Purchasing a property via tax deed is a great way to get involved in real estate investing. Unfortunately for a homeowner in New York that has been fighting for his home for almost seven years now, a tax lien paved the way for a Long Island woman to forge his name, take possession of the property and then sell it multiple times to other investors[1]. Garfield Gillings let his tax and water bills slide on his Brooklyn house back in 2003. When he contacted the collection agency that he believed was in possession of the lien, he was told that the lien had been satisfied – by him. Someone posing as Gillings had paid the bill, forged his name on a deed and, once the property and water liens were cleared, first signed the property over to a holding company and then eventually sold the property to another business entity.
While the woman who masterminded the theft is now in jail for 5 to 15 years thanks to her thievery of Gillings’ house and more than 30 other properties, Gillings himself has not yet managed to prove his own ownership. When he fell behind on his taxes and the lien was turned over to a collections agency, the delinquency probably “drew the attention of predators who paid the lien and, posing as owners, unlawfully sold the house to an entity that they controlled,” speculate prosecutors involved in the case.
While Gillings once more has access the property, he has not yet been able to unravel the fraud. The house was sold at least once more – to that investor’s detriment as well once the deed turned out to be forged – and the home was seriously damaged by vandals and workers hired by the “pretender owners” to clear and clean the property. Because the woman who stole the house did not specifically refer to the address of the property when she pled guilty, Gillings’ ownership cannot be automatically restored.
This is among the more publicized instances of con artists and thieves using payment overdue tax liens to take ownership outside of the legal system. As a tax lien investor, you should always use the legal system and certified tax lien auctions to purchase tax deeds and tax liens.
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[1] http://www.nytimes.com/2011/01/17/nyregion/17house.html