For every legitimate real estate professional, there are one or more fraudsters. In our experience, sometimes people get in way over their head and tilt over the line to some type of fraud, but it really hurts when the fraudster never intended to be honest, at all. Such is the case with Robert Gibson who defrauded investors from California and Texas of roughly $800,000. Apparently, there were claims made that homes needing work could be bought cheap and then re-sold before any auctions were to occur. The pitch was apparently bogus from that start, as sources indicated that the houses shown to the now defrauded investors were never for sale and not even one single home was ever bought with the money. Investigators revealed that this was also not the first scheme of the same kind perpetrated by this individual.
There are several possible lessons or tips to be learned from this incident. Below are mere opinions and NOT to be considered tax, accounting, financial, investment, nor legal advice. If it were us, we might…
- Do some actual due diligence on the individual or organization purporting to find or complete any deals
- Ask to see a sample of a previous completed deal that can be verified
- Ask to see a copy of a contract so you can confirm with the closing agent the details before funding
- Ask the closing agent to record a lien to you or your organization as a condition of funding before closing
- Wire money directly to the closing agent and not the individual group or fund
- Pay a contractor directly
- Take a more active role in where and how your money is to be used
Even the best of us can fall prey to unscrupulous individuals but real opportunities do exist, so be careful not to throw the baby out with the bath water. If you are like us, we worked hard for our money, so to us, a little extra effort up front could save a lot of heartache later. The real con artists like Gibson often have a lengthy track record of crimes that can be uncovered with a little research. Gibson apparently had started a criminal career as early as 1994, when he supposedly claimed to be an attorney (but wasn’t).