Thursday, September 8, 2016

Guru Faces Multiple Fraud Charges

Well placed sources have confirmed a very well known real estate guru from the pre-crash 2000s boom is facing a criminal investigation by both state and Federal agencies.

This guru was known for his real estate wholesaling programs where he claimed to make thousands of dollars every month without tenants using his unique program where anyone could find and flip properties without cash, credit, or even a job.  Essentially, this was a subject-to buying scheme.  At one point he claimed he was earning $100,000 a month working five hours a week.

The investigations began when this guru's partners and bank grew concerned over financial statements submitted to them about recent seminar and home study course sales.  It turned out the guru had been overestimating sales and profits to not trigger loan provisions which would call his debt immediately due.

As the investigation expanded it was learned this guru had phantom employees on his payroll, issuing checks to workers that did not exist which were later cashed by his relatives, including his wife and brother.  Ironically, taxes were paid on these checks to keep the scheme looking legitimate.  But tax returns were not filed on these fictitious employees which has now raised the scrutiny of the IRS and the use of stolen or fake social security numbers.

Total investor losses on this scheme appear to be more than $1.5 million.

This guru was everywhere on the Internet in the early 2000s.  Their wholesaling program was a joke, underestimating the risks and profits which can be earned by wholesaling real estate, which is basically selling real estate property interests without a license, often illegal in many states.  Here is an excellent Reddit thread on the subject of real estate wholesaling and its illegality.

Should this guru be arrested or indicted I will let you know.

No comments:

Post a Comment