Deed Scams and Other Frauds
Recently, some clients received a “Deed
Processing Notice” indicating that a company called Property Transfer
Services, of Wilmington, Delaware, would provide the clients with a
copy of their deed and other relevant data. The quoted fee was $83.
In reality, this fee is to provide property
owners with information which they already have or is readily available
from the local Recorder of Deeds.
As is often the case with scams of this type,
there is a compliance response date, usually a couple of weeks, after
the document is received. Many owners of property are lead to believe
that they need to pay this $83 fee to obtain information that is
publicly available.
Many people are aware that deeds, liens, and
other records related to real estate and the existence of entities,
corporations and LLCs, are public information. Anyone can walk into the
real estate records office in their area and obtain a copy of any deed,
or document, that has been recorded.
Stated differently the information that Property Transfer
Services offers to provide is already available for free in most areas.
In short, such services are not generally
needed by most property owners and in many cases the offer of such
“gathering services” needlessly confuse the elderly or those not
conversant with how public records are assembled and maintained.
Recently, in July 2013, this office received a
notice from the Virginia State Corporation Commission (SCC) indicating
that a company called Corporate Record Services was offering to provide
information on 2013 annual minutes forms and corporate record services
to prepare documents for a fee of $125.
According to the VA SCC release, the form sent
by Corporate Record Services included a response date similar to the
“Deed Processing Notice” discussed above and suggested that the
information requested is required by Virginia law. The Corporate Record
Services form, according to the VA SCC, also asks for the names of
shareholders, directors, officers, and “looks somewhat like an annual
report form prepared by the Commission.” The VA SCC advised, however,
that the form, if completed for a fee of $125, would not be accepted as
a corporate annual report by the State of Virginia.
What some people do not realize is that various
records concerning who owns land and the name of an entity have to be
public records. For a long time, the concept of recording deeds (thus
enabling title searches) was considered important because if
the deeds were not recorded, it would be possible for the
owner of land to sell the land to multiple parties and illegally
receive multiple payments for the same property. Similarly
corporations, LLCs, and other entities are required by state law to be
registered, because there needs to be some record of the name,
formation, and officers in control.
Liens are a method of publically recording the
fact that property (real estate as well as personal or commercial
property) is encumbered by a debt or judgment due a person or entity
entitled to be paid. The
IRS and state tax offices often file liens for tax debts without the
necessity of obtaining a court judgment in a legal proceeding. Our website contains
newsletters discussing IRS and other types of lien filings.
Since such tax liens are public knowledge it is
easy for scammers to discover the existence of a tax debt. Many dubious companies
advertise on TV and elsewhere exaggerated claims about how they can
“solve your tax problems.” Recently
several clients have been called by scammers claiming to be IRS
criminal agents and asking for immediate payments by money order or the
IRS will seize their property.
It is essential that people receiving such
communications and notices not be victimized by those looking to take
advantage of them. Some people, particularly the elderly, seem prone to
respond to notices that look official.
Anyone receiving a notice based on public
records or offering to provide information that is already available to
the public should be suspicious. Tax
scams can usually be detected by asking a caller for his or her IRS
Employee I.D. number. No one should ever provide information or money
until assured that they are talking to or dealing with a real IRS
employee.
If you need help or have further questions
concerning such situations, please contact Newland &
Associates.
Copyright 2013
Published by the law firm of Newland &
Associates, PLC
9835 Business Way
Manassas, VA 20110
Call us at (703) 330-0000 for a full range of business
law and
tax-related services.
While designed to be accurate, this publication is not intended to constitute the rendering of legal, accounting, or other professional services or to serve as a substitute for such services.
Redistribution or other commercial use of the material contained in Newland's Business Notes is expressly prohibited without the written permission of Newland & Associates, PLC.
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