Housing News

Talk About a Ponzi in the RE Industry

This latest scam may have been duplicated in other cities.

It seems that real estate scammers are indicted one by one these past few months. The latest involves five con artists of Metro Dream Homes in Laurel, MD who duped over 1,000 people into investing in a business that supposedly involved ATM machines, TV ads and calling card kiosks with the profits to be used for mortgage payments. But the Associated Press reveals, “The investments were used to pay company salaries of up to $200,000 and maintain a fleet of luxury cars and a staff of 10 chauffeurs. And company officials allegedly traveled to the Super Bowl and the NBA all-star game with investor money. Investigators said the scheme was elaborate—early investors whose monthly mortgage payments had been paid by money provided by later investors assured potential recruits that the program worked. Investors were told the company made as much as $10 million a month.”

Back in January, the frozen assets of the heavily indebted company were auctioned off. We’ve discovered that among those sold at the bidding included flat screen televisions, fax machines, phone systems, office furniture, a framed NFL uniform and many more. That’s how the management splurged on the investors’ money without of course, paying their mortgage.

It’s not difficult to realize why thousands of homeowners are flooding state officials with their complaints these days. When the housing bust brought homeowners into delinquencies and loss of home equity, they were many who gave in to tempting invitations by shady operators.

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