Multiple scams have been identified recently that have already cost people tens of thousands of dollars of their retirement savings. The scams, which seem to be copycats of each other, involve approaching people who own Mexican timeshare real estate by phone calls, mail or by email, and pretending to have ready buyers. The catch is that the prospective sellers are told they need to prepay some phony closing costs and other fees into a phony escrow account in the US, to be reimbursed at closing, which, of course, never occurs. This occurs after they are sent a signed sales contract using the words “Guarantee” or “Guaranteed” to trick the seller into thinking that it is a sure thing.
The companies look almost legitimate on the internet—but not quite. They have clearly gone to some effort to build websites that look professional and have multiple references elsewhere. But the websites didn’t exist before last year. Their web sites show up on the internet as well as their company name but that only happens because they paid people to put their fake company name in directory listings on 50 internet sites in order to make their name come up in searches and give them legitimacy. Also they list memberships in fake organizations on their web sites, groups that do not exist, they have even created scam law firms to later scam people a second time saying they can recover the lost funds for a fee of over $1,000 dollars! These scam attorneys web sites even have fake testimonials.
They include phone numbers, but none of them are answered by real people unless their caller ID identifies them as one of the people being scammed. The phone numbers are VOIP numbers in the US or cell phones in Mexico City.
When questioned about the charges they provide an opinion letter from a supposed international CPA (Certified Public Accountant) for the US, Canada, and Mexico, but no such people actually exist. Their addresses, when searched on the internet, are phony, too, showing up as address “examples” in other contexts. They don’t give their phone numbers or their cédula numbers (official licenses), which could be verified on the internet. The phony letter also has a fake address and lists no phone number.
The documents look almost legitimate, too—but not quite. They use the real SAT (Mexican tax office) forms or outdated ones, but place false information and false payment codes and fee descriptions that do not exist or are grossly inflated by over 1,000%. They use such nonsense titles and terms as “Guaranteed Purchase/Sale/Escrow Contract.” No such thing exists. And the list of expenses to be paid is filled with phony codes and line items, too, like IVA taxes, which are never part of timeshare transactions. And Foreign Investor Registration fees, which should never be expressed as a percentage of the selling price. Here are some line items that are phony or grossly inflated:
• Maintenance Fee to date and Renovation Fee to date to be reimbursed at closing
• Closing and Administration Fees paid by Seller to be reimbursed at closing
• 11% Foreign Investor Registration paid by Seller to be reimbursed at closing
• 16% Value Added Tax (IVA) paid by Seller to be reimbursed at closing
• Removals of Liens to be paid by Seller to be reimbursed at closing
• Free and Clear Certificate to be paid by Seller to be reimbursed at closing
• 5% Commission from Buyer to be paid to Seller at closing
• Erasure of Records to be paid by Seller to be reimbursed at closing
• Termination of Fideicomiso to be paid by Seller to be reimbursed at closing
In addition, the Mexican buyers’ names and signatures don’t look right because there’s just a first name and a last name, which is not how Mexican’s legal names look (first name, middle name, father’s last name, and mother’s last maiden name).
And, the seller is never given a set of regulations governing the escrow account, detailing how and under what circumstances the funds will be disbursed. The seller is just told to send the money to a particular account. In a normal escrow transaction the escrow company is licensed, maintains a separate trust account and requires specific authorization in order to disburse funds from the trust account. The scammers have people send money directly to third parties and do not have licensing nor their own escrow trust account for managing or disbursing funds.
The only two escrow companies I have used for Mexican transactions have been Stuart Title and First American Title, both large companies with trust accounts and large staff in the US.
Scams involving the elderly are, of course, always despicable. In this case, the scams take advantage of expats’ likely confusion about how real estate transactions are handled internationally. And, they assume that elderly expats would probably jump at the chance to unload their timeshares for a profit in this shaky economy.
To avoid these kinds of scams, prospective sellers should:
• Always be wary when approached in an unsolicited manner by anyone claiming that a “guaranteed” buyer is waiting.
• Always be wary if they’re asked to pay any upfront closing costs whatsoever. Only buyers pay closing costs in Mexico as well as much of the world, sellers only pay capital gains tax and if that is paid, it is collected at the end from the payment made by the buyer and deducted from the seller’s proceeds. Don’t fall for being promised a reimbursement at closing.
• Always hire their own real estate lawyers to review real estate transactions. Never hire lawyers recommended by third parties as sellers need an independent advocate who is not partial and who can review the transaction and documents provided.
Also beware they will put you on a “sucker” list and then have fake attorneys call you afterwards to help you reclaim the stolen funds but these people too are confederates of the scammers and will only suck you in further and provide you with forged court documents saying you are entitled to part of a class action settlement or other judgment.
By SPENCER RICHARD Mc MULLEN CHAPALA LAW
SPENCER RICHARD McMULLEN – Lawyer & Company Owner
Cédula Federal 7928026 / Estatal #114067
Official Translations English / Spanish / English
Licenciado en Derecho (Law Degree) – Universidad America Latina
Especialidad en Derecho Procesal Civil y Mercantil (Specialty Postgraduate Degree) – Universidad Panamericana
Jalisco State Judicial Council Authorized Court Translator (Folio #641)
Federal Judicial Council Authorized Court Translator (D.O.F. 12/16/2016, Registro P.071-2017)
US Consulate / Municipality of Guadalajara Authorized Translator (Clave #003)
Federal Banking and Insurance Commission Arbitrator
Postgraduate diploma course in Condominium Administration
Postgraduate diploma course in Procedural Law
Postgraduate diploma course in Contractual Law
Postgraduate diploma course in Human Rights and Extraordinary Constitutional Writs
Postgraduate diploma course in Administrative Law
Postgraduate diploma course in Notarial Law
Postgraduate diploma course in Corporate Law
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Postgraduate diploma course in Probate Law
Certified Attorney ANADE Colegio de Abogados 2013, 2014, 2015, 2016, 2017, 2018
Various courses in civil, business, real estate and tax law
Expert Witness in US State and Federal Courts regarding Mexican Law and Real Estate
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Source: chapalalaw.com, for5atlanta
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