A North Carolina man, Hubolist Elliott, admitted in a federal court Feb. 23 to a real estate scam costing investors more than $1 million between 2009 and 2014, prosecutors have said.
Elliott, a 43-year-old resident of Cary, offered vacation properties in Florida through the company Travel World Vacations Inc.
But sometimes the properties in question were owned by neither Elliott nor his company, or simply didn’t exist at all.
Most of the transactions, which were conducted with at least 10 people from all over the country, involved fractional ownership. (Fractional ownership is a concept similar to timeshares, with which most laypeople are probably more familiar; in fractional ownership, investors purchase part of the title to a property, as opposed to units of time.)
Elliott has pleaded guilty to one felony count of mail fraud, for which he faces up to 20 years in a federal prison; he may also be fined up to $250,000, according to U.S. Attorney Richard Callahan. His sentencing will be held May 29.
Prosecutors first announced the indictment Jan. 6; the indictment was technically handed down Dec. 10, 2014, but it remained sealed until Elliott was arrested in his home state Dec. 29.
The Prevalence of Real Estate Fraud
Real estate fraud is unfortunately common, with news on other schemes breaking in New York, Chicago, San Antonio and the Los Angeles area in the same week as Elliott’s plea hearing alone.
New York Attorney General Eric Schneiderman announced Feb. 27 that he had been able to recover a portion of the cash swindled from nearly 90 New York residents in an international condo scam.
But all too often, victims are left with little to no recourse. So while one can hope fraudsters will be caught and justice enacted, it’s often up to would-be investors to educate themselves on the perils of real estate schemes.
“Every state has a Real Estate Commission charged with licensure and policing of the states’ duly licensed real estate agents and real estate firms,” says Morgan Mason, Outer Banks Real Estate Company. “It also has records of infractions, suspensions and revocations of agents’ licenses. Before dealing with any “real estate agent” unknown to you, please make a phone call. That deal that sounds too good to be true may be just that. If you are faced with an “investment” adviser who is not a licensed agent, make inquiries at the Secretary of State’s office about the company and its shareholders or owners. A few well placed phone calls could save you millions.”