The reporter used a notary seal with the name of a famous bank robber Willie Sutton and listed King Kong actress Fay Wray as a witness in his undercover investigation.
It took just 90 minutes for a clerk at the property register office to verify the transfer of the deeds for the iconic building to a fake company Nelots Properties which the reporter created. Nelots read 'stolen' backwards.
It uncovered a loophole that means clerks in the city office of the property register are not required to verify information on deeds and mortgages.
Lawyers in the city believe that numerous sophisticated con artists are using the loophole to obtain millions of dollars in mortgages on stolen properties throughout New York.
'It's outrageous. The loophole allows anyone's home to be stolen,' said Brooklyn District Attorney Charles Hynes. He called for a new law to be introduced urgently giving the register's office the time and power to check transactions before they are recorded.
Colleague Richard Brown, district attorney in Queens, said title companies, mortgage brokers and banks all have to tighten procedures to prevent fraud, including a vigorous check on anyone involved in property transactions.
'We absolutely have to eliminate the power of attorney in property transactions. That's a big opening for fraud because who knows if it's real and the real owner is being represented,' he said.
Brown, along with the city's other district attorneys, is prosecuting numerous cases of alleged deed fraud.
City Controller William Thompson said it is very easy to fraudulently transfer property titles and described the current system as being full of critical flaws. His office has proposed encrypting signatures on deeds with bar codes to prevent forgeries.
'The banks should be much more careful and stringent in verifying information before they give out mortgages,' said Chief Assistant Manhattan District Attorney Dan Castleman.
