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Massive Real Estate Investment Scam Taken Down

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Massive Real Estate Investment Scam Taken Down
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Federal district court order issued to shut down the largest overseas real estate investment scam the FTC has ever targeted.

The alleged scheme took in more than $100 million by marketing lots in what the defendants said would become a luxury development in Belize. The development was known by several names, including Sanctuary Belize, Sanctuary Bay, and The Reserve.

According to the FTC, the scam was established by Andris Pukke, a recidivist scammer currently living in California, and he perpetuated it even while serving a prison sentence for obstruction of justice.

The alleged scheme took in more than $100 million, marketing lots in what supposedly would become a luxury development in Central America known by several names, including Sanctuary Belize, Sanctuary Bay, and The Reserve. According to the FTC, the defendants duped consumers into buying Sanctuary Belize lots by falsely promising that the development would include luxury amenities and be completed soon, and that the value of the lots would rapidly appreciate.

In filing the complaint against Pukke and a range of other defendants, the FTC is seeking to permanently stop the scheme and obtain a court order requiring them to turn over hundreds of millions of dollars to compensate deceived U.S. investors.

“The defendants in this case operated a sophisticated international real estate investment scheme that cheated consumers out of millions of dollars of their hard-earned retirement savings,” said FTC Chairman Joe Simons. “The FTC is committed to stopping this outrageous behavior and compensating the hundreds of victims.”

The Sanctuary Belize Scheme

According to the FTC, the defendants operated a set of interrelated businesses (the Sanctuary Belize Enterprise or SBE) and ran commercials on Fox News and Bloomberg News advertising parcels of land that were part of a luxury development in Belize. They also advertised the property through infomercials. Consumers who expressed interest in buying property would receive a call from California-based telemarketers who identified themselves as “property consultants” or “investment consultants.”

These telemarketers allegedly made six false claims in their pitches to sell lots in the development, including that:

  • SBE uses a “no-debt” business model, which makes buying a lot in Sanctuary Belize less-risky than a real estate investment in which the developer must make payments to creditors like banks;
  • Every dollar SBE collects from lot sales goes back into the development;
  • This continual funding stream means that SBE will finish development quickly — within two to five years;
  • The development will include impressive amenities, such as a hospital staffed with American doctors, an emergency medical center near the downtown “Marina Village,” a championship-caliber golf course, an airstrip, and a new international airport with direct flights to the United States;
  • These amenities will ensure that property values will double or even triple in two to three years; and
  • It will be easy for buyers to resell their lots.

 
The FTC alleges that SBE representatives in Belize made the same deceptive claims when they met with prospective buyers visiting the property before purchasing lots.

The FTC also contends that relying on the defendants’ deceptive claims, consumers purchased lots that typically cost between $150,000 and $500,000 outright, or made large down payments followed by sizeable monthly payments, in addition to paying monthly homeowners association (HOA) fees. However, because the defendants’ claims are not true, consumers either have lost, or will lose, some or all of their investments.

According to the FTC, a no-debt model actually increases risk for purchasers, and the defendants used consumers’ payments to fund their own high-end lifestyles instead of investing the money in the development. The FTC contends that the development and the amenities will not be completed in the promised timeline, the value of the lots has not appreciated, and there is no resale market for the lots.

Based on these claims, the FTC charges the defendants with violating the FTC Act and the Telemarketing Sales Rule. In addition, the FTC charges Belize’s Atlantic International Bank with assisting and facilitating the Sanctuary Belize scam.

The complaint also names Angela Chittenden, Beach Bunny Holdings, LLC, The Estate of John Pukke (Andris Pukke’s late father), John Vipulis, and Deborah Connelly as relief defendants who received funds from SBE’s deceptive and illegal conduct.
 

Questions:

I purchased a lot. Do I need to opt-in, opt-out, support a plan, pay money to anyone, or take another action before a deadline?
No. The FTC and other parties or groups are proposing interim receivership management plans to the Court. The Court will determine how the receivership operates during the Sanctuary Belize litigation. At this time, you are not required to take any action, pay any money, or make any decision. (Added May 13, 2019)

If the FTC wins the case, will I get my money back?
The FTC always works to return as much money as possible to each person that is affected. In general, the amount the FTC can return depends on many facts, including whether the FTC wins the case, how much defendants are able to pay, how much the Court orders for refunds and how many people were affected.

How long will it take to get my money back?
If there is repayment, it will happen after the case ends.

How do I add my name to the case?
You don’t need to contact the FTC to file a claim or ask for repayment. The FTC will use the defendants’ business records to identify people who bought property. You may choose to help the FTC by sending copies of information and records you have through a secure electronic link.

I want to make sure I get any compensation that is distributed. What steps do I take?
You can use a secure electronic link to provide electronic copies of information and records you have about taking tours, making a down payment, or buying land in the Sanctuary Belize developments, but you don’t need to do that immediately.

I own a lot in Sanctuary Belize. Does the FTC’s case take my lot into receivership?
No. The Court appointed a temporary receiver to take control of the development’s assets related to the case. The Receiver has control of unsold lots and areas of the development that do not belong to individual people. Your lot is not part of the receivership.

I lost my lot because I stopped making payments. Could I still receive any compensation that the FTC distributes?
Yes.

I’m concerned someone else might have a claim to a lot I thought I owned. What should I do?
There probably is not anything you can or should do right now, but if you want to be certain, contact an attorney.

I own a lot in a different development in Belize that might be related to this case. Will the FTC’s case cover my lot?
The FTC knows about other developments in Belize that are associated with the defendants in this case, or related to Sanctuary Belize/The Reserve. The FTC is evaluating lot sales in these developments.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357).

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