$45 million, stolen.
It took a pair of incidents—one in December 2012 and another the following February—but seven people, all part of what the New York Post called “a sophisticated cyber crime ring” spanning the world, managed to get thousands of ATMs to wrongfully pay them a sum of money approaching the net worth of the Boston Globe. That’s a huge heist. But it’s tiny compared to one pulled off in Manhattan in late 2008. It took ninety minutes, and the property stolen was worth $2 billion. That’s roughly the value of the Empire State Building.
Which makes sense, because that’s exactly what was stolen.
Around Thanksgiving in 2008, a deed of sale came across a desk at New York City Hall, signifying the transfer of a building from Empire State Land Associates to a company called Nelots Properties. The description of the property conveyed by this deed of sale matched that of the Empire State Building, but the clerks who processed the paperwork either didn’t notice or didn’t care. All the important information was on the deed, as required, including the signatures of witnesses and that of the notary. The fact that one of the witnesses was named Fay Wray, the actress who played King Kong’s captive as he ascended the Empire State Building in the 1933 film, likely escaped them. (To be fair, how many people in 2008 knew her name? It couldn’t be all that many.) And that notary? He was a guy named Willie Sutton, who happened to share a name with a famous bank robber. Even the name of the acquiring company was a clue that something was awry; “Nelots,” spelled backward, is “Stolen.”
The good news for Empire State Land Associates is that Nelots was not a true threat to the rightful owners’ property. Nelots didn’t exist. It was a figment of the imagination of the New York Daily News, which concocted the fake deed of sale to demonstrate how easy it is to temporarily, and illegally, obtain “official” ownership of real estate.
As the Daily News noted, this stunt isn’t just used by pranksters and jokesters. It’s used by swindlers, and no, they aren’t trying to move into your house—in fact, these con artists don’t ever need to (and often don’t) visit their newly but wrongly acquired property. These new “owners” can take out a mortgage or other line of credit against the property, and once they have the money in hand, disappear. The true owners are left with an unclear title, liens against their property, and at times, banks looking to foreclose even though the rightful owner never took out a loan. It’s not only (or even mostly) the fault of the city clerk who processes the deeds. As a Philadelphia City Paper editor said in a video on deed fraud created by the University of Pennsylvania Law School, “It’s pretty hard to stop a forged signature and a bribed notary. Where do you stop that? It’s a little more difficult.” The system doesn’t make it all that difficult; in the same video, an attorney who has worked on these cases claimed, “It is easier to steal a home in the city of Philadelphia than it is to steal a purse.” Given the Daily News’s ruse, this is probably true for New York, too, and probably many other places as well.
Homeowners and landlords aren’t the only victims—the loans banks make often go unrepaid. Therefore many lending institutions have developed a system to alert them to potential fraud. The telltale sign: the mortgagee’s failure to make his or her first payment, which one law enforcement agency describes as a “first payment default.” The theory is simple: A true borrower would be able to pay the first bill, but one committing deed fraud would likely not be at the address and therefore never receive the bill, which would go unpaid.
As for the Empire State Building, the Daily News “returned” it before any of this was an issue.
It took nearly two decades before the Empire State Building turned a profit. Why? It couldn’t attract tenants—it was much farther away from the two main train stations, Grand Central and Penn Station, than competing skyscrapers such as the Chrysler Building. The rental revenues were initially so poor that in its first year the Empire State Building earned as much revenue from its observation deck as it did from renters.