The Fraud Examiner

Turnabout’s Unfair Play: The CFE Gets Defrauded

One would think that a CFE with over nine years of experience assisting in the prosecution of white-collar crimes would be somewhat Zen about being the victim of a fraud attempt herself. One would think that, and one would be wrong.

After three days of driving from Minneapolis, Minnesota, to our new hometown of Tallahassee, Florida, our real estate agent, my husband and I stood in the kitchen of the house we had under contract. This house showed really well, had great curb appeal and we were scheduled to buy it 21 hours later.

This house that we loved and were planning to make our new home was a complete and total pigsty. There were piles of personal junk in the corners of every room and the garage. Lateral blinds hung from window frames and there was a newly-torn-out section of screen in the back porch that the property inspection had not noted. The bathrooms had spots galore and the self-cleaning oven looked radioactive.

The three of us stood there after our walk-through, speechless. It was clear that the sellers, having already moved into their new home, had abandoned any pretense of getting the property ready for closing. It was equally clear there was no way the house would be move-in ready within 21 hours.

Then my husband remarked, “Wait a minute.” He stared at the refrigerator for a few seconds. “This isn’t the refrigerator that was in the listing sheets.”

We pulled up the online listing, and sure enough, the gorgeous and huge stainless steel refrigerator that was featured prominently in the listing photos was nowhere in this kitchen. Instead there was an older, smaller, inferior stainless steel fridge in its place.

We agreed that we would not close on the property given its condition and the sellers’ bait-and-switch with an inferior major appliance. Because my husband and I were so punch-drunk from selling our own house and moving across the country, we told our agent that we would keep the purchase contract alive if the sellers dropped the price by $5,000. Our agent called the listing agent and left an angry voicemail detailing the terrible conditions of the house and our revised offer. We went back to our hotel room in the driving rain and waited.

One would think that the listing agent and his broker would be grateful for our willingness to go through with the purchase at all given how he and the sellers tried to defraud us. One would think that, and one would be wrong.

He first denied there was anything amiss about the house’s condition and the switch of the refrigerator. However, in the same conversation, he stated he could have a cleaning crew come out and clean the house and replace the refrigerator before the 10 a.m. closing the next morning. He refused the counter-offer. Our agent told him that he and his sellers have no credibility. Finally our agent informed the listing agent that our counter-offer stood with a deadline. The deadline passed and our agent called the listing agent to let him know the deal was off.

This was one of the most disorienting, surreal experiences I have ever endured. I am sure there are doctors out there who think they are immune from illness or injury because of their professional experience, and there are lawyers who think they are immune from legal chicanery because of their professional background. I suppose I had this unconscious delusion that my years detecting fraud immunized me from the tricks of a fraudster, but after this experience, that mindset had been dispelled. Additionally, prior to my career as a paralegal CFE, I held a real estate broker’s license, and fraud in real estate is all too common. It simply never occurred to me that something like this would happen. 

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