New Jersey real estate influencer and investor Cesar Humberto Pina, also known as “Flipping NJ” was recently charged with wire fraud, money laundering and other charges related to allegedly operating a Ponzi scheme in which he promised investors returns of 20% to 45% in five months for investing in his purported real estate flipping business. As anyone who watches HGTV knows, flipping houses involves buying houses, quickly updating them and then reselling them at a substantial profit. According to US Attorney Alina Habba, Pina used his social media influence and seminars throughout the country to promote the scam in which rather than use the money invested to purchase, renovate and resell the properties, he is accused of using the funds for his own personal purposes and paying earlier investors with money from later investors, the hallmark of a Ponzi scheme. According to US Attorney Habba, Pina stole millions from unwary investors.
TIPS
It is also important to remember that you should never invest in something that you do not completely understand. This was a mistake that many of Bernie Madoff’s victims made. You also may want to check out the SEC’s investor education website at www.investor.gov. Scammers can be very convincing and it may sound like there is a great opportunity for someone to make some money, but you must be careful that the person making money is not the scam artist taking yours. Additionally, investing with someone merely because you trust them because you have heard them on the radio, television or social media is a bad idea.
Be wary of seminars that offer get rich quick schemes that indicate that little effort or investment by you is required. Do your research with the FTC and your state’s attorney general to see if there have been complaints against any company that puts on such seminars. As always, if the promised returns appear too good to be true, they probably are. In this case, the promised returns should have been a red flag that this could be a scam.
As for flipping houses, here is a link to a Bankrate.com story about the pros and cons of house flipping.https://www.bankrate.com/real-estate/flipping-houses/
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