Woman out $2.2 million in connection with Dewey Beach property scam

What was supposed to be the purchase of a $2.2 million Dewey Beach home fell through after fraudsters hijacked the closing-cost transfer.

Johanna Berkowitz, who is represented by attorneys in Wilmington and New York City, is now seeking reimbursement from up to 100 people not known at this time, and only referred to as John Does in a lawsuit filed in the U.S. District Court for the District of Delaware.

Filed Jan. 26, the lawsuit states that Berkowitz intended to buy a piece of property in 2025 in Dewey Beach for $2.2 million. She understood through her real estate agent, Charles Schwab, that closing costs would be $2,209,240.

Fraudsters, however, were able to hack into the settlement process by Nov. 19, when they used a fake email address purporting to be from a real estate coordinator at the law firm representing Berkowitz. The fake email sent instructions for closing funds to be wired to a Truist Bank account, which were then withdrawn and sent elsewhere.

“The fraudulent redirection of funds was accomplished by unknown individual(s) through unauthorized access to and misuse of electronic communications and systems integral to the closing process,” the lawsuit states.

Berkowitz’s attorneys have issued preservation demands to the financial institutions involved in the closing, and are trying to identify the fraudsters any way they can through banking records, IP logs and other sources.

If anyone can be connected to the fraud, the suit states, their real name will be later added to the complaint.

Berkowitz is asking for at least $2,209,240 in damages with additional money for punitive or exemplary damages, attorneys’ fees and other costs authorized by law.

The lawsuit also asks for an injunction to prevent the unknown scammers from accessing, selling or destroying Berkowitz’s computer systems, networks or data.