How Scammers Are Using AI to Try to Steal Multimillion Dollar Properties

By Katherine McLaughlin | October 2, 2024

For one week in May 2024, Graceland—Elvis Presley’s mansion in Memphis—received the type of intense media attention usually reserved for its owners rather than the estate itself. Reports initially claimed the property had been foreclosed and would be auctioned by Naussany Investments & Private Lending LLC. The company alleged that Lisa Marie Presley, Elvis’s daughter, had used the mansion as collateral on a loan before her passing. Soon after, Riley Keough, Presley’s granddaughter and the rightful owner, came forward, revealing that her mother’s signature had been forged, and the sale was illegal.

A judge agreed with Keough and stopped the auction. Days later, scammers, allegedly based in Nigeria, emailed The New York Times claiming responsibility for the fraud. “We figure out how to steal,” the email read. In August, Lisa Jeanine Findley, a woman from Missouri, was charged in connection with the scheme.

Though the Graceland case was thwarted, it brought national attention to a growing threat: deed fraud, also called home title theft. The FBI recently warned of a 500% increase in vacant land deed fraud over the past four years. Experts believe that artificial intelligence (AI) and improved technology are making it easier for scammers to forge documents and steal properties.

Deed fraud schemes often involve scammers filing fake ownership documents with county clerks, allowing them to sell properties illegally, take out loans against the homes, rent them to unsuspecting tenants, or refinance mortgages. “Ninety-nine percent of the time, the money is gone before anyone realizes,” says Lauren Albrecht, president of Florida Title & Trust.

Another high-profile deed dispute involves Spelling Manor, a 120-room estate built by TV producer Aaron Spelling. The mansion, now owned by 594 Mapleton LLC, has been on the market since 2022. However, a couple named Mirga and Nicholas Phipps White claim ownership, alleging that the federal government misappropriated funds they earned in a real estate deal. A judge dismissed their lawsuit as “fantastical,” but Nicholas is appealing the decision. The couple also filed a deed for the property in June 2024, which 594 Mapleton LLC argues is fraudulent.

Technology, especially AI, plays a significant role in these schemes. Scammers can forge notary signatures, create fake IDs, and even generate deepfake videos. Albrecht recalls a case where her firm handled a fraudulent vacant land sale. The supposed owner provided a West Virginia ID but had a bank account in the Bahamas. When asked for a proof-of-life video, a person resembling the ID photo appeared on a Zoom call but made repetitive, unnatural movements, suggesting the use of AI-generated imagery.

“We later discovered the photo on the ID was from a missing person’s flyer in California,” Albrecht says. “It’s heartbreaking to think a family’s loved one was exploited in this way.”

Scammers tend to target vacant properties or land rather than occupied homes. Vulnerable groups, such as seniors, immigrants, and people of color, are at higher risk, according to the New York City Department of Finance. Victims often face long legal battles to reclaim ownership, and when fraud leads to an unlawful sale, new occupants may find themselves caught in the middle of a legal nightmare.

Albrecht emphasizes the importance of real estate professionals verifying identities and ownership thoroughly. Red flags include demands for quick, cash-only transactions and avoidance of face-to-face meetings. Title insurance offers some protection, covering financial losses due to title defects.

She also advises homeowners to take proactive steps. “Unencumbered properties are more at risk,” she says. “Even though we own our house outright, my husband and I recorded a mortgage against it. We don’t owe ourselves anything, but it ensures the property can’t be sold unless the ‘mortgage’ is satisfied.”

These types of fraud, though still considered rare, are growing in sophistication. Experts recommend not leaving properties vacant for long periods and ensuring that property inheritance is clearly documented to prevent exploitation.

Original article: https://www.architecturaldigest.com/story/how-scammers-are-using-ai-to-try-to-steal-multimillion-dollar-properties