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President of firm convicted of fraud in real estate deals

The process of buying and selling commercial real estate property in Florida has many complexities. For this reason, there will always be opportunities for dishonest players to perpetrate acts of fraud as a means of turning a profit. A recent story that comes out of Virginia can serve as a lesson in how a mendacious broker may attempt to illicitly skim proceeds from the sale of property.

The United States Attorney’s Office for the Eastern District of Virginia recently released information regarding the conviction of the president of a brokerage and advisory firm. The firm’s president received an 11-year sentence for his participation in fraudulent activity pertaining to the sale of various hotel properties. Court records indicate that the firm president carried out three separate schemes, which represented in excess of $55 million in economic losses. He entered a guilty plea for wire fraud and conspiracy to commit wire fraud.

One of the schemes involved the president being hired as a broker by a real estate company to sell two hotel properties. He was able to secure legitimate buyers who offered an agreed upon fair market price. The president then employed the services of straw buyers to whom he had the real estate company sell the properties at a reduced price. After this transaction, straw buyers sold the properties to the legitimate buyers at the previously agreed upon bid. The president then kept the difference for himself.

In addition, the president also ran a Ponzi scheme and used multiple aliases as part of an extortion plot that he carried out on a Tampa-based investor in a deal involving a Pittsburgh hotel promissory note.

In order to perpetrate such a volume of high dollar crimes, a person would have to have knowledge of how commercial real estate deals are executed and where the openings for exploitation exist. This is what makes fraudsters so dangerous.

If you find that you have been in some way defrauded while trying to conduct a legitimate business deal, a Florida attorney may be able to help expedite a civil suit to recoup your losses.

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Warren Gammill & Associates

Suite 400, Courthouse Plaza
28 West Flagler Street
Miami, Florida 33130

Phone: 305-579-0000
Fax: 305-371-6927

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