Possible Real Estate Fraud in the Province

For Immediate Release – August 26, 2015
FRAUD ALERT – CAUTION

The Law Society of New Brunswick has been notified that one of its members may have been the target of a fraudulent transaction.

In this scenario, the lawyer was contacted by telephone by a person in Florida.  The individual said that her boss was looking to sell “all of his property in New Brunswick” and was looking for a quote for handling all the transactions.  The individual initially stated that the land (a wood lot in this case) was held by her boss personally, however, the Agreement of Purchase and Sale sent to the lawyer indicated that the land was owned by a numbered company.  While conducting a corporate registry search, the lawyer realised that the numbered corporation was actually amalgamated with the professional corporation of another of our members.  The lawyer then questioned the “client” who advised that her boss was the owner and was receiving the property tax bills for the property.  The lawyer requested additional documentation from the seller, which has not been received.

Important facts: 

• A legitimate real estate company was used to list the property and worked for both the seller and purchaser of the property;
• To our knowledge the purchasers of the property were not part of the fraudulent transaction and were represented by another of our members;
• The member who owned the property had recently made inquiries to Service New Brunswick because he had not received a property tax bill for the property.  He was told that the address for the bills had been changed to a Florida address.  The member did not make this change.
• The lawyer who initially was contacted by the lawyer in Florida was told that this client was also selling other properties in Atlantic Canada and Ontario.

As usual, we are advising caution when dealing with these types of situations.  Ask appropriate questions; cross-check names, addresses and telephone numbers.  If you are faced with a request from a client who is not able to attend your office, it may be wise to have the potential client attend the office of a lawyer that you know, or of your choosing, to confirm his or her identity.  It is also wise to confirm that the potential client has personally attended the lawyer’s office.

When you open a new client file, refer to the Law Society of New Brunswick’s Code of Professional Conduct and the Rules on Client Identification which are available by clicking on the following link:

https://lawsociety-barreau.nb.ca/en/regulation/acts-and-rules/

If you are dealing with clients you do not know well, relying on the telephone number to verify the document may not expose the scam.

Also note that you have a responsibility to guard against becoming the tool or dupe of the unscrupulous client.  Lawyers must be alert to and avoid unwittingly becoming involved with a client engaged in illegal activity.  Vigilance is required, because the means for criminal activities may be transactions for which the lawyers commonly provide services.

If you receive correspondence or calls of this nature or a variation of the situations described above, please advise the Law Society.