Latest Cyberthreat: Stealing Your House

Sybil Patrick’s vacant brownstone in Harlem was fraudulently sold to unsuspecting buyers by swindlers who had forged the deed.
Photo: Pearl Gabel for The Wall Street Journal


NEW YORK-The clues were there for months, but property investor Sybil Patrick didn’t put them together. The locks to a vacant Harlem brownstone she owns were changed. Belongings weren’t in the same place she left them.

Then one day last spring, Ms. Patrick, a 79-year-old former nurse, showed up to tend the front yard. The superintendent next door asked why she was visiting a house she had already sold.

“I told you I was never, ever going to sell,” she recalled saying.

But it turned out the superintendent was correct: The house had been sold, without her knowledge, about a year earlier for roughly $750,000.

Deed fraud, helped by proliferation of online records, is reaching ‘epidemic’ levels in Manhattan and becoming more common elsewhere in the U.S.

This case was one of about 30 related incidents in Manhattan in which a group of people allegedly forged or attempted to forge new deeds using easily available online records, to sell the homes and collect the proceeds, according to officials at the Manhattan district attorney’s office. Since last fall, New York prosecutors have arrested four people on grand larceny charges connected to the sale of Ms. Patrick’s house, according to the district attorney’s office.

Prosecutors in Chicago and Detroit also said they have seen a spike in a category of crime known as deed fraud.

Investors who own several properties are especially vulnerable, prosecutors said, as they are less likely to notice if someone moves into a home they don’t visit regularly. Ms. Patrick owns the Harlem brownstone in addition to her primary residence.

“This crime has always happened, but it’s been made much more prolific” by having records online, said Executive Assistant District Attorney  David Szuchman, chief of the investigation division in the office of Manhattan District Attorney Cyrus Vance Jr.

The rise in such crimes is an unintended consequence of an effort to put documents on the Internet to promote transparency in local real-estate markets.

“It had a noble purpose and was a good idea, but in fact has become one-stop shopping for fraud,” said Mr. Szuchman, dubbing the problem an “epidemic” in Manhattan.

Despite the potential for deed fraud, some lawmakers and regulators continue to support the push for online records, which have made buying and selling properties significantly easier. Deeds are available online in a number of U.S. counties.

“It impedes the process of the transfer of real estate” not to have property records readily available, said Annette Hill, assistant commissioner at the New York City Department of Finance. “It’s always been public information. It’s just now across the country it’s available online.”

Laura Kusisto
Wall Street Journal