KANSAS CITY, Mo. - Housing documents somehow signed by dead people, and homeowners who had no idea the deeds to their properties had been forged.
After uncovering a real estate fraud scheme in February, 41 Action News kept digging on the story.
The ongoing investigation revealed a growing trail of "dirty deeds," and evidence of a crime that's so shockingly easy, there is very little to stop it from happening.
Homeowners surprised to learn of forged deeds
Stanley and Evelyn Ho bought a home in south Kansas City about 25 years ago. At the time, the location was ideal for the restaurants Stanley operated inside the Bannister Mall.
Since then, the Johnson County couple has held onto the rental property in hopes the neighborhood surrounding the demolished, blighted shopping area will eventually make a turnaround.
This summer, 41 Action News contacted the Hos to ask them about the property they used to own.
"What do you mean used to own?" a confused Evelyn said by phone.
41 Action News met with the couple and showed them a deed they had supposedly signed in April of 2012, transferring the home to a complete stranger.
"I don't write like that. That's terrible," said a baffled Evelyn. "They didn't even spell my name right. I'm so dumbfounded, I don't know what to say."
The Hos paid more than $1,800 in property taxes in March. But according to Jackson County property records, the home is no longer listed under their name.
Stanley had just mowed the lawn a day before meeting with 41 Action News.
"I could never dream anything like this would happen. It's amazing!" he said.
Notaries also perplexed
Just like homeowners, notaries contacted by 41 Action News were surprised to see their names on the housing documents.
Larry Shindler, a car salesman in the Midtown area of Kansas City, could not figure out how his stamp and signature ended up on three real estate deeds. Shindler, a commissioned notary of 25 years, said he only does bills of sale for vehicle sales.
"I've never heard of these people and never heard of the addresses," Shindler said. "I certainly didn't do this and it don't make me feel too good, either."
After the original February investigation, 41 Action News connected a new web of questionable deeds.
One deed has the 2012 forged signature of a man who died in 1988. Another fraudulent deed was a property owned by the federal government's Department of Housing and Urban Development (HUD).
Notaries are the only gatekeepers in place to determine if the documents are legitimately signed, but it appears they are also the victims of forged signatures.
To date, 41 Action News has communicated with eight notaries who dispute ever signing off on the deeds, despite the presence of their official stamps on the documents.
Forged signature takes thousands of dollars to fix
In March, Dan Gray was gathering records for his annual tax preparation. The California resident owns several investment properties in Kansas City. Gray searched online to verify that he had remembered to pay property taxes on each of the homes.
However, he noticed one of the properties in the 5000 block of E 42nd St. no longer showed up under his name.
Further investigation revealed a deed that he and his wife had supposedly signed in June of 2012.
"It sucked. You get that pit in your stomach. You don't know what to do and you feel helpless," Gray told 41 Action News.
Gray hired attorney Jerome Murphy, who filed an "affidavit of fraudulent deed." Several thousand dollars of legal fees later, the property is rightfully back under Gray's name.
"I was surprised at the brazenness of the criminal forging-- not only the signatures of the owners but also the signatures of the notaries," Murphy said. "It's like a daylight bank robbery."
During the period of legal uncertainly, Gray lost income because he was hesitant to rent out the property to tenants or spend money on improvements.
Gray shakes his head at the headache caused by one forged signature.
"It is shameful how easy this is," he said. "It appears to be a huge loophole in how we process deeds and handle online information."
Recorder of Deeds director reacts to details of scheme
Robert Kelly has been director of Jackson County's Recorder of Deeds Department since 2003. And this might surprise you: he agrees it's an easy crime to pull off.
"I don't want to scare people, but I think reports like yours help alert people of schemes like this," Kelly said.
Kelly spoke with 41 Action News to help clear up misconceptions about the responsibilities of his office. He knows people are wondering why employees working in the Recorder of Deeds Department aren't doing more to stop the fraudulent deeds from being filed.
For instance, 41 Action News exposed one man's
involvement with a forged deed scheme in February. But later this summer, the same man was captured on surveillance video at the Jackson County Courthouse, transferring more questionable properties.
Kelly said the Recorder of Deeds Department's responsibilities are spelled out by lawmakers in Jefferson City . If the deed has the required information and is notarized, the office collects a fee and makes it public record.
But there is no cross-referencing to see if the people who signed the documents are alive or if the notaries are currently commissioned by the state.
"It would be ideal if we could do all those things," Kelly said. "If we were lawyers, we could check the legality of a document. If we were police investigators, we could be trained to check the authenticity of a signature."
An expert in white collar crime who spoke with 41 Action News for the February investigation said perpetrators are making money by either renting out the properties (if vacant) to tenants or by selling the home for cash to unsuspecting buyers.
Kelly cautioned people to pay attention to warning signs like houses being offered with urgency at prices far below market value.
On the positive side, he said the recorded documents provide a paper trail for criminal investigators. In the past, Kelly said his office has cooperated with local and federal law enforcement agencies.
"These individuals will be caught," he said.
Is there a change that could help prevent problem?
Until a change is made to the process, it appears red flags on housing deeds will continue to fly under the radar undetected.
For example, the deed supposedly signed by the Hos in April 2012 had the stamp and signature of notary Michael Buffington.
But there is one major problem: Buffington didn't even become commissioned as a Missouri notary until six months later in October of 2012.
"This is absolutely fraud," Buffington said when contacted by 41 Action News. "It appears someone has made a copy of my stamp and credentials. I checked my bag and I have my stamp in my possession so it has not been stolen, which is even more concerning."
Buffington said he notified the Missouri Secretary of State's Office, which appoints and commissions notaries public.
Meantime, the Hos were so upset they immediately drove to the Jackson County Sheriff's Office to file a criminal complaint. Their situation and others remain under investigation, a Sheriff's spokeswoman said.
"I said to myself, ‘This is America. How could this happen?'" Evelyn said.
Who's behind this new web of forged deeds? 41 Action News is continuing to investigate. Stay tuned for developments to this ongoing story.