We all know times are tough for real estate agents and brokers out there, especially in the Southern California market. Unfortunately, a small number of professionals apparently feel compelled to try and make an easy dollar off unsuspecting clients. It never works out.
The most recent example is an Orange County broker who was arrested and charged last month with 34 felony counts for allegedly scamming elderly investors out of $300,000. John Wesley Martynec, of Long Beach, Calif., is accused of running the fake investment pool scheme.
According to a report from Realty Biz News:
Martynec had convinced his investors that the money they put into the scheme would be used to purchase foreclosed homes in and around Los Angeles County, before being renovated and then sold on for a handsome profit. He told victims that they would be able to see profits from the venture in just six months.
To make the scam more convincing, Martynec sent the investors regular email updates, including deeds to properties he had supposedly bought. He told victims that each time he sold a property, he was injecting those profits straight back in to buy even more foreclosed homes.
Martynec had only purchased one home throughout the entire time the scheme was running, a $292,000 property that actually ended up being foreclosed itself.
Although agents and brokers getting involved in schemes like this remain a tiny fraction of the overall California real estate industry, similar cases are on the rise in this down market. We urge the vast majority of above-board agents to continue to remain vigilant and report any signs of fraud to the authorities. Your profession and livelihood shouldn’t have to take a black eye for the illegal actions of a peer.
Please share your experiences with us. Have you seen or heard about similar cases of fraud in your market?