In the early morning hours of a Thursday in January, more than $17 million disappeared from the escrow account of prominent Palm Beach real-estate law firm Rabideau Klein, according to a new lawsuit. The firm says it clawed back roughly $10.7 million, but about $6.5 million is still missing. To recover the balance, Rabideau Klein has sued First Horizon Bank, alleging a cascade of oversight and security failures that let an unknown intruder move money out of the account in rapid-fire succession.
How the Suit Says the Money Was Taken
According to The Real Deal, the complaint claims a “threat actor” broke into the firm’s online banking and executed 13 unauthorized wire transfers. The intruder is alleged to have changed passwords, created a new user ID, disabled existing user accounts and even called the bank’s service line to request a replacement RSA security token.
The filing includes a recording of that service call, in which the caller audibly struggles to recite the account number, saying, “okay, uh, their account number, um, one moment, that would be . . .,” a detail the firm cites as part of its internal investigation into what happened.
Bank Scale and Why It Matters
First Horizon is a regional bank with roughly $83.9 billion in assets, according to SEC filings. With that footprint, the bank handles extensive private-client and escrow relationships across Florida and the broader Southeast, so any breakdown in controls can have outsized consequences for high-dollar real-estate transactions.
What Rabideau Klein Wants in Court
The lawsuit asks the court to hold First Horizon responsible for the roughly $6.5 million the firm says has not been recovered, alleging breach of contract, negligence and violations of state transfer laws. Rabideau Klein says about $10.7 million of the original $17.3 million was ultimately recovered.
The firm’s outside counsel, Anthony Yanez, declined to comment, and a First Horizon spokesperson did not respond to requests for comment, as reported by The Real Deal. The complaint seeks restitution, interest and other relief tied to the alleged failures in handling the account.
Why Escrow Accounts Are Catnip for Crooks
Escrow and closing accounts are frequent targets for Business Email Compromise and wire-fraud schemes because they are designed to hold large, short-term balances and move quickly. The FBI’s IC3 2024 report says business email compromise led to about $2.77 billion in reported losses, with real-estate-related complaints alone accounting for more than $173 million in losses last year (FBI).
Public materials from Rabideau Klein show the firm handles high-value residential closings on Palm Beach Island, which highlights just how much is at stake when protections around escrow funds fail (Rabideau Klein).
What Happens Next
The case is still in its early days. Rabideau Klein filed its complaint this week, and First Horizon will have a chance to respond in court. Local real-estate attorneys, title companies and their clients can expect close scrutiny of the bank’s internal controls and forensic response as the litigation moves forward.
For now, anyone involved in a closing is being reminded of the basics: independently confirm wiring instructions and move quickly to alert law enforcement and the FBI’s IC3 portal if something looks wrong. In high-dollar deals, a few extra phone calls can be the difference between a smooth closing and a multimillion-dollar mess.
