Generating passive income is typically a key objective of any investment plan. Active investors look for ways to put their money to work so that it earns interest and produces revenues. Even through the rough times of the recent recession, real estate was the option many exercised to achieve their passive income objectives.
Putting money into real estate securities can be a lucrative endeavor, but it can lead to a great deal of frustration and financial ruin without proper care. Too often, brokers and dealers engage in misrepresentation or conceal the transactional works of their real estate programs. Huge losses can result. Victims may be able to pursue restitution with the help of an experienced attorney.
Whether any of the victims of one Escondido man will ever see any of their money again is not clear based on current news reports. The 55-year-old developer and mortgage broker recently pleaded guilty in federal court in San Diego to charges that he defrauded more than 50 individuals across the country to the tune of $50 million. He is slated to be sentenced in July and faces a maximum term of 20 years in prison.
According to court documents, the defendant attracted investors into commercial and residential land development projects on a pledge that they would have first lien rights to protect their investments. But he failed to make good on that pledge. In some cases, he admits he even sold notes to investors for properties that were already encumbered by liens.
He admitted that as recently as 2009, when his own financial situation was collapsing, he was still soliciting funds from investors and misrepresenting how the money was being used.
Source: Times of San Diego, "Escondido Broker Pleads Guilty to Defrauding 50 Victims of $50 Million," Jennifer Vigil, May 8, 2014