A Fieldale man has been indicted for allegedly engaging in a real estate fraud scheme valued at more than $1.3 million. Herman Estes Jr., 40, is facing charges of bank fraud, wire fraud, mail fraud, and committing criminal offenses while on federal pretrial release.
According to court documents, Estes contacted a real estate agent in January 2023 expressing interest in buying a Roanoke County property listed at $1.2 million. At that time, Estes was on federal pretrial supervision due to an illegal firearms charge. However, he told the agent that he was expecting a tax refund of $18 million, which would soon be transferred to his estate as part of a trust.
In March, Estes reached out to the agent again, claiming that his tax refund had cleared and he was ready to proceed with the property purchase. The agent prepared a $1.3 million cash offer for the property, and Estes provided a letter indicating he had been approved for a private real estate loan for that amount. He also provided a phone number for a person he claimed was the manager of his trust. The agent contacted the supposed manager, who approved the cash offer, and the contract was ratified.
On April 10, Estes provided the settlement company with a 62-page “extension of credit” document, which he falsely represented as trust documents. Court records reveal that Estes paid for the property with a fraudulent cashier’s check for $1,307,199.43, which was deposited by the settlement company on April 13, and the sale closed a day later.
However, on April 17, the cashier’s check was returned by the Federal Reserve Bank of Richmond and marked as fraudulent. By that time, Estes had already obtained the property.
If convicted, Estes could face a maximum penalty of 40 years in prison.
Real estate fraud schemes like this not only have serious legal consequences but can also cause significant financial harm to both individuals and businesses involved in the transaction. It serves as a reminder for individuals to exercise caution and due diligence when engaging in real estate deals.
It is crucial for real estate agents and settlement companies to verify the authenticity of financial documents and conduct thorough background checks on potential buyers. This includes confirming the existence of trust accounts and communicating directly with reputable financial institutions.
Additionally, individuals should be wary of offers that sound too good to be true, such as promises of large tax refunds or unusual financial arrangements. Engaging the services of a trusted real estate attorney can provide an added layer of protection and guidance throughout the buying or selling process.
Cases like this highlight the importance of vigilance and adherence to established protocols in the real estate industry. By following best practices and exercising caution, individuals and professionals can help prevent falling victim to fraudulent schemes and protect their financial interests.