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Nest Egg Heist: A Cautionary Tale PDF Print E-mail
Written by Kathy Glasgow, BT Contributor   
November 2016

Hackers snatch an $86,000 wire transaction for a home purchase

 

Correction:

In our story “Nest Egg Heist: A Cautionary Tale” (November 2016), we stated that Richard Zimmelman was following e-mailed instructions from his title attorney regarding the wire transfer of $86,000 intended for the purchase of a condo. The story should have made clear that the instructions actually came from criminal hackers, who directed him to send the money to an account belonging to them.

Also in the story, we incorrectly reported that Zimmelman showed up at his title attorney’s office three days after wiring the money, and that the $86,000 “had been gone for three days without anyone in [title attorney Abbie] Salt’s office noticing.” In fact the interval was two days.

The story also stated: “On the way to the police station, Zimmelman recounts, Salt suggested possible arrangements in order to keep the closing on track. ‘She offered to give me half of the amount that was missing, in exchange for a 50 percent interest in the condo.’” The story should have explained that Salt offered half of the amount that was missing and a loan for the other half.

Zimmelman reported the crime to his bank before his visit to the North Miami Police Department, not afterward as reported.

Finally, Zimmelman asserts that, following a Channel 7 Help Me Howard segment, strangers did recognize him from the broadcast, but they did not “advise him it was his fault,” as the story stated.

We regret the errors.

Jim Mullin, publisher / editor
Biscayne Times

 



AZimmelman_1t first, Richard Zimmelman expected the world to make sense and justice to be served. He doesn’t know what to expect anymore.

Zimmelman, a native New Yorker, longtime South Floridian, grandson of Russian and Latvian Jewish refugees, retired this past April after a 33-year career wit

h the U.S. Air Force. He was just 52 years old and had been longing to revisit some of the places he’d been stationed: Germany, Korea, Spain, England. But first he decided to buy a modest lakeside condominium in North Miami Beach.

“That would be my home base,” thought Zimmelman, an orderly, clean-shaven man whose calm demeanor rarely belies the inner turmoil he has been experiencing lately. He had served in both active and reserve duty in the Air Force, and when not overseas was busy working on an MBA at Florida International University (awarded in 1997). Finally he was going to be able to set his own agenda.

The closing on his new condo was set for late June. Zimmelman, following e-mailed instructions from his title attorney’s assistant in preparation for the sale, wired more than $86,000 to the title company’s bank account. Three days later Zimmelman showed up for the closing at Garden Title Corp., the title attorney’s office in North Miami.

“The title attorney, Ms. Abbie Salt, met me at the door,” Zimmelman recounts, “and the first thing she said was, ‘Did you wire the money?’ That was a little unsettling because I had forwarded her a confirmation of the transaction immediately after it was complete -- which was three days earlier.”

But the $86,000 was not to be found. Zimmelman, it turned out, had wired most of his life’s savings to computer hackers. It must have happened, he remembered uneasily, after Salt’s assistant e-mailed him the pre-closing wiring instructions. He had received subsequent, routine-appearing e-mails from the same account name advising him of “issues” with the first account that made it necessary for him to transfer the funds to a different bank account.

At the time it didn’t seem remarkable, since all of his communications with Garden Title had been exclusively by e-mail, and in any case, he had no idea how many bank accounts the company used.

The $86,000 had been gone for three days without anyone in Salt’s office noticing. But maybe there was still hope of tracing the transaction and recovering the money. Salt offered to drive Zimmelman to the North Miami Police Department headquarters to report the theft.

On the way to the police station, Zimmelman recounts, Salt suggested possible arrangements in order to keep the closing on track. “She offered to give me half of the amount that was missing, in exchange for a 50 percent interest in the condo. But that isn’t my area of expertise. I told her I didn’t feel like I was qualified to negotiate something like that and I thought I should ask an attorney.”

He frowns, shaking his head. “Should I have taken it? I have to question myself, because after I said I needed to consult a lawyer, she reacted very negatively. She said, ‘If you hire a lawyer, I’ll hire a lawyer, and they’ll draw it all out forever.’”

Just as Salt predicted, Zimmelman’s ordeal was only beginning.

Zimmelman_2

Abbie Salt has practiced law in Florida since 1984, is a licensed Realtor, and owns, by her estimate, close to 200 rental units. Contacted by phone, she expresses no intention of commenting on any of Zimmelman’s statements, because, she asserts, he is presenting his own self-serving and unproven version of events and is exposing himself to legal action for slander.

“I will not have him disparaging my name,” she cautions, adding another warning to the BT: “I would recommend you do not use my name in your article. I don’t sue people. But my attorney loves it, and he is really itching to file suit.”

Salt’s name and the name of her company, however, are noted in public documents in connection with this incident, such as the North Miami Police Department’s report, dated June 24. The report lists Zimmelman and Salt, respectively, as victim No. 1 and victim No. 2 of one count of grand theft fraud.

After his visit to the police station, Zimmelman reported the crime to his credit union (the point of origination), the new U.S. Consumer Financial Protection Bureau (CFPB), and to the FBI. He spoke with an FBI agent, who told him the offense would be entered into the agency’s cybercrime database but probably not investigated specifically because it is just one of hundreds of thousands of internet scams reported in the U.S. annually. (Florida consistently ranks second to California nationally in the number of reported cyber scams, with losses of $53 million in 2014.)

The FBI agent advised him that he probably stood a better chance of recovering his money, and more quickly, if he hired an attorney. Friends and family members agreed.

So Zimmelman spent his initial $1000 in legal fees. His first lawyer (who no longer works for him) started by requesting a copy of Salt’s business liability insurance policy.

Florida law requires a business to present its full liability insurance policy within 30 days of a written inquiry by a claimant.

After two weeks, Salt sent Zimmelman an insurance certificate with an effective date of July 1, 2016, about five days after the loss. Zimmelman’s attorney made subsequent requests for a policy covering the date of the incident, but to no avail.

At the same time, Zimmelman’s attorney was presenting proposals for a settlement to Salt’s attorney, Jason Alderman, who didn’t reply to those proposals, either.

Zimmelman_3

Instead, Alderman was now suggesting that Zimmelman shared responsibility for the hack. “We have reason to believe the subject e-mail from which [Zimmelman] wired funds...may have originated via a hacker in his computer,” Alderman wrote to Zimmelman’s attorney. “We want the original e-mail preserved immediately as evidence.”

Zimmelman didn’t take kindly to what he saw as an insulting insinuation, and went ballistic on a three-way phone call with his attorney and Alderman. “I did lose my temper,” he admits. “But that was just out of line. I’ve been in the military. I’ve had several high clearances. Aren’t I the guy who was wronged here?”

Increasingly frustrated and anxious, wanting to file a straightforward insurance claim but feeling stonewalled, Zimmelman sought help in obtaining relevant insurance information from the Florida Department of Financial Services, which is conducting an investigation and can’t release any information. He also decided to file complaints against Garden Title with the Better Business Bureau and the Florida Bar.

Then he went for the nuclear option: he called Help Me Howard. The producers of the popular WSVN-Channel 7 consumer advocacy feature went to work on a segment about Zimmelman’s case. A Channel 7 reporter’s call to Salt prompted her to send Zimmelman an insurance binder with a valid effective date.

The North Miami Police detective assigned to his case, Webster Blemur, told Zimmelman that he had obtained photos taken from surveillance footage at a Bank of America branch somewhere in New York. The photos show a young man and woman with Asian features withdrawing Zimmelman’s $86,000, apparently from a bank account police believe was closed immediately afterward.

Four months later, “We’re still trying to identify the subjects,” Blemur acknowledges. “We’re still waiting on subpoenas for bank records.” (Zimmelman notes: “He said in July they were waiting on subpoenas.”)

Both Zimmelman’s credit union, USAA, and Bank of America attempted to trace the money, and both investigations have declared the stolen funds unrecoverable. Zimmelman wasn’t surprised to hear that, but between his attorney’s lack of progress and law enforcement’s inaction, it seemed he was further away than ever from a resolution.

Zimmelman_4 copy

“I just thought, what can I do?” Zimmelman muses. “By now I’m so distrustful of the whole process.” Everyone familiar with this case seems to be in agreement that the Bank of America should be on the hook for at least part of the money, but right now his current attorney, Charles Baron, is concentrating on preparing a detailed demand to Salt’s insurance company. (Calls to three different officials at Bank of America were not returned.)

Help Me Howard aired its segment August 24, two months after the aborted closing. The Channel 7 piece was upbeat; attorney Howard Finkelstein concluded optimistically: “Can he get his $86,000 back? Yes. This scam should be well known to people in the closing business, and the law requires the closing agent to act in a prudent manner, meaning they have to put in safety measures to block the scammers. Since there’s no evidence those safety measures were in place, in this case, the title company -- meaning their insurance company -- has to reimburse Richard the $86,000.”

It is true that real estate professionals are warned repeatedly about this type of cybercrime and that most offices handling real estate transactions monitor wire transfers (which are nevertheless generally preferred over cashier’s checks) especially closely. It’s notable that after Zimmelman’s loss, e-mail communications from Garden Title began to carry a boldfaced warning that clients should “verify wire instructions with us prior to sending money.... We never change our wire instructions.”

Nevertheless Salt is adamant that her office has always had the necessary computer security software in place, and that no one should jump to conclusions about liability. “I have made a claim to my insurance company, and that’s it,” she says. “It has not yet been determined whose computer was hacked. No one knows that. Mr. Zimmelman has no idea who did this.”

Charles Baron, Zimmelman’s attorney, says the quesion isn’t really who did it, but whether there was negligence on the part of Garden Title. And that will be determined by the insurance company. “We’re at a very early stage on this,” he says. “We’re submitting a demand package with evidence and arguments, and then we will try to settle. If you can’t settle, you go to litigation. Litigation takes at least a year.”

And so Zimmelman is still waiting, in the same spot he’s been in since April. Except that now, he’s without a way out -- without the financial mobility he worked so hard to achieve. His unease has been deepening as he discovers that people often recognize him from the Channel 7 report and approach him, either thinking the matter has been resolved or wanting to advise him it was his fault.

Besides the stolen funds, Zimmelman says he has forfeited and paid more than $15,000 in fees, deposits, and legal costs. He has a place to live -- the condo he has owned since 1997, with a view of the parking lot, not a lake. His travel plans are on hold.

“I’m extremely limited without that $86,000,” he acknowledges. “Right now I’m not sure what I’m going to do. I don’t know where to turn.”

 

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