A cautionary tale of real estate fraud: Buyer beware!

There was the tip off. Right in front of my face. How , I wondered, did the victims of this massive real estate fraud not recognize larceny as it stared them right in the face?

But there it was in the article I was reading as it came into full view on my laptop: Said the New York Times, "Mr. Puff drew investors by advertising guaranteed annual returns of 15% to 20% from his business of buying, renovating and reselling real estate."

Really! 15% to 20% annual returns!

That should have been the tip off right then and there. But it wasn't for more than 1,200 investors who, in total, handed over more than $123 million dollars to Wayne Puff's Ponzi scheme .... the investors ended up losing $55 million.

On Thursday, Puff was sentenced to 18 years behind bars in a federal prison and ordered to return more than $100 million to the victims of his scheme.

The FBI offers on its website some common sense tips for avoiding becoming a victim of a Ponzi scheme (and other schemes).

And while real estate values are nowhere near what they were when Mr. Puff (you gotta love that name!) started his con-game back in 1998 ( it lasted till 2005), do not for a minute think there aren't all sorts of con people lurking out there promising a return on real estate investments that should make you run for the door, if not to the feds.

In fact, now that real estate values are depressed, it is a golden opportunity for the crooked among us to try and take advantage of people desperate for a quick return on the buck.

Don't think that would happen now, with the real estate market deflated like a 100-year-old bicycle tire?

Last month, a Michigan woman was busted and accused of defrauding dozens through a real estate Ponzi scheme involving foreclosed properties ,of all things. Foreclosed properties! And, sadly, people, of course, fell for it.

Charles Feldman is a journalist, media consultant, and co-author of the book, "No Time To Think, The Menace of Media Speed and the 24-Hour News Cycle."

Read Full Story


NASDAQ 7,318.89 22.84 0.31%
S&P 500 2,802.14 4.11 0.15%
DJIA 25,966.43 -51.38 -0.20%
NIKKEI 225 23,808.06 44.69 0.19%
HANG SENG 32,254.89 132.95 0.41%
DAX 13,434.45 153.02 1.15%
USD (per EUR) 1.22 0.00 -0.01%
USD (per CHF) 0.96 0.00 0.34%
JPY (per USD) 110.60 -0.42 -0.38%
GBP (per USD) 1.39 0.00 -0.22%

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.