A recent lawsuit out of Palm Beach County has put a spotlight on one of the most serious threats in real estate: the theft of money from a closing escrow account. According to reporting by The Real Deal, the Palm Beach real estate law firm Rabideau Klein has alleged in a court filing that more than $17 million was moved out of its escrow account through a series of unauthorized wire transfers, and that several million dollars has not been recovered. The firm's complaint reportedly names its bank, First Horizon Bank, as a defendant and alleges failures in the bank's security and oversight controls. As reported, First Horizon had not publicly commented on the suit, and it is entitled to respond and defend itself in court.
What the Lawsuit Reportedly Alleges
Per the reporting and Rabideau Klein's complaint, an unknown intruder allegedly gained access to the firm's online banking and carried out multiple unauthorized wire transfers in quick succession, and allegedly altered account credentials in the process. The firm reportedly says it managed to claw back a portion of the funds but that millions remain unrecovered, and it is seeking to hold First Horizon responsible for the balance. First Horizon, as reported, had not publicly responded as of the time of those reports and is entitled to defend itself. Again, these are allegations that have not been tested in court.
The Rabideau Klein Lawsuit, By the Numbers
According to the complaint as reported by The Real Deal, the key figures the firm alleges are:
- ~$17.3 million allegedly moved out of the firm's escrow account.
- 13 unauthorized wire transfers allegedly executed in rapid succession.
- ~$10.7 million reportedly clawed back by the firm.
- ~$6.5 million reportedly still missing.
Rabideau Klein's claims against First Horizon reportedly include breach of contract, negligence, and violations of state transfer laws, and the firm is seeking restitution and other relief. First Horizon — a regional bank with roughly $83.9 billion in assets, according to SEC filings — has not been found liable, the allegations remain unproven, and the bank is entitled to contest them in court.
Whatever a court ultimately decides about that specific dispute, the underlying lesson is universal: when large sums sit in a closing account and move on tight deadlines, security and verification are everything. That's the part every Florida buyer, seller, and closing professional can act on today.
Why Closing Escrow Accounts Are a Target
Escrow and closing accounts are built to do exactly what makes them attractive to criminals: hold large balances for a short time and move money quickly to fund a transaction. Add in the many parties emailing back and forth before a closing — buyer, seller, agents, lender, title company, attorney — and you have a target-rich environment for fraud.
The scale is not hypothetical. The FBI's Internet Crime Complaint Center (IC3) has reported that business email compromise — the email-based scheme behind most wire fraud — accounted for billions of dollars in reported losses in a single year, with real estate among the categories affected. A few minutes of verification on your end is cheap insurance against being part of those numbers.
How Real Estate Wire Fraud Actually Works
Most schemes follow a similar playbook:
- Email compromise. A criminal hacks or convincingly spoofs the email account of a party to the transaction — often an agent, attorney, or title company — and quietly watches the conversation.
- The switch. At the moment funds are due, the fraudster sends an email that looks legitimate with new or "updated" wiring instructions pointing to an account they control.
- Urgency. The message pressures you to act fast so you wire before anyone double-checks.
- Account takeover. In other cases, criminals attack the institution's own login and move money out directly, sometimes changing credentials to slow down the response.
The common thread is that the money leaves before anyone verifies. Stopping it is mostly about slowing down and confirming through a trusted channel.
7 Ways to Protect Your Closing Funds
- Verify wiring instructions by phone — always. Before sending a dollar, call your title company or closing attorney at a number you already have (from a prior document or their official website), and confirm the instructions out loud.
- Never trust wiring instructions that arrive or change by email. A last-minute change is the single biggest red flag in real estate wire fraud. Assume any change is fraudulent until you confirm it by phone.
- Don't use phone numbers from the email. Fraudsters include their own number. Use a number you independently know to be genuine.
- Confirm the wire was received. Call your title company shortly after sending to verify the funds landed in the correct account.
- Use secure portals, not plain email, for sensitive documents. Reputable title companies provide encrypted ways to share information.
- Be skeptical of urgency. "Wire now or the deal falls apart" is a pressure tactic. A legitimate closing can wait the few minutes it takes to verify.
- Protect your own email. Use strong, unique passwords and two-factor authentication so your account can't be used to launch an attack.
Rule of thumb: verify wiring instructions by voice, every time, using a number you already trust — never one from an email. That one habit stops the large majority of real estate wire-fraud attempts.
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How a Title Company Helps Protect Your Escrow
A careful closing agent is one of your best lines of defense. At Atlantic Title Firm, protecting client funds is treated as a core responsibility — through verified wiring procedures, secure communication, internal controls around disbursements, and proactive conversations with clients about how fraud works before money ever moves. We would rather take an extra phone call to confirm instructions than risk a single misdirected wire.
Closings also commonly involve a title insurance underwriter and, in many transactions, a Closing Protection Letter (CPL) — a document from the underwriter that provides certain protections related to the closing agent's handling of funds, subject to its terms. Ask your title company to walk you through the safeguards on your file.
If You Think You've Been Targeted: The First Few Hours
Speed is everything. If you suspect a wire went to the wrong place, or you receive suspicious instructions:
- Call your bank immediately and request a wire recall or reversal. The sooner you act, the better the odds of recovery.
- Contact your title company or closing attorney so they can confirm what's legitimate and help coordinate.
- File a complaint with the FBI's Internet Crime Complaint Center at ic3.gov. The IC3's recovery efforts work best within the first 24–48 hours.
- Keep records of every email, instruction, and transfer to support the investigation.
Don't wait to "make sure" before reporting. If something feels off about a wire, report it first and sort out the details second. Recovered funds are almost always recovered because someone acted within hours, not days.
Does Title Insurance Cover Wire Fraud?
This is a common and important question, and the honest answer is usually no. An owner's or lender's title insurance policy protects against defects in the title — things like liens, forgery in the chain of title, or competing ownership claims. Money stolen through a wire-fraud scheme is generally not a covered title defect. That's exactly why prevention, verification, and fast reporting matter so much: the protection here is in your procedures, not in a claims process after the fact. Some parties also carry separate cyber-crime or fidelity coverage, which is worth discussing with your insurance professional.
Closing in Florida? Let's Keep Your Funds Safe.
Atlantic Title Firm closes residential and commercial transactions across all 67 Florida counties — with verified wiring procedures and a team happy to walk you through every safeguard on your file.
Frequently Asked Questions
Who is Rabideau Klein?
Rabideau Klein is a Palm Beach, Florida real estate law firm. According to public materials, the firm handles high-value residential real estate closings in the Palm Beach area. In 2026 it filed a lawsuit alleging that more than $17 million was moved out of its escrow account through unauthorized wire transfers.
What is the First Horizon Bank escrow lawsuit about?
According to reporting by The Real Deal, Palm Beach law firm Rabideau Klein sued First Horizon Bank after allegedly discovering that more than $17 million had been wired out of its escrow account without authorization. The firm alleges security and oversight failures by the bank and seeks to recover roughly $6.5 million it says remains missing. The allegations are unproven, and First Horizon is entitled to defend itself in court.
How much money is missing in the Rabideau Klein lawsuit?
Per the complaint as reported by The Real Deal, about $17.3 million was allegedly moved out of the account, roughly $10.7 million was reportedly recovered, and about $6.5 million reportedly remains missing. These figures come from the lawsuit and reporting and have not been proven in court.
What is real estate wire fraud?
It's a scheme in which criminals trick a buyer, seller, or closing party into sending closing funds to an account the criminal controls — or break into an account and move funds out themselves. It usually starts with a hacked or spoofed email delivering fake wiring instructions at the last minute.
Why are escrow accounts targeted?
They hold large balances briefly and move money quickly, and many parties exchange emails around a closing. That mix of high value, tight timelines, and email traffic is attractive to fraudsters. The FBI's IC3 has reported billions in annual business-email-compromise losses, with real estate among the affected categories.
How do I protect my closing funds in Florida?
Independently verify wiring instructions by calling your title company or attorney at a number you already know — not one from an email. Treat any change to instructions as a red flag, never wire based solely on email, confirm receipt right after sending, and use secure portals.
What should I do if I sent money to the wrong account?
Act immediately: call your bank to request a wire recall or reversal, contact your title company or closing attorney, and file a complaint at ic3.gov. The first 24–48 hours are critical for recovery.
Does title insurance cover wire fraud?
Generally no. Title insurance covers defects in the title itself, not stolen closing funds. Prevention, secure procedures, and prompt reporting are the main protections; some parties carry separate cyber or crime coverage.
