The Associated Press reported the real estate investment scam to be approximately $142 million in fiscal scope. The defendants used seminars, internet ads, and word of mouth to lure people in Riverside County, California and Arizona to invest in a series of shell companies. The bottom dropped out on their ponzi shceme when the real estate bubble burst.
According to the California Real Estate Fraud Report, like all good ponzi schemes, friends and relatives were convinced this was a good real estate investment, and refinanced homes, cashed in their retirement plans and used money they didn’t have to invest.
By Kim Onisko, CPA
Kim Onisko is a Partner with Onisko & Scholz, Certified Public Accountants, LLP. You can find him on Google+. He has been in public accounting for over 20 years and has a specialty in forensic accounting.