WJFA - How Real Estate Predators Operate

They are as ruthless and as evil as the Eye of Silron in the Lord of the Rings trilogy. They are watchful, looking for easy prey.

Make no mistake. Real Estate Predators, are everywhere and many even delude themselves that they are not thieves.

Some call themselves Real Estate Pirates, and they are numerous and never short on schemes to cheat you out of your home.

Victims are often stunned at how easy it was for predators to steal the home, or that the chances of receiving justice are none to zero.

Below are some examples of the typical types of common Real Estate Frauds. These were taken from real case files and the victims were denied justice.

There are too many types of Real Estate Crimes to list on this page, so, we made a separate page detailing foreclosure scams that certain real estate predators using non-judicial foreclosure process use to steal your home, or, force you to pay them to keep from losing your home. See the Foreclosure Scam page for the full list of foreclosure frauds. There is also a section for predatory lending and mortgage fraud on this site.

Real Estate Listing Scam

Thousands of people owning unimproved land in areas of Florida, where such property is difficult to sell, were targeted by a group, which told them their properties would be advertised for a full year and that they themselves would buy any which did not sell in one year.

In reality only one or two inexpensive ads were placed in local newspapers in exchange for fees which ranged from $249 to more than $800. None of the ads resulted in sales and no guaranteed purchases were made.

Another group which used tax rolls to gather leads contacted property owners and persuaded them to purchase additional land on the pretext that this newly purchased land could be packaged with the land they already owned and then sold to non-existent European investors at a tremendous profit to the victim.

Low-income Housing Investment Tax Scam

Citi-Equity of California urged investors to buy shares in limited partnerships in order to purchase properties for the construction of low-income housing projects

The promoter assured investors that once the units were rented they could claim up to $9,900 a year tax credit for ten years thereby helping the poor and saving taxes at the same time in a government-endorsed program.

By stringing along builders he was able to embezzle about $130 million from 7,000 investors who, in addition to their losses, ended up having to pay back the written-off taxes because the project never materialized and therefore wasn't eligible for the tax credits.

This one is growing at a phenomenal rate. Be very careful when using your home or your home equity as security for a home improvement loan.

Fast talking salespeople offer to refinance your home at a lower interest rate to provide cash to the homeowner, explaining the cash can be used to pay for home improvements or to pay off bills.

Later, the homeowner discovers that they signed a contract that contains terms in contrast to the originally promised terms. This results in the loss of equity in the victim's home, and also they have signed a mortgage in which they have incurred considerably higher interest rates. The homeowner is now faced with a higher mortgage payment, one that they may not be able to afford.

You're more likely to be a victim of a real estate fraud from a family member than any other type of crime. It'll be forged grant deeds, forged deed of trust and or a forged promissory note.

Some 10 million people were hit by identity theft last year, which is the precursory to real estate crimes. Also, as many as 900,000 of the victims were victimized by their own flesh and blood.

Too often no one wants to believe their own siblings would cheat them. Sadly, the statistics show that you're more likely to be defrauded by a sibling or child than than a stranger.

Don't count on law enforcement to provide justice. Too many victims report being told be prosecutors, "we don't get in involved in family on family crimes."

A businessman who wrote about his rags-to-riches story in numerous books dealing with real estate investment opportunities plead guilty to six felony charges related to a multi-million dollar scheme in which he defrauded scores of mostly elderly investors.

This president and chief executive officer of American Capital Investments Inc. was the author of "One Up On Trump" and ten other books about real estate investment and personal motivation. In his books, newspaper ads and in numerous public appearances at seminars and on television broadcasts, he portrayed himself as a Vietnam vet and former alcoholic who lived on the streets and in his car for a while.

He claimed to turn his life around in the early 1990's when he started ACI, which developed into a $100 million commercial real estate firm. He portrayed himself as a real estate investment genius - the next Donald Trump - but the empire was built on the lies he told clients to secure their investments.

He got investors to provide capital to purchase commercial office buildings by misrepresenting various facts, including falsely stating that another buyer had been lined up to purchase part of the particular property he was buying, and that the quick sale of a portion of the property would allow him to pay back the investors with a substantial profit in as little as thirty days. He also misrepresented the profitability of the buildings he was purchasing, and, in some instances sold interests in buildings that he had never purchased or owned.

Leaving out such particulars, he published books that touted his investment strategy and using those books to lure new investors to ACI he was able to raise more than $18 million from investors who lost at least $10 million.

Two people defrauded approximately twenty investors, mainly family members and family friends, out of over $200,000 through a development scheme which was to rival Disney World.

They began by promoting their concept of constructing a huge theme park and entertainment complex. They advised potential investors that their "Dreamworld" was going to feature an underground roller coaster, high tech virtual reality rides and traditional amusement park attractions. They also promoted Dreamworld's series of satellite parks, such as a 172-acre Western equestrian center, a 30-acre water park, and a three-rink Ice Palace that would feature a speed-skating rink suspended above it.

They falsely told family members and friends that Dreamworld had received a $300 million financing commitment from a New York-based financial institution; that Dreamworld owned the parcels of land needed to build the planned equestrian park; that Dreamworld held valid options on the other parcels of land needed to construct the theme park; that major U.S. corporations, such as Miller Brewing Company, had committed to sponsoring Dreamworld; and that any investment in Dreamworld could not be lost because of the existing assets of the corporation.

These misrepresentations were made as part of a fraudulent sales pitch in which investors were falsely advised that they had to purchase their Dreamworld stock immediately, because it was on the verge of closing to outside investors.

Groups advocating change say that the criminal laws lack teeth to take a bite out of the Real Estate Crimes, because the real estate civil code provides too much room for scamsters to manipulate.

The American Homeowners Resource Center say they are focused on the Homeowner's Associations because that is where they are seeing the most abuses, especially with the elderly.

WJFA is in the process of organizing to address the problem of inadequate laws, and especially officials not enforcing the laws.

Real Estate Fraud How Predators Operate

Real Estate Fraud
How Predators Operate