FTC shuts down overseas real estate scam

Real estate investments can be risky, particularly when it is for property outside the United States. Serial scammer Andris Pukke and others have now been charged with swindling more than $100 million out of American investors for property located in Belize. According to the Federal Trade Commission, this is the largest overseas scam that it has ever investigated and shut down.

Well known to authorities, Pukke allegedly conducted this scheme with cohorts while he was serving time in jail for obstructing justice. The project was reputedly a luxury development in the Central American country, which went under such names as Sanctuary Belize, Sanctuary Bay and The Reserve. The defendants are accused of selling luxury lots as Sanctuary Belize Enterprise (SBE) with a variety of amenities that would be completed soon.

False claims and lies

Those who showed interest (ads were run in Bloomberg and on Fox News) were contacted by telemarketers for SBE who pitched the sale of these properties using a series of false claims:

• SBE used a no-debt model which supposedly was less risky than making payments to a bank
• All money paid to SBE went into the project
• Continual funding would speed the completion of the project (2-5 years)
• The amenities would include a hospital staffed with American doctors, a golf course, an airstrip and an airport with direct flights to the U.S.
• Buyers could easily resell their lots
• The lots would double or triple in value within a few years

A cautionary tale

The tragedy of this fraudulent scheme is only deepened by the fact that the defendants targeted those who were elderly, perhaps retired or on a fixed income. There are examples of real estate scammers all over the place, but as the FTC pointed out, few have been as large and brazen as SBE.

Those interested in making real estate investments are always best served when they discuss a potential agreement or contract with an attorney. Legal guidance can protect individuals from unfair deals or potentially iffy investments.