Mirage buildings

Deficient due diligence during the pandemic has allowed real estate investment schemes to proliferate amid a boom in property prices. Consulting fraud examiners and those who work for potential investors and financial institutions can help prevent these extravagant frauds.

The sophisticated promotional booklet described the “Friedrichshöhe,” in a town near Berlin, as a “former viewing tower with a restaurant” that opened in 1896. Its owners constructed additions in the ’30s and ’60s to resemble “fortresses of the middle ages.” At its zenith, “up to 50,000 visitors came to enjoy the view,” reported the brochure from the German Property Group (GPG) (formerly the Dolphin Trust), a real estate company based in Germany, that said it now owned the Friedrichshöhe. “Current planning suggest[s] an extensive redevelopment of all existing buildings,” GPG reported. “The monument will be extended by annexes that adapt to the historical design and used as modern apartments.” The prose was accompanied by stylish drawings of proposed renovations and new construction. This sounded lovely for those who could afford the rent. Unfortunately, it was too good to be true because it was an alleged fraud supported by a probable Ponzi scheme.