Language Addressing Wire Fraud, Business Email Compromise Added to Appropriations Bills

July 16, 2020

ALTA has successfully worked with the House Committee on Appropriations to push several federal agencies to focus more on real estate wire fraud as part of Congress’s annual appropriations process.  

An appropriation bill, also known as a spending bill, is legislation that that authorizes the expenditure of government funds. The bills direct federal agencies on how to spend their budgets. Directing agencies to spend money on a specific topic or produce a report is a critical way to elevate an issue with federal policymakers.

The report language included in three appropriation bills directs federal agencies like the FBI, FinCEN and FTC to produce reports on their current efforts on wire fraud and for suggestions of new legislative authority to help them combat these crimes. For the Department of Housing and Urban Development, the language requires it to develop wire fraud education materials for consumers through the department’s housing counseling programs.

Below is a summary of the committee’s recommendations affecting real estate wire fraud and business email compromise:

Financial Services and General Government

On page 18 of its recommendations to the Financial Services and the general government, the committee said it is concerned with the prevalence of business email compromise schemes in the real estate sector. FinCEN is directed to brief the committee within 90 days of enactment on its ongoing efforts to combat and raise awareness of business email compromise scams, including joint activities conducted with the Department of Justice, Federal Bureau of Investigation, Federal Trade Commission and other relevant agencies. FinCEN is expected to keep the committee apprised of the department’s efforts to detect money laundering and other illicit activity involving real estate transactions through the use of Geographic Targeting Orders. The committee recommends that nearly $127 million be dedicated to FinCEN.

Department of Justice

In its recommendation to the Department of Justice (DOJ), the committee said it remains concerned about real estate wire fraud and business email compromise (BEC). On page 60 of its report, the committee references a July 2018 FBI public service announcement that reported these schemes resulted in over $12.5 billion in losses between 2013 and 2018. The FBI recently warned of BEC scams related to the COVID 19 pandemic. 

Department of Housing and Urban Development

Regarding real estate fraud, the committee, on page 131 of the report, recommended HUD encourage housing counseling agencies to include education warnings about the risk of real estate wire fraud and steps buyers should take to protect themselves. The committee also recommends the department require the Office of Housing Counseling to develop brochures and flyers for Housing Counseling agencies to distribute to counseling clients and to group education participants.

The committee recommends $75 million for housing counseling assistance to remain available until Sept. 30, 2022. This would include money dedicated to education about wire fraud, as well as addressing the economic impact of the coronavirus pandemic and housing counselor certification.

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