The Closing Wire That Went to the Wrong Attorney

The facts point to a business email compromise combined with closing-agent and identity failures, not a simple title error. The off-by-one-letter domain is a classic spoofing indicator. The phone confirmation was inadequate because the caller was not independently verified, and the settlement agent did not use a known number or a second channel. The notary accepted a signature despite a photo mismatch, which undermines the identity verification at closing. The payoff went to a new account controlled by a fraudulent actor, while the real payoff lender remains unpaid. The seller's attorney denies sending the email. The buyer's funds are still in escrow, but the title company has already sent a large wire out.

Potential parties include the impersonator, any insider who facilitated the change, the settlement agent, the notary, and possibly the seller if the seller participated. The control failures include weak wire-instruction change verification, failure to independently call the known attorney, inadequate notary identification, and failure to reconcile the payoff before recording and disbursing.

Speed matters because wire recalls are time-sensitive. The settlement agent and lender should immediately contact the sending and receiving banks to request a recall or freeze of the $1.2 million wire, document the request, and preserve all transaction records. Notify law enforcement and the title insurer promptly. Do not rely solely on email; call the banks using independently verified numbers. Preserve the original email, full headers, domain registration information, phone records, call logs, wire instructions, escrow ledgers, closing documents, the notary journal, and the driver's license copy. Maintain a chain of custody for original documents and hash or otherwise preserve electronic evidence.

Obtain written statements from the settlement agent, notary, and any employees involved. Identify the account holder at the receiving bank through law enforcement or the bank's fraud unit, not through informal inquiries. Check whether other files used the same fraudulent domain or wire instructions. Notify the buyer and seller through counsel, and follow title insurance claim procedures. Avoid altering the escrow records; copy them and preserve the originals.

The institution should evaluate SAR filing if it is a BSA-covered financial institution; wire fraud involving a substantial amount and a suspect is likely reportable, and confidentiality rules apply. Notify the title insurer, the investor or warehouse lender as required, and state regulators if the settlement agent's conduct raises licensing issues. The notary's acknowledgment despite a photo mismatch should be reported to the commissioning authority if state law requires, and the settlement agent should be removed from the approved list pending investigation. Preserve the right to seek recovery from the agent's bond or errors-and-omissions policy.

Remedial controls should include out-of-band verification of wire changes using known contacts, dual approval for wire instructions, callback verification with a previously established number, notary training on ID verification, and reconciliation of payoffs before disbursement and recording. The institution should also review other recent closings handled by the same agent. The CEO or business line should not attempt to resolve the matter informally with the agent without counsel and compliance involvement.