Buyers Beware: Real Estate Fraud

Written Contribution by Jonathan Kim

California is already a tough market for homebuyers, yet fraudulent real estate schemes are making the market even tougher. Some prospective homebuyers across California are finding themselves as victims of predatory fraud schemes. These schemes prey on desperate and panicked homebuyers who are feeling the squeeze of low real estate inventory. Although these schemes may go unanswered for several years, law enforcement and real estate agencies are slowly catching up to expose the tricks and practices that these schemes employ.

Earlier this month, Adolfo Schoneke pleaded guilty to conspiracy to commit wire fraud. He, along with his cohorts, would operate fake real estate and escrow companies across the South Bay. Under the guise of such companies like, “MCR and West Coast Realty Services,” Schoneke would trick homeowners into allowing him to use their property for open house tours while promising that he would compensate them in some way. He would then list these properties on the Multiple Listing Service website (MLS) at a competitive price to attract as many buyers as possible. Once his victims took the bait, he would accept all of their offers at once, taking their initial deposits and then disappearing with their money.  

Schoneke’s scheme was advanced and had utilized several tactics to make his business appear legitimate and hard for law enforcement to track down. For instance, Schoneke would force his victims to set up bank accounts in their names to collect deposits and other payments; thus, throwing off law enforcement and preventing them from tracing the money back to Schoneke. He and his cohorts gave their victims fake updates on their transactions and presented bogus excuses as to why their closings were being delayed. By doing this, Schoneke was able to maintain his scheme with some of his victims for years. 

Schoneke will face a mandatory maximum sentence in federal prison, and his cohorts are soon to follow. However, this does not compensate for the lost time and money spent by his victims. 

Anyone can easily fall victim to a fraudulent scheme. It is important to recognize how these schemes function and operate. Fortunately, Kendall Law’s inhouse licensed real estate agent and law clerk, Maria Irene Guerrero, has experience in dealing with these real estate fraud schemes. With more than 10 years of real estate experience, Ms. Guerrero offers the following advice to protect you against real estate fraud schemes:

• Do not wire your money if you have not gone to the escrow office that you are going to be wiring it to. 
• Have your bank double check the credibility of the people you are wiring money to. 
• Make sure to research both your real estate agent and your broker’s credentials; ensure that they are properly licensed by the California Department of Real Estate. 

Fighting against fraud can be an uphill battle. The attorneys at Kendall Law are well-versed in fighting against fraud and can represent you in these stressful legal battles. If you are a victim of any real estate fraud scheme, contact Kendall Law today or call (310) 619-4941 to schedule your next consultation.