Feds shut down alleged $100M real estate fraud in Belize

The Federal Trade Commission said it is the largest international real estate investment scheme the agency has ever encountered

Nov.November 08, 2018 12:20 PM

Andris Pukke and the Sanctuary Belize development (Credit: Google Plus and Belize Real Estate Property for Sale)

The Federal Trade Commission and U.S. Attorneys in Maryland temporarily shut down an alleged $100 million real estate scam in Belize, the FTC announced Thursday.

The FTC said the scheme was the largest real estate fraud the agency has uncovered in its history.

The “Sanctuary Belize” development drew investors from across the United States to buy at least 1,000 lots in the Central American country, where they could build their dream retirement homes in a community developed with every conceivable luxury amenity, including an American-staffed hospital, “world-class” arena and an international airport. Investors were told their lots would double or triple in value in two or three years. Convicted felon Andris Pukke, an American who also used the aliases Marc Romeo and Andy Storm, placed ads on Fox News to attract retirees, according to the FTC.

James A. Kohm, Associate Director, Division of Enforcement at FTC

But only about 10 percent of the lots bought by investors over more than 15 years were ever developed. During those years Pukke was even indicted and served prison time in connection with a separate get-out-of-debt scheme. The FTC alleges Pukke continued to direct the Belize fraud from jail, despite assurances from his cohorts to investors that Pukke was no longer involved.

“Instead of getting their dream home buyers found themselves in a nightmare,” said James Kohm, the assistant director of FTC’s enforcement division, who called Pukke a “hardcore recidivist scammer.”

(Promotional video for Sanctuary Belize)

Prosecutors believe the Sanctuary Belize developers are about half a billion dollars short of the capital they would have needed to complete the development. They regularly pitched a “no debt” financing model to potential buyers, which ultimately meant the project was low on liquidity, especially since Pukke is alleged to have siphoned off money from his investors to pay off a loan connected to his bail and finance a personal home in California. The government says Pukke lives in Newport Beach, California.

In addition to Pukke, more than 25 other people and entities are named in the new civil complaint, including Sanctuary Belize principal Luke Chadwick and Atlantic International Bank, a Belize-based institution, which the FTC said is the first foreign bank it has ever brought an action against.

The FTC created an undercover sting operation, it said Thursday, forming a fake exercise and fitness company that it used to get information from those directly involved in the scheme.

Pukke could not be reached by phone.

In a 2017 exposé, the Wall Street Journal chronicled the Belize investors’ struggles with Pukke and his childhood friend and business partner, Peter Baker, who was also named in Thursday’s complaint. In 2016, nine investors sued the developers for not building the promised amenities and for allegedly failing to make financial disclosures. The developers countersued for libel—and won.

Pukke’s criminal history began with pleading guilty to felony mail fraud charges in 1996. A decade later the FTC ordered him to pay $172 million judgement stemming from a deceptive practices lawsuit against his AmeriDebt and DebtWorks businesses. Pukke settled and paid $35 million. FTC attempted to recover Pukke’s holdings in Belize at the time, and held Baker in contempt of court for helping Pukke evade that recovery.

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