Newland's Business Notes

Deed Scams and Other Frauds

Volume 17 Issue 5 -- September/October 2013

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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