Recently the Association of Real Estate License Law Officials (ARELLO) provided member jurisdictions with the following important information:

The U.S. Department of the Treasury, Office of the Inspector General, recently issued a "Fraud Alert" regarding the use of fraudulent promissory notes and bonds to attempt to purchase both real and personal property. The alert was originally issued directly to the National Association of Realtors® and was not posted to the Department's website. However, we have obtained a copy of the notice directly from the OIG. The text of the alert is as follows:  

"The Department of Treasury, Office of Inspector General (OIG) is investigating incidences whereby individuals are using fraudulent promissory notes and bonds to attempt to purchase vehicles and real estate.  The OIG has been notified of numerous occurrences throughout the United States where fraudulent documents were used to attempt to purchase vehicles.  Treasury/OIG has also been made aware of incidents in Arizona and Colorado where similar fraudulent documents were used to attempt to purchase homes and an office building. 

The fraudulent documents are not referenced as "U.S. Treasury" bonds or promissory notes.  They are referenced as "personal promissory note" and "private offset bond"; however, they have the name of Henry Paulson, Secretary, U.S. Treasury on the face of the documents.

Treasury OIG has learned that the only type of hardcopy bond issued by the U.S. Treasury that a citizen can purchase today is a savings bond.  All other bonds are electronic and the buyer would not receive a hardcopy document.  Finally, Paulson's name should not appear on any document listed as a private bond or promissory note since these items are not backed or guaranteed by the U.S. Treasury. 

If you have any information regarding this type of fraudulent activity, we request that you contact the Department of Treasury, Office of Inspector General (OIG), Office of Investigations Hotline at 1-800-359-3898 or email Hotline@oig.treas.gov .  Realtors approached by a person giving these or similar circumstances should consider the potential for fraud. Should you suspect fraudulent activity, it is recommended that you contact the OIG Hotline and your local law enforcement agency immediately. Additional information regarding this and other similar fraud schemes can be found at the following Department of Treasury web site:"

http://www.treasurydirect.gov/instit/statreg/fraud/fraud.htm.

[End of Fraud Alert Text]

Examples of the specific notes and bonds referred to in the Fraud Alert may be located at http://www.treas.gov/inspector-general/fraud-alerts

Provided by:  David I. Marsh, ARELLO Law and Policy Consultant

12/12/08