Sixteen people have been charged for operating a fraudulent telemarketing scheme that involved losses of over $20 million to more 290 victims in 46 states and Canada, including Michigan, announced United States Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office.
According to the first superseding indictment, the telemarketers operated from call centers in Florida and New York. The telemarketers made unsolicited calls to individuals across the country offering to sell homes in Detroit. The telemarketers lied about the values of the homes, and told investors that they were purchasing bank-owned homes that previously had mortgages worth many times more than the current sales price. In reality, the homes were oftentimes acquired for no more than $500 before quickly being sold by the telemarketers to victims for between $7,500 and $15,000. After an investor agreed to purchase one home, the telemarketers caused the investor to believe that it was quickly resold to a hedge fund or foreign buyer for a substantial profit. In reality, the property was transferred to a shell company controlled by the telemarketers for no consideration and there were no profits. Based on these sham transactions, which caused investors to believe that there was an established process and market for flipping homes in Detroit, numerous investors purchased multiple additional homes from the telemarketers. After purchasing a substantial number of homes, the investors had difficulty contacting the telemarketers and eventually all communication ceased. The telemarketers utilized aliases and frequently changed the name of their company to avoid disgruntled investors and law enforcement.
