="font-family:tahoma,sans-serif;font-size:small"><br></div><div class="gmail_default" style="font-family:tahoma,sans-serif;font-size:small"><br></div><div class="gmail_default" style="font-family:tahoma,sans-serif;font-size:small"><br></div><div class="gmail_quote"><div lang="EN-US" link="blue" vlink="purple"><div class="m_9190097647565014284WordSection1"><h3 style="margin-right:0in;margin-bottom:6.4pt;margin-left:0in;line-height:20.15pt;background:#fafafa"><span style="font-size:11.0pt;font-weight:normal"><span class="gmail_default" style="font-family:tahoma,sans-serif;font-size:small"></span></span><br>
<span style="font-size:17.0pt;color:#d11241">Fraud Alert: LLC Identity Theft<u></u><u></u></span></h3>
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<b><i><span style="font-size:10.5pt;font-family:"Arial",sans-serif;color:#333333">December 13, 2018</span></i></b><span style="font-size:10.5pt;font-family:"Arial",sans-serif;color:#333333"><u></u><u></u></span></p>
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<span style="font-size:10.5pt;font-family:"Arial",sans-serif;color:#333333">In 2017, title companies uncovered a large-scale national fraud scheme targeting distressed properties and borrowers. In the scheme, criminals would obtain information about a loan
in default or already in foreclosure. The wrongdoers then create and record fraudulent instruments related to the loan in the land records. The fraudulent instruments may vest title to the perpetrators, which can allow them to sell or refinance the property.<u></u><u></u></span></p>
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<span style="font-size:10.5pt;font-family:"Arial",sans-serif;color:#333333">This fraud has evolved over the past year.
<b><i>Criminals are now hijacking legitimate LLC real property owners by filing fraudulent annual statements of information with Secretaries of State, presenting fraudulent operating agreements, impersonating managing members with counterfeit identification
and obtaining hard money cash out loans. This is typically happening with free and clear vacant land, meaning the criminals disappear with the money.</i></b><u></u><u></u></span></p>
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<span style="font-size:10.5pt;font-family:"Arial",sans-serif;color:#333333">In many instances, the criminals are getting on the websites of Secretaries of State and modifying the statements of information online. Traditionally, title companies have relied on
the validity of Secretary of State filings to help confirm the managing member. This is not a safe bet anymore. In addition, many Secretaries of State are not reviewing statements of information to confirm that the last managing member shown on the previous
filing is the same as the latest filing. This basically allows anyone to hijack an LLC.<u></u><u></u></span></p>
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<span style="font-size:10.5pt;font-family:"Arial",sans-serif;color:#333333">“The bad guys are exploiting the hard-money space due to the focus on the collateral, not the borrower, and their tendencies to not meet the borrower and transact the loan online and
through email,” said Bill Burding NTP, executive vice president and general counsel of Orange Coast Title Company. “This allows domestic and overseas criminals to commit loan and title fraud.”<u></u><u></u></span></p>
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<span style="font-size:10.5pt;font-family:"Arial",sans-serif;color:#333333">Thus additional very careful scrutiny of the LLC is required, including a review of the entire SOS SI chain, comparing the date of the operating agreement to when they were incorporated
& purchased the property and require, as practical as possible, for the lender & escrow to deal with the principals in-person and not from a far.<u></u><u></u></span></p>
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<span style="font-size:10.5pt;font-family:"Arial",sans-serif;color:#333333">Red flags include:<u></u><u></u></span></p>
<ul type="disc">
<li class="MsoNormal" style="color:#333333;margin-bottom:4.5pt;background:#fafafa;box-sizing:border-box">
<span style="font-size:10.5pt;font-family:"Arial",sans-serif">Free and clear property<u></u><u></u></span></li><li class="MsoNormal" style="color:#333333;margin-bottom:4.5pt;background:#fafafa;box-sizing:border-box">
<span style="font-size:10.5pt;font-family:"Arial",sans-serif">Vacant land<u></u><u></u></span></li><li class="MsoNormal" style="color:#333333;margin-bottom:4.5pt;background:#fafafa;box-sizing:border-box">
<span style="font-size:10.5pt;font-family:"Arial",sans-serif">Cash out hard-money brokered loan<u></u><u></u></span></li><li class="MsoNormal" style="color:#333333;margin-bottom:4.5pt;background:#fafafa;box-sizing:border-box">
<span style="font-size:10.5pt;font-family:"Arial",sans-serif">Loan broker/lender never meets with principals<u></u><u></u></span></li><li class="MsoNormal" style="color:#333333;margin-bottom:4.5pt;background:#fafafa;box-sizing:border-box">
<span style="font-size:10.5pt;font-family:"Arial",sans-serif">Latest Secretary of State Statement of Information not executed by last managing member shown on the previous filing<u></u><u></u></span></li><li class="MsoNormal" style="color:#333333;margin-bottom:4.5pt;background:#fafafa;box-sizing:border-box">
<span style="font-size:10.5pt;font-family:"Arial",sans-serif">LLC operating agreement not executed at time of incorporation or purchase of property<u></u><u></u></span></li><li class="MsoNormal" style="color:#333333;margin-bottom:4.5pt;background:#fafafa;box-sizing:border-box">
<span style="font-size:10.5pt;font-family:"Arial",sans-serif">Loan documents emailed to borrower instead of delivered by title company-approved notary service<u></u><u></u></span></li><li class="MsoNormal" style="color:#333333;margin-bottom:4.5pt;background:#fafafa;box-sizing:border-box">
<span style="font-size:10.5pt;font-family:"Arial",sans-serif">Typographical errors<u></u><u></u></span></li><li class="MsoNormal" style="color:#333333;margin-bottom:4.5pt;background:#fafafa;box-sizing:border-box">
<span style="font-size:10.5pt;font-family:"Arial",sans-serif">Non-matching signatures<u></u><u></u></span></li><li class="MsoNormal" style="color:#333333;margin-bottom:4.5pt;background:#fafafa;box-sizing:border-box">
<span style="font-size:10.5pt;font-family:"Arial",sans-serif">Unknown terms<u></u><u></u></span></li></ul>
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<span style="font-size:10.5pt;font-family:"Arial",sans-serif;color:#333333">“If there are any red flags or discrepancies, the mantra should be to pump the brakes and slow the transaction down,” Burding said. “If you suspect fraud and before proceeding any further,
you should escalate the file to the underwriting and legal team immediately.”<u></u><u></u></span></p>
<p class="MsoNormal"><i>Link to the original article here: <a href="https://www.alta.org/news/news.cfm?20181213-Fraud-Alert-LLC-Identity-Theft" target="_blank">
https://www.alta.org/news/news.cfm?20181213-Fraud-Alert-LLC-Identity-Theft</a><u></u><u></u></i></p>
<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Trebuchet MS",sans-serif;color:#555253"><br>
Anthony V. Carollo</span><span style="font-size:9.0pt;font-family:"Trebuchet MS",sans-serif;color:#555253"><u></u><u></u></span></p>
<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Trebuchet MS",sans-serif;color:#555253">CEO<br>
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</span><span style="font-size:10.0pt;font-family:"Trebuchet MS",sans-serif;color:#555253"><img border="0" width="252" height="161" style="width:2.625in;height:1.677in" id="m_9190097647565014284Picture_x0020_1" src="cid:167aa58ebbb4cff311" alt="Merry Christmas from Vista Title and Escrow"></span><span style="font-size:9.0pt;font-family:"Trebuchet MS",sans-serif;color:#555253"><u></u><u></u></span></p>
<p class="MsoNormal"><span style="font-size:8.0pt;font-family:"Trebuchet MS",sans-serif;color:#555253"><u></u> <u></u></span></p>
<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Trebuchet MS",sans-serif;color:#555253">201 W. North River Dr., #205, Spokane, WA 99201<u></u><u></u></span></p>
<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Trebuchet MS",sans-serif;color:#555253">Mobile 509.999.7050 | Direct 509.321.3940<u></u><u></u></span></p>
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</span><span style="font-size:9.0pt;font-family:"Trebuchet MS",sans-serif;color:#555253">WARNING – FRAUDULENT FUNDING INSTRUCTIONS<u></u><u></u></span></p>
<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Trebuchet MS",sans-serif;color:#555253">Email hacking and fraud are on the rise to fraudulently misdirect funds. Please call your escrow officer immediately using contact information found from
an independent source, such as the sales contract or internet, to verify any funding instructions received. We are not responsible for any wires sent by you to an incorrect bank account.</span><span style="font-size:9.0pt;font-family:"Trebuchet MS",sans-serif;color:#6c846a"><u></u><u></u></span></p>
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