Its easy to cover up accounting malfeasance in the real estate business when values are climbing. Its not so easy when they are declining.
Enter Shark #1: Rick Koerber of Franklin Squires
Rick is an interesting character. Here is his site.
Rick seems to have gotten tangled in his own web. He was indicted on federal charges this week. They include, according to the paper, taking over $100 million in investor money and then using $50 million of that money to pay "interest" to those who invested first. Whoops!
Lets see what happens to Rick. Most sheisters aren't as vocal or as open as Rick seems to be. His business machine seems complex enough that he may have lost control of it and is now is being held responsible for that loss of control. I will keep an eye on this case. The devil is in the details.
Enter Shark #2: Jonathan Reyes of Real Estate Investment Network and Hard Money Vault
Jonathan is another interesting, and perhaps more sinister, character. He has a reputation going back to 1999 that is very colorful. I won't go into details here though. This time, according to the paper, it appears he used investor money for personal expenses and failed to repay other investors. Let me say that if Jonathan is guilty, it will be a good thing for him to be taken out of the marketplace. Unlike, Rick Koerber above, Jonathan and his attorney have declined to comment.
Today's lesson is BUYER BEWARE!
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