Tenant In Common (“TIC”)/1031 Exchange and Real Estate Private Placement Losses

As reported by thesecuritiesfraudlawyers.com

The current economic recession has revealed a new wave of fraudulent and unlawful real estate investments and transactions that were designed to mislead investors and line the pockets of investment promoters.  Miller & Molive has independently and through Court appointment represented several hundreds of clients defrauded in Real Estate private placement investments  and real estate deals that were secretly abused by the investment sellers.  Amongst the more recent forms of misrepresented investments are “Tenants In Common” or “TIC” related scams.  TIC scams were predicated primarily on 1031 Exchanges and became available as a result of a 2002 tax code ruling.  The 2002 ruling opened doors for sharp real estate promoters to sell complex high commission TIC investments through retail securities broker channels.

A “TIC” (Tenant In Common) is a real estate investment in which two or more parties own a fractional interest in a select property.  TIC investments became popular in 2002 after the Internal Revenue Service ruled that investors could defer capital gains on real estate transactions involving the exchange of properties (i.e. 1031 Exchanges).  Many investors were mislead in TIC investments with respect to the quality of the real estate purchased, undisclosed financing arrangements, conflicts of interest, negative economic factors known to brokers that posed a significant risk of loss and misrepresentations and omissions concerning the backgrounds and track records of the promoters and managers.  Many of the investors were forced to makes a quick investment decision in reliance on their trusted financial advisors.  Some of these investments were sold by financial advisors nationally by firms such asINVEST Financial Corporation, LPL Financial, H & R Block Financial Advisors, Ameriprise Advisors, Signator Investors, Inc. (John Hancock Financial Network), Pacific West Securities, ProEquities, National Planning Corporation, OMNI Brokerage, Sagepoint Financial and Welton Street Advisors on behalf of sponsor/promoters such as Direct Invest, Wells Exchange, Argus/ARI, Passco, Sequoia, Evergreen, DBSI, TSG/Rob Hannah, Geyser Realty, Cole, Inland and others,  Aggressive and experienced investment counsel should be consulted to adequately address complex

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