Case Study: The Butchers

In mid-January 2017, Candace and James Butcher hired a real estate agent to assist them in locating and purchasing a new and final home in Colorado. When the agent and the Butchers found this home, they began negotiations with the seller and agreed upon a $540,000 sales price. The Butchers informed the agent that they had approximately $267,000 in cash and that they wanted to obtain a mortgage to pay any balance above that amount.

The agent advised the Butchers to utilize the services a specific mortgage broker to obtain their mortgage loan. The Butchers took the agent’s advice and went with that mortgage broker.

Unfortunately, a series of terribly unfortunate events allegedly followed. These events resulted in the Butchers filing suit alleging a series of fraudulent events committed by the mortgage broker, title firm, the financial institution, and also the agent. Additionally, the Butchers now state that they are living in their son’s basement.To date, no resolution has been come to and the case is on-going.

So, how did this allegedly happen?  

As often occurs, the agent emailed the Butchers notifying them that they would be receiving wiring instructions from Shannon at the title company prior to closing.  

Two days prior to closing, the Butchers received an email from a Shannon Ryon at the title company requesting that they wire $272.535.96 cash to close and requested that they reply to email to confirm the receipt. The email listed the name “Shannon Ryan” and did not identify the domain name of the sender (the information that goes after the @ symbol), a common feature for email programs utilized in the United States.  

Within a half an hour from the e-mail allegedly from the title company, the mortgage broker allegedly emailed the Butchers a final closing disclosure stating that the Butchers would need to wire the same amount to close on the property. 

The Butchers replied to confirm the e-mail from “Shannon Ryon” and were sent wire instructions which they followed. The next day the Wells Fargo Fraud Transaction Department informed the Butchers that the wire transfer was fraudulent.From there, the Butchers allege that they were informed that the legal and wire fraud groups at the financial institution were actively handling the matter and trying to retain the funds, it would take 2 to 3 hours to recall their funds and later were told it would take up to six weeks, and the financial institution had a policy of not contacting the Federal Bureau of Investigation in these types of situations.

Eventually, the Butchers allegedly determined that there was NOT a wire fraud claim number assigned as previously told and that only the local branch had been working on the wire transfer matter. At that time, after much work on behalf of the Butchers, the financial institution’s customer care, a district manager and investigator became involved.

The Butchers then determined to take matters into their own hands and contacted the FBI. An agent soon called the Butchers and along with the Butchers began what was a fruitless series of phone calls with multiple entities within the financial institution. Each person that the Butchers and the FBI agent spoke to could not find their claim number, their claim, or SWIFT recall number, stated they were the wrong entity to speck with, and that the proper entity to speak with could not be reached.After this, the agent allegedly informed the Butchers that if he had obtained either the (1) SWIFT recall number, or (2) confirmation regarding the transmission of funds out of the beneficiary account, he could have exercised jurisdiction and initiated a “Financial Fraud Kill Chain.” 

Eventually, the Butchers received notification from their agent that they would not be closing and that the sellers were not willing to extend the contract any further, causing them to lose out on what was going to be their final home.

The Butchers allege that wire fraud was well-known in the real estate and financial industries long before they became victims and easily preventable. 

In their petition, the Butchers claim negligence, breach of fiduciary duty, negligent misrepresentation, breach of the duty of good faith and fair dealing, violation of the Colorado Consumer Protection Act, fraud based on nondisclosure or concealment, bailment, vicarious liability under the Doctrine of Apparent Authority, against their real estate agent amongst other claims against other parties.

The Butchers have requested that the Court award the following relief:

Economic damages, including not limited to consequential and special damages;

Non-economic damages; including but not limited to inconvenience, emotional distress, frustration, and inconvenience;

Attorney fees as allowed by law or contract;

Pre and Post-judgement interest; and

Other and further equitable relief as the Court deems just and proper.

To date, no resolution has been come to and the case is on-going. 

The allegations the Butchers make in their petition are a cautionary tale for all those involved in real estate transactions because the series of events leading up to the wire fraud are commonly engaged in by real estate industry professionals. This case highlights that wire fraud can happen to anyone at any time and that being vigilant against the threat of wire fraud is the best defense.