In one of the biggest heists in American history, the Daily News “stole” the $2 billion Empire State Building.
And it wasn’t that hard.
The News swiped the 102-story skyscraper by drawing up a batch of bogus documents, making a fake notary stamp and filing paperwork with the city to transfer the deed to the property.
Some of the information was laughable: Original “King Kong” star Fay Wray is listed as a witness and the notary shared a name with bank robber Willie Sutton.
The massive ripoff illustrates a gaping loophole in the city’s system for recording deeds, mortgages and other transactions.
The loophole: The system – run by the office of the city register – doesn’t require clerks to verify the information.
Less than 90 minutes after the bogus documents were submitted on Monday, the agency rubber-stamped the transfer from Empire State Land Associates to Nelots Properties LLC. Nelots is “stolen” spelled backward. (The News returned the property Tuesday.)
“Crooks go where the money is. That’s why Willie Sutton robbed banks, and this is the new bank robbery,” said Brooklyn Assistant District Attorney Richard Farrell, who is prosecuting several deed fraud cases.
Of course, stealing the Empire State Building wouldn’t go unnoticed for long, but it shows how easy it is for con artists to swipe more modest buildings right out from under their owners. Armed with a fraudulent deed, they can take out big mortgages and disappear, leaving a mess for property owners, banks and bureaucrats.
“Once you have the deed, it’s easy to obtain a mortgage,” Farrell said.
The News investigation disclosed that mortgage brokers, representatives of title companies, lending banks, lawyers and others in the mortgage process often failed to verify identification and other information provided by the thieves.
Unlike the thieves, The News did not obtain a mortgage on the Empire State Building.
Instead, The News returned the property to its rightful owners Tuesday – less than 24 hours after the fake deed was filed. The News also is withholding key details of how the scam works.
Real thieves get the mortgage cash, ripping off banks and leaving the properties’ owners with mortgage debt and ruined credit.
(Source: NY Daily News)
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5 Responses
1. Title insurance companies would normally catch the fake deeds. That’s what they are paid for.
2. A system, as exist in some countries, in which deed filing requires judicial review would be very expensive. We would have to have the European system of making notaries into well paid magistrates (as opposed to inexpensive clerks).
3. The true owners are in no way liable UNLESS they were part of the scam. Anyone who buys the property (without title insurance) or lends money based on the property without checking properly, will be out the money, which is why lenders with brains verify the deeds. A bank that loans without veryifying ownership of collateral deserves to go broke (but that’s a different issue).
I hope the Daily News intends to pay their per-deium share of the Real Estate Tax for the time they owned the property.
BS”D
I will trade the Empire State Building for the Brooklyn Bridge, which al pi halacha I own through the kinyan I made by walking across it. What is more I have a chazoko because I did this at least three times.
Oops…wait a minute…I walked the bridge on Shabbos, but that kinyan is worth as much as the Daily News’s silly stunt.
Number 1: Clearly you do not understand how newspapers function. The Daily News came up with this dramatic idea to attract readers. How many readers would bother to read an article simply explaining how often frauds are perpetrated? Readers go for the unusual.
I think the Daily News article does illustrate a frightening fact about property rights in New York. I know of more than a few cases when the deed was falsified, when deals went sour because the seller pretended to be the owner, etc. This is something to pay attention to.