FTC halts massive real estate scam

by | Nov 26, 2018 | Real Estate

Real estate investments or vacation properties hold a certain appeal. Some investors like the fact that they actually own something tangible as opposed to playing the stock market. Others hear stories of major paydays for those who bought early and then cashed out.

With so much money involved, it is not surprising that real estate attracts its fair share of scammers. Nonetheless, the Federal Trade Commission’s investigation of a fraudulent real estate scheme in Belize worth $100 million is still eye catching. This request in the Federal District Court temporarily shuts down the largest overseas real estate scam the FTC has ever investigated.

Scam conducted from jail

The scheme by a company called SBE was to sell luxury property in the Central American country of Belize using such names as Sanctuary Belize, Sanctuary Bay or The Reserve. The company is led by serial scammer Andris Pukke, who is already in jail for obstructing justice. Pukke’s company advertised luxury lots as retirement or investment opportunities on Fox News and Bloomberg. When people called the advertised number, they were led to believe by trained telemarketers that these lots were part of a development that would soon have a hospital staffed by American doctors, an airport for direct flights to the U.S., a private airstrip, a golf course, and other amenities. Other false claims including finances included:

  • All money paid to SBE went into the project
  • SBE used a no-debt model that was reputably safer than payments to a bank
  • The business plan was to use the continuing influx of cash to complete the project in two to five years
  • Buyers could double or triple their money in just a few years
  • The lots would be easy to resell if investors changed their minds

Attorneys can sniff out fraud

The story is perhaps even more tragic because SBE targeted the elderly and those thinking about their retirement. This brazen attempt to steal Americans’ money was fortunately stopped by the FTC, but some real estate scams involve less money or deals here in Texas. It is recommended that those considering buying real property should speak with attorney who can look at the contract and check on the history of the businesses involved.