Financial fraudsters do not only harm their direct victims. The entire economy falls victim when real estate and other financial fraud strikes.
For example, North Carolina home developer Christopher Deans pleaded guilty to a scheme where he paid other bidders at foreclosure auctions not to bid on properties, artificially lowering the price paid for the property and indirectly lowering the values of all homes in the neighborhood.
Imagine this circumstance. You are looking to sell your home, which your agent values at $250,000. Later that month a foreclosure sells down the block at $100,000. Not only does your $250,000 asking price look high, it might have the be slashed by over half. If you don’t have time to wait it out for other homes to sell in the area, you may be stuck with a $100,000+ loss.
Deans was far from alone in his auction fraud charges. Other financial fraudsters have been charged in high-profile cases in California, Maryland, and beyond. Deans is leaving this with a lot more than he bargained for. In addition to $1 million in fines, Deans is facing ten years in federal prison for his actions.
Deans case took place in the period following the Great Recession, where home prices were depressed around the country. Financial fraudsters like these hurt everyone. They are the worst offenders in rotten real estate, as everyone suffers from their actions.
Read more at the Wall Street Journal.