Property fraud is running rampant around the globe, with scammers growing increasingly savvy in their use of technology, e-commerce and social media to create fake business accounts, gain access to people’s information and hunt for investors.
In a major global scam uncovered by The Real Deal, more than 100 investors around the world fell prey to property fraud and lost their savings to a shell startup company called Bar Works.
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The co-working platform has locations in top markets around the world, including Manhattan, Brooklyn, Las Vegas, San Francisco, Miami and Istanbul. Though these spaces resembled normal offices with desks, chairs and other basic necessities that usually grace a work environment, it is suspected they were a front for alleged British fraudster Renwick Robert Haddow and his associates in an elaborate scheme using websites, emails and social media ads to poach investors and take their money.
Bar Works pitched hundreds of investors with the same line — the company was looking to expand its footprint and lease office space. Investors were offered a desk at one of the spaces and guaranteed a cut of the rent in addition to double-digit returns should they take the leap, TRD reports. In the charges brought against Haddow, prosecutors allege he took $36M from Bar Works investors — $16M of which was wired to foreign accounts. The alleged fraudster remains on the run and could face 40 years in prison.
Real estate fraud has become a go-to scam option, thanks in part to two key elements: digitization and that central banks’ bailing out economies around the world after 2008 has left more investors with capital on hand, TRD reports.
In June, President Donald Trump’s former campaign chair, Paul Manafort, and Manafort's son-in-law, Jeffrey Yohai, came under scrutiny for allegedly running a property fraud scheme on investors.
The two are being investigated by the Federal Bureau of Investigation for allegedly defrauding investors of millions of dollars in apartment and luxury housing transactions funded by the political consultant.
