A Haven for Con Artists
Without too much exaggeration, Southern California can lay claim to being the real estate fraud capital of the United States.
We can add, with a little poetic license, that our mountains, our desert and our seashore provide havens for the old confidence game and its perennial targets, real estate and investments.
The Southland’s traditional receptiveness to the unusual and the chancy, new ideas and products, has created an anything-goes attitude and a reputation for the zany things in life.
The great wealth resulting from land, oil and development; the glamour attendant to the entertainment, fashion and amusement industries; our inseparable romance with the automobile, our craze for sports and recreation--all of these have created world-wide attention.
The confidence-game players, very much aware of the penchant among so many Southern Californians to delve into uncertain or easy-money and bargain ventures, have long found fertile ground for their purposes.
That’s why we have so many victims of fraud and deception involving real estate. None of this helps the image of those who make their living from real estate and realty investments. They are already far down the public image ladder (in company with journalists), but still above used-car salesmen, the constant low-men.
During the month of May, the four following cases, widely reported in the media, illustrated this plight:
The head of a Costa Mesa home-mortgage firm was found guilty of mail fraud involving second trust deeds. Of more than 7,000 persons who had invested money, 4,306 will suffer principal losses.
About 400 investors, naively expecting up to 25% annual interest on their money, were bilked through purported business ventures in Mexico and South Korea. The Covina-based culprits also promised that 10% of all funds raised would be earmarked to “spread the gospel” in those countries.
A Del Mar-based realty investment company, having mismanaged and commingled about $66 million, is in receivership, under the jurisdiction of a federal judge. Forty-four partnerships are the victims and the Securities & Exchange Commission is also suing the firm.
Buyers of condominiums in a 64-unit Los Angeles hillside project are battling to retain their homes in the wake of a condominiun-lease option plan that went awry. In a $40-million lawsuit, the victims claim they were bilked out of $183,000.
Greed and the understandable yen to be part of a “good thing” are constant ingredients playing conveniently into the hands of con men.
That’s not likely to change much. And, obviously--thank goodness--most transactions are not intended to be fraudulent.
But for some would-be investors, those who are bait for a get-rich-quick scheme or, as one self-proclaimed real estate millionaire and best-selling author now advises, “get rich slowly,” there is always enticement.
For them, it’s most often the hard way. If the “deal” is too good to be true, it most often is.