A Delaware homebuyer has filed a lawsuit in federal court after losing $2.2 million in a real estate closing scam.
WBOC reports Johanna Berkowitz was buying a luxury property in Dewey Beach, Delaware, with a closing scheduled for Nov. 21, 2025. Two days before the closing date, she received an email that appeared to be from someone connected to the law firm handling the transaction. The email included wire instructions for her final $2.2 million payment.
However, the email spoofed the law firm, and Berkowitz wired her funds to a Truist Bank account controlled by fraudsters. Truist later confirmed the money had been received and then withdrawn.
Berkowitz’s lawsuit names “John Doe” defendants because the identities of the fraudsters have yet to be determined. She said that she is seeking to name the fraudsters banking records, IP address tracking, and other investigative steps.
Berkowitz is asking the court for at least $2.2 million in damages and plus additional relief that could include punitive damages and the return of any property connected to this fraud. She accuses the still-unknown defendants of violating federal laws, including the Computer Fraud and Abuse Act and the Stored Communications Act, along with state laws.
AGENTS, please advise your clients to be aware of this scam — they can often see in MLS systems when settlement is planned, or they’ve hacked law firm emails to get client info and then spoof the firm, Some will only post wiring instructions on secure areas of their site or through special tools. This is sad, and hopefully Truist can track the account holder, but they probably immediately closed the account
All Real Estate Agents and Closing Attorneys do go over wire fraud with every client. Usual more than once. (Or they should be doing that)
She should have been required to sign a Wire Fraud Disclosure prior to making her initial escrow deposit. I attended an FBI seminar in Tampa several years ago and this exact scenario was explained. Nothing new, but that’s a sad situation.
Shame on her agent and law firm! Did they not warn her that this could happen? No wonder consumers question the commissions that realtors receive. Agents like this who do not do their job reflect on all of us – including those of us who actually EARN their commissions!
Why did you assume that the agent and law firm were to blame?
I will bet it was in the paperwork she signed when she listed and the paperwork the law firm sent to her.
For that amount of money it would seem appropriate to have your banker coordinate with the Escrow company for the transfer of funds.
I always give my buyers the option to pick up the title company’s wiring instructions in person. I offer to meet them at the closing company, meet out closer and get familiar with the location some buyers do and some don’t others use the encrypted site. I pray she gets some resolution to this awful crime against her.
Also beware of 3 day weekend holiday’s. That’s how I got scammed. Escrow officer received last minute instructions of a change of where the funds were to be wired. Needless to say, no one knew about the fraud until that Tuesday, when everyone was open for business again. I lost $17,000.00 I no longer allow a wire on any 3 day holiday weekend.
I was traveling when the unexpected need to wire 100K to a company. I talked with my bank and advised I was sending wire instructions. I then immediately sent the wire instructions. The person receiving the money from me then became suspicious of me and even my bank. After much debate I finally received from my bank an actual copy of the instructions I sent. I then realized that my email was hacked and instructions looked exactly like what I sent except the receiving institution. I immediately contacted FBI, Attorney General and US Secret Service. All told me after 3 days money was probably lost. However on the 4TH day the Secret Service called and advised they had recovered my money. I had basically decided that the money was gone for good. I am so grateful to our government!!
We may need to return to traditional methods, such as using a Cashier’s Check.
When I was a realtor, a client deposited his $20,000 down payment directly to the title company as I advised. A couple days later he called me and demanded to know why I wanted him to pay that twice! He had received a phony email telling him to send his down payment to another party to “protect” his money. The email was very official looking with the correct addresses, escrow number, names, etc.
It is for this reason that as agents we tell our clients to 1) request the wire instructions from the law firm in person or by email if out of area. 2) Prior to wiring any funds, call the law firm (or title company) with the phone number provided by their agent to verify the routing and account numbers. This is unfortunate and avoidable.
We have a Wire Fraud Advisory in Arizona that I have every client sign. And I specifically tell my buyers not to wire any funds to any account unless they have talked to me over the phone first. No emails. No text messages. Phone call only. Don’t care how urgent the message may seem.
what could possibly go wrong with all these remote closings and everything via email….such a shame..it should make things easier…