St. Petersburg lawyer warns of title fraudsters stealing properties

St. Petersburg attorney Larry Silvestri is on a mission of sorts to spread the word about the threat people and businesses face to their properties.

The owner of his self-titled firm — Silvestri Law — is warning about how easy it can be for thieves to come in and steal a title to properties. Fraudsters, he says, simply file a deed on a property they don’t own and monetize it once the deed is recorded. The owner in most cases doesn’t even know it happened until bills start rolling in.

Silvestri came to the topic from a television commercial that got under his skin.

He is a real estate attorney but hadn’t begun working on title insurance yet. The commercial was for a monitoring system that showed how simple it was for fraudsters to take advantage of people.

“I thought, ‘Come on, is that really a big deal?’” he says.

“It just kind of bothered me because I know there's a lot of things that you get subscriptions for that you may not need.”

It turns out, it was a big deal: the real estate industry lost $446 million to scammers in 2022, according to FBI data. 

Silvestri recently spoke to the Business Observer about the issue and what property owners, both residential and commercial, can do. Edited excerpts: 

We've seen and heard quite a bit about title fraud and deeds being stolen happening on the residential side. How common is it on the on the commercial real estate side?

Vacant land, which can be either residential or commercial, appears to be a big target because there's no one there. The fraudsters search the records and find that it's vacant land and then they basically (create) fraudulent deeds or (commit) identity theft.

The owner ends up finding out when the mortgage doesn't get paid. Sometimes it's a second mortgage or a third mortgage that doesn't get paid. And then they have to go in and try to undo, unring the bell. And that generally requires a quiet title action and getting attorneys involved.

(A quiet title action is a lawsuit to clear any clouds on titles)

In commercial, specifically, what's been happening with some regularity is that these fraudsters are looking for property owned by Delaware limited liability companies or Delaware corporations. And then they form a Florida corporation or limited liability company with the same name. So, on the (state’s Division of Corporation’s database) it actually shows Joe Blow owns ABC Company. If you're not careful as a title, agent, or anyone else dealing with this property, if you don't realize that it's actually a Delaware corporation that owns it, the transaction occurs.

Given the sophistication, what can property owners do to protect themselves?

The counties, and they've been doing this for years it’s just not known to everybody, have registration processes. It’s a local registration, and if you register and anything happens on your title, if something gets recorded, then you'll get notified. That's still after the fact. But the sooner you find out, the easier it is to unring the bell before somebody ends up borrowing money or selling it to some unknown person.

Is anything being done, governmentally, to make it more difficult to commit fraud and easier to clean up when it does happen?

In the 2023 legislative session, the Florida Legislature passed House Bill 1419. On June 14, 2023, the bill was approved by Gov. Ron DeSantis. This creates a procedure and guidelines to try to thwart real property fraud. It is tightening up the execution of documents to make it (less) difficult or possible to catch irregularities. There are also some new provisions to govern the actions to quiet title, creating a summary proceeding which, while you'd likely still need an attorney, it makes it quicker and easier to unring the bell. And there's a new quitclaim deed form mandated which will make it easier for someone like me looking at a deed to say, “Oh, that doesn't look right.” I consider these incremental changes. The fraudsters, in some cases, stay one step ahead, but it's becoming more difficult.

Is there anything else a person can do to protect themselves if they’re a property owner?

Just like identity theft in general, everything that you can do to avoid identity theft —including credit monitoring — I would say. But I don't have a silver bullet. Like I say, a lot of it is responsive not proactive. One could imagine a system that works better than the system that we have. But the resources for that, on the county level, to have a county clerk be required to do the investigation before recording, isn’t in the budgets.

How did you first learn about this problem?

I've been an attorney for a long time. I've been in private practice in St. Pete for coming on eight years. But I did transactional stuff, not title insurance. Last year, I became a title agent. I'm a solo attorney. I actually hired a full time paralegal. And I thought, ‘Okay, now I've got the bandwidth to actually do the title work as well’ because I had clients asking, ‘Why don't you do this?’ My focus was on the commercial transactions.

Once I started going through the training to be a title agent, it gets pounded into you that there's all this fraudulent activity going on. Title fraud. Wire fraud, where you have fraudsters that intercept emails and give title companies false payoff information so that they wire the funds to their account, which is super common. Really, that's not affecting consumers so much, because it's the title company, or the law firm, that's in the crosshairs.

But I just started getting more interested in in this because I became a title agent and found out that it's it's more common than I thought and it's important to take some steps to protect yourself.