Real Estate fraud is becoming a major problem in Costa Rica
Yesterday I had a meeting with an account who was involved in a huge development project on the Pacific Coast of Costa Rica. Anyway, to make a long story short, he asked me if I knew the guy who he had meant in Costa Rica. I shook my head, and my account proceeds to go to this guy’s website. The website was professionally done, looked legit etc etc.
Then my account took me to a another website where it showed this guy had twice been indicted on fraudulently securities in the US, and he was NOW selling real estate investment securities on his Costa Rica website.
When my account asked me if there was anything I could do about it? I responded, "Not Really!"
It is well-known that Costa Rica has attracted an increasing numbers of investors and people who want to retire and/or buy a vacation home/condo over the last few years. However, this has also sparked the increase in real estate and investment scams. It is said, that as many as 30% of all real estate deals may have some type of fraudulent dealings with them.
Most who do get scammed end up leaving with a very bad taste of Costa Rica. Or they think US legal system, hire an attorney, thinking of civil lawsuit and, get their money back. The next thing they know, its two years and thousands of dollars later and are in the same boat they started with.
Before one thinks about investing and/or buying one must realize two critical fundamentals of buying real estate in Costa Rica:
- Costa Rica Law is a complexity of the Rican legal system, which is based on Napoleonic law. In other words, unless blood is drawn, “No (physical) Harm, No Foul. ” So fleecing someone out of money is not that big of a deal as it would be with someone who empties a 9mm clip into some poor soul. So if you get burned, do not expect an army of DAs and Law Enforcement to arrest the person. Going through the courts in a civil matter cost time and money.
- There are NO governing laws for real estate agents as the US has, where one has to take a test to become a realtor, agent or broker. In Costa Rica, anyone can become one and you do not have to be a resident or citizen. No permits, schooling or business license required. And because of this, agents are a dime a dozen and all they need is property, regardless of who owns it.
Getting back – you fell in love with the country, found the perfect spot to build or buy your dream home, now, how can I protect myself? Well believe it or not, there are some simple steps.
Property Itself: Make sure the property does not look abandoned or not taken care of. These properties would be "attractive" for fraud as the owners are not checking their property situation.
Residency Citizenship Cards can help give creditability to the person you are dealing with.
Residency Card: You found an agent who looks to be not a Costa Rican and want to put a proposal on that dream home, asked the agent for their residency and/or citizenship card. Both will tell you how long the person has been living in Costa Rica. You may even ask for their Passport. If they have no card that means every 90 days they have to leave the country and then come back in after 72 hours. A Residency Card will pretty much tell you that person is here to stay in CR. The longer the residency, the more creditably that person has. If the person balks at showing his or her card, time to walk out the door.
Internet Search: Go to Google and type in the persons and business name; see if any claims have come up on them.
Get a Real Estate Attorney: Costa Rica has some great attorneys that understand the system. The US Embassy in San Jose has a list of bilingual attorneys and you can go to our Costa Rica attorney directory. A good attorney will do the due diligence to make sure the property has a clean title with no liens attached. A property with a very long clean history means they have belonging to the same person for decades. Properties were the titles have changed many times in the last few years are ones that raise red flags.
Use Caution: If the property is located in zones with high appreciation values be careful. Real estate in high dollars areas like in the Central Valley areas of Escazú and Santa Ana, to North Pacific coastal areas (Guanacaste like Tamarindo) and to Mid Pacific Coast, like Jaco are the perfect places for a conman to hype their victim on, how much money they can make on this "awesome" condo project that will start construction two years from now.
When all said and done, if you take your time, don't rush things, do your homework, you will be able to have your dream home and/or make money on your real estate investment.
For more info see: Investing in Costa Rica, Costa Rica Squatters, Buying Property in Costa Rica
EDITORS NOTE: The below "ongoing" comments that started in April, 2010, are mostly associated with the controversy of Hacienda Matapalo development project, which is located near Matapalo Beach between Puerto Quepos and Dominical.
i file a complaint with FBI Miami David Matluck and HM also states Attorney office nothing will be done without hundreds of complaints
action is best not words. i Filed a complaint under David Matluck/HM nothing will get done unless all people who were ripped off will file. FBI Miami and FL state attorney office
Chatter does nothing. Act on your waords. I called and filed complaints under David Matlock and HM. with FBI Miami and FL state attorney nothing will get done unless all investors complain
more useless comments and old news from Gabriel: certainly either Bernstein himself (a true criminal) or one of his associates…..stay tuned!
Did you guys see the $1.3 million condo Matluck sold before he flew the coop. It was right on the ocean. Imagine the money millions they allegedly got away with. Meanwhile $14 million in investor money is where? Does anyone have an answer? Were any laws broken or is this how business is done these days? So many questions and so few of you capable of providing the true grit.
Dr. Elizabeth,
not disagreeing with you about your feelings on how Dave handled this and the mess it has caused…trust me, don't blame you a bit for your words, but hold final judgement for just a bit longer…and as a said, I am not Matluck!!
Rob,
I think you and I are on the same page. I have been in touch with Starkey regularly…keep in touch.
Regards,
XX
I get the feeling no matter what a person with the name "Michael Starkey" told me it wouldn't give me confidence that this project is getting done. Just read that BK filing. UGLY …
xx, you would think twitter is more informative. Of course you would it is your cousin Ed who writes the nonsense you are feeding investors. Unfortunetly this is a small forum. Every investor should know HM lost the property to UTA Capital who has no obligation to HM investors only his investors who's three million dollars were lent to HM for infrastructure. (that by the way is not complete) They borrowed three million dollars. How come? They took in 21 million dollars from investors. Tico's make $2.00 an hour. http://www.welovecostarica.com has a second article not released yet. More devastating then the first. Soon it will come out. Matluck urged him not to put it out because shortly there would be a different article to write that is positive. That was a month ago. No positive news as of yet. Not all the papers were included in the Motion to Dismiss. There were financials in the documents. The partners took a lot of compensation in a three or four month period of time just prior to the demise with Island Resorts. They took in a lot of money during that period of time as well. Wake up investors.
If a project could be built with a keyboard (all you guys typing away at each other), HM would be like the Las Vegas strip by now. Fact is, there is nothing going on with the property.
@Dr Elizabeth. I hope they go to jail. Don't lose faith in a Costa Rica lifestyle and don't give up in getting retribution.
@XX. Once again you evade the substance of the counterpoint to your blind argument in favor of minutia. I would have not measured you as Matluck no offense intended to Dr E. I know Dave. Arrogant stoner Albury maybe, but not Matluck. He's too busy trying to find a way not to get thrown out of his Hermitage condo. I would bid on it but I know I would have to gut the place to get his stink out. Thanks again for your non post.
Wouldn't know for sure but if you are Albury, dude you are going to be popular in jail. Just sayin. Regardless I don't know or care who you are, but I do know what you are.
@Rob. I would not place any creedence in Starkey's opinion. He is the engineer of some of the worst sales gimmicks HM ever produced and I can back it up. He was the big proponent of milking 401Ks. The list of Hacienda Matapalo impropriety is very lengthy. Read the Motion to Dismiss. These idiots signed off on formally evading their primary and secured public company backed creditor in favor of a twice bankrupt con man that siphoned off $125K from HM only to produce NOTHING. They have no credible CFO. No real development experience. They have defaulted in NUMEROUS breaches of contract. They have taken 14 million dollars in deposits including PPM funds that appear to have been comingled with HM operating capital and spent every damn dime. They couldn't finance a Happy Meal if you held the fries. Wake up.
Hey Guys (Gabriel, Dr., Isus)…I missed you all. ???Really, you think I'm Matluck ???…not even close…don't look like him, don't write like him..(he's much more creative and literate then me. ( as Gabe pointed out…oh, and Gabe…thanks for the English lesson)…you'll have to fill me in on twitter..never used it before…is it more informative than this blog???…I would think so.
Try calling Michael Starkey on 954-548-3000 for info on HM. See if you can get any updates and keep us posted. Thanks
If you guys notice, on their twitter feed, it looks like they have given up on HM and are now focusing on new ways to make money in real estate. The entire look and feel of this project has turned a dark shade of gloom. Has anyone been able to get in touch with a live body at their office? We have yet to hear the reporting of a true conversation with one of the HM principles. On one hand they say their is going to be huge news coming and on the other hand that BK report shows a company in turmoil with nowhere to turn aside from the exits. And xx (aka DM) we don't need an answer on this one from you.
I guess that Bankruptcy filing says it all. Game over for the original "team". Or maybe better put, the original "den". The "landowners" better pray that UTA will work with them. Otherwise, it looks like they will have nothing but feathers in their hands.
XX you are so funny! You say "I have no motive to either applaud or denounce HM" and then refute yourself in the same paragraph "What I can tell you is that I do have a vested interest in seeing HM succeed, I do have direct and frequent contact with HM on a frequent basis…". So you frequently frequent too? Hilarious! Too bad; the investors aren't laughing.
Newflash: The investors are already demoralized by HM's fiscal irresponsbility, lack of specific performance and especially the failed attempt to block their creditors in bankruptcy court. B is right this is over.
http://www.welovecostarica.com/members/UTA%20Motion%20to%20Dismiss%201-12-12.pdf
Thanks to Scott Oliver. Future investors…mind your knickers.
Isus I agree with you. You are correct in saying that xx is David M.
Imagine that, the (CEO) Chief Embezzeling Officer of HM while running out of town and stealing 20 million dollars from all us buyers and investors, has the audacity to respond with his typical arrogance. How dare you xx. You are a lifelong thief and a professional con man. Regardless who you continue to fool, there are way too many scorned and devastated people that you and your partners have swindled to allow you all to get away with this. Our legal system, our News Medias and our Federal Agencies will deflate your arrogant attitude once and for all and they will not forget about your 5 business partners in the US and CR. I believe in Karma and God will provide justice for your horrible, horrible actions.
Is David M. himself posting as xx ???
Gabriel, I have to say, you sure are a persistant little criter
you simply cannot help yourself…can you? You have nothing meaningful to share accept to regurgitate quotes and time lines that are easily found on the HM website and news letters…it's old news and bears no meaning on what will soon transpire with the project. While some of your facts might be correct, they bear no significance on the future success or failure of HM. Furthermore, the more you post, the more you marginalize your own opinions… but you just can't help yourself….You protest that my statements have no truth? Well…that's interesting because my statements reveal few facts and I've kept it that way purposely. You are confusing facts with opinion…not me! Unlike you, I have no motive to either applaud or denounce HM…you and a few others, however, have clearly set up camp here looking for a audience to whom you can unload your opinions and interpretations of timelines and events in the most unprofessional and irrational manner. You and your little circle of aquaintances (or partners) must have noticed by now that the audience on this blog is quite slim. I randomly stumbled upon it myself by accident and have been disappointed in the unprofessional and berating manner in which some individuals have conducted themselves…perhaps you have made a few points that are worth filing away…the majority has been garbage in and garbage out. I will not pretend that I know what the future Holds for the investors of HM, and the project at large. What I can tell you is that I do have a vested interest in seeing HM succeed, I do have direct and frequent contact with HM on a frequent basis and I will reserve further comments for a more appropriate time. In the meantime, I hope you and the few others who are unable to resist temptations to try to demoralize the investors of HM and feed your own egos continue to find comfort and pleasure in talking in circles among yourselves. As you must have realized by now, not many people are listening. Fairwell for now. Respectfully, Peter, XX, Diane, and others in your fan club
I argree with you xx. They must have got burned before and taking it out with every project being built in Costa Rica. Why would HM invest so much on the infrastructure and then go broke. Why not take everyone's money before wasting millions. The project will get done. It just takes time. Cya
On the contrary XX. Why would any reasonable person place their faith and take their stand as you do without acknowledging the facts unless you stood to gain or avoid loss. Yet this is what you claim to do as "a bystander"? Really?
That's 100% weapons grade balonium.
You're the self anointed judge of this thread, accusing me and others of being involved with one of HM's poorly thought out and unsavory relationships. My history on this thread goes back YEARS. I warned people about the smoke long ago.
I am not that smart. Most everything I have stated is easily found in the HM web site; it's their (dis)information not mine. It is you who have resorted to personal attacks and unfounded assumptions. My purpose is to bring to light the facts for anyone who hopefully benefits by them regardless of their relationship with HM. Your position has no justification or benefit other than for HM. My position is backed factually. Yours is not.
B seems to know more than I about the current state of HM than I do although it certainly makes sense. The key question is: "Is Hacienda Matapalo a scam?" My personal opinion is, not by any original design. A lot of people will disagree and when you look at the sheer ineptitude, lack of experience and disclosure and subsequent epic irresponsibility, it shocks me that a bystander such as yourself could not see to the slightest extent how it could perceived as one.
Unless of course you have some self serving reason behind your position.
I am still so intrigued about the back and forth on this blog between B. and Gabriel and M.S…you guys (or girls) seem so interested in the downfall of HM and the investors…and yet your interest is so self serving??
Gabriel, you are very informed. Unfortunetly this little blog is not informing everyone that needs to know they lost their investment. The Commercial Center is a whole other issue and it violates Security and Exchange Commission Regulations. Matluck who can't shut his mouth has nothing to say. He does not return the calls of the investors. HM records may be destroyed but in todays world there is always a trace.
Contact the FBI.
There is no happy ending. There are no vertical permits for the property. All of condo owners are dead if what B says is true about UTA. The Phase I lot holders have a chance at some redemption and that would totally be in the hands of UTA under the same premise. Anyone who bought in Phase II is very highly probably cooked.
Matluck and rest can move wherever they like, except Costa Rica of course. I would assume they are persona non grata there. A large number of buyers were certainly outside FL and even the US which brings up a host of federal concerns. Especially with the commercial center sold as a PPM. If the property is lost to UTA it would not be surprising to me to know that the HM records are already destroyed. They are broke. Where did the funds from the PPM go? The land was supposedly to be leased from the HM parcel yet there are no titles. Is this not securities fraud?
This was a classic case of bubble market carryover from some of the most prolific bubble market proponents. Forced appreciation. An overabundance of forward looking statements peddled as truth. Classic fiduciary irresponsibility. In my opinion, these guys deserve jail time. My money though says they won't get it.
Strictly my opinion – If the option holders are not enraged, please take whatever you have left and donate it. Your lack of action makes you complicit to the crimes committed on those you were ready to call your neighbor.
Gabriel. Thank you so much for the history lesson. I feel much more informed.
M.S the expression is a long walk off a short pier. If in fact you are correct then all the naysayers will say hurray! In the mean time stay quiet unless you have some facts to share.
Peter are you an investor? I didn't see any Peter on the list. Gabriel knows what he is talking about and is 100% correct. You are all sitting back wanting to believe but right now there is nothing to believe in. At least not with the former partners. It is up to UTA Capital to decide what will happen. Maybe he will develop it, maybe he will sell it off for another to develop. UTA owns the property regardless of what anyone is telling you. What they are doing is……………..trying to save their a_ _es. They blew through millions of your dollars and have nothing to show. Not even the land. Matluck moved out of state, Sklar's moving, Albury left long ago, Blackburn left, Nathan came back last year. No employees. Makes you wonder what is going on. Keep waiting that is what they are counting on. You waited this long. http://www.miami@ic.fbi.gov
Gabrial: How dare you question the integrity of HM management !!!
Ok Peter Q XX Harvey or whatever your name is. You want to call me a liar? OK! You asked for it.
I made three factual statements in my last post.
One – "They were selling "Phase II" property knowing full well that "Phase I" was not permitted or financed.
Dec 2011 Press Release PR Web. First Reporting of receipt of D1 and D2 Permits
Quote from Brian Albury “Now that the ground can support the weight of heavy equipment and our Environmental Sustainability Index (ESI) has been approved by the government, we can proceed as planned.”
This is the first announcement of the ESI approval. No permits can be issued prior to ESI approval.
November 2009 Newsletter – Lead Headline written by David Matluck.“November is the time that our members of the Hacienda Matapalo Community can decide if they want to trade up to Phase II with its higher altitude and increasingly more dramatic views. This will be the last chance to take advantage of the special pricing we have offered to our community before they are presented to the public in December at higher introductory prices.”
March 24, 2011 Press Release “Hacienda Matapalo…has announced that it has closed on its first round of financing which will be utilized for infrastructure and utilities. The company…expects to begin single family home site closings within the next 60 to 90 days.”
Number of home sites closed = ZERO
Two – They touted a spec home almost a year ago that never got started.
June-July newsletter Lead Headline written by Michael Starkey and Edwin Acosta.
“As our infrastructure construction continues, we’re proud to announce that we have begun to build our first model home at Hacienda Matapalo.”
So where’s the house? Forget that. Where is a footer for the house? Forget that. They don’t exist. Why is this true? No progress photos or video in seven months. A permitted house in CR can be substantially built in seven months. They built NOTHING. If it walks like a duck
Three – They do not even have proper electricity to the property frontage.
Feb 23 2012 Update to Jan-Feb 2012newsletter written by David Matluck
“As construction resumes we expect to be working with ICE (the Costa Rican electric agency) to address Hacienda Matapalo’s electricity infrastructure needs. With the cooperation of ICE we anticipate that we will be able to expedite the delivery of electricity to many Phase I home sites, which will enable us to deliver title and deed to many Phase I home sites with full and complete utility hook-ups beginning this Spring.
Prima facie evidence from the kings of smoke. Homeowners protect yourselves.
Of course the project is moving forward. Things should be on their way to completion soon. You don't have to worry that your investment in HM will turn into something like this:
http://www.dr1.com/forums/real-estate/122928-ghost-trump-cap-cana.html
I have clear and credible information that the project is moving forward very soon…would I post it on this blog for Gabriel, M.S.,and all the other "Bernstein" look-a-likes to attack…heck no..not in a million years…homeowners, hang on, more to come. Gabriel's info, by the way, is "fiction" and not factual..just for the record….ask yourselves this: what is the motive of Gabriel, M.S., B..and all the nay-sayers..are they attorney's? homeowners? angry, jealous competitors? Bernstein Croanies?..notice how they never reveal themselves and their motives for their campaign against HM?
What a circus. HM began selling in 2007. Five years later they are now incapable of any forward movement and are missing prime selling and building season. I personally believe that the time will come when this project is remitted to the primary lien holder as much as they probably don't want it. Or an investor might come forward to take out the deal as distressed (certainly not for 40 million). From there the investors are probably taking a nasty haircut. Peter XX Q Harvey etc. present no more evidence of a turnaround as proponents of HM as the naysayers do on their position. It's all hearsay. Harvey uses "we" in context. What we are you referring to? And 40 million? Really? On a dismissed BK company run by bubble market realtors that flagrantly misrepresented their ability to deliver? They were selling "Phase II" property knowing full well that "Phase I" was not permitted or financed. That is a fact. They touted a spec home almost a year ago that never got started. That is a fact. They do not even have proper electricity to the property frontage. That is a fact. They need ICE to move lines by their own admission and have been trying to get that done for two years at least. Although I never bought the hype, I feel badly for the people who trusted too much. A complete shame. HM and its fawning syncophants need to produce the evidence, not the naysayers. It is HM who the burden of proof is upon now. In time all things will become apparent.
M.S.
thanks again for your useful and constructive comments….you"re like a little jealous child playing in your own little sandbox trying to justify your existence on this blog…no one really cares what you have to say…as for me, you entertain me and I kind of enjoy the back and forth…
Notice how the months keeps slipping by with little if any progress. Next thing you know it will be September … then 2013 … then 2015 … Like sands in an hour glass, so goes the 401K.
To M.S. and B.,
I've read through your useless commentaries you've posted for the past month. You both seem to go in a big circle with a perplexing agenda to berate and disqualify HM with no concrete evidence to back up any of your statements. The Homeowners of HM are being kept informed and I am quite surprised that more of them have not responded to your useless and inaccurate accusations. The 2 of you ought to go work for Paragon…I here they are waiting with open arms….ps-love and kisses and thanks for all your sound legal advice…I will run off to my Attorney immediately.
Scam is not what HM management was involved in. Rumor mill has it that we will have a big announcement on condo space in just a few days. Enjoy the sunshine in CR. You guys sure deserved it with your patience.
The scams are far more than 30%. Almost all Gringo owned homes for sale are also grossly over priced. With construction workers earning $2. per hour how can they justify such home prices. keyboard won't allow a question mark. Costa Rica has lost its appeal as a retirement destination for Canadians, mostly due to the real estate corruption and rediculous home prices.
File a complaint about what? The project being a little late in development. I kindly ask those reading to give the management team at HM just a little bit more time to come up with an investor to put up $40 million so the project can be completed. Give them time and you will be rewarded with a wonderful villa/condo experience. Look at the road system that was built for you. Your kids can ride their bikes and you can go for a stroll.
I received this article. Just change the names and you will find the similarities to HM. Most of HM original call center staff came from Paragon Properties, located in Hollywood, Florida. DO YOU KNOW WHY PARAGON'S PRINCIPLE PLAYERS WERE NOT PUT IN JAIL?BECAUSE NOT ENOUGH PEOPLE FILED CRIMINAL CHARGES AGAINST THEM FOR THE US ATTORNEY TO PROSECUTE. I URGE YOU NOT TO ALLOW THIS TO HAPPEN TO HM INVESTORS. I URGE YOU TO FILE CRIMINAL COMPLAINTS. IF YOU DON'T AND THERE HAS BEEN MISCONDUCT THEY WILL WALK AWAY. IF THEY HAVE DONE NOTHING WRONG BUT ARE VICTIMS OF A BAD ECONOMY….NO HARM, NO FOUL. FILE A COMPLAINT TODAY! STOP WAITING TIME IS NOT ON YOUR SIDE. http://www.miami@ic.fbi.gov cut and paste into your browser: http://www.palmbeachpost.com/money/lawsuit-claims-costa-rican-dream-home-sales-a-859387.html Lawsuit claims Costa Rican dream home sales a 'Ponzi-type' scheme Paragon Properties of Costa Rica's promises of tropical dream homes targeted about 900 customers near or at retirement age, according to a federal lawsuit. By Jon Burstein South Florida Sun Sentinel Updated: 3:44 p.m. Saturday, Aug. 14, 2010 Posted: 10:50 a.m. Saturday, Aug. 14, 2010
It's really nice to hear progress is being made and the villas and condos will soon be rising from the ground. It shows you how the management strength HM put into place early on was money wisely spent. Delays yes, but never a promise broken.
I finally got a whole of someone at HM and they are going to make announcement in early April about the project moving forward and other things that are happening. So hopefully all will eventually work out and HM will be built. Will just have to wait and see.
They are probably out of the office talking with banks and investors. Talking with high level muckity-mucks who will help put the project back on track. A little birdie tells me that a big announcement will be coming soon. An announcement that will change the course of Costa Rican land investment. The largest project in Southern Coast history led by the finest management team ever assembled.
Has anyone been in touch with Haceinda Matapalo lately for any updates? No updates on site and when I call it always go to voice-mail or receptionist always tells me no one is in the office at this time.
All this drama because a few people are impatient. A development of this size is going to take years not months to complete. Trust in the executives of Hacienda Matapalo to bring all of the investors through this experience whole. I might be placing a call today to see if they have any more open condo slots available.
I'm starting to think the project will be completed. The HM underground is filled with "chatter" that a major announcement is going to take place in the next 21 days. This could turn into a major celebration for condo/villa owners. There's a reason the owners are back updating on twitter. If they were in hiding, you wouldn't hear a thing. Rejoice at a second chance. A homecoming so to speak.
What has happened is a crime. Has anyone thought about criminal charges?
Isn't it remarkable how similar the writing styles of Xx and Q are? Same use of the … Same selective use of CAPS. Same use of multiple punctuations. (e.g. !!!!.) Same angst and contrariness in defense of HM. Hmm.
M.S has tempered her criticism. Newsflash. When you promise delivery of keys in 24 months with no evidence whatsoever of permits or finance or the imminent procurement of same, that either makes you very crooked or very inept. Either way it does not bode well for investors. It's lipstick on a pig.
M.S – you and I both know that you are right about the snakes. Except some of them are in Oakland Park.
We put a 5K deposit down on a condo at HM just about a year ago. After doing our due diligence and finding a nice condo at a distressed price in Playa Del Coco that we didn't have to wait for, we backed out within the allowed due diligence period. We did get our deposit back. I am glad we did, it just didn't quite pass the sniff test. I hope for the sake of the people that invested they can somehow bring this project through.
Pass the butter what? When you are dealing with people of integrity (HM management team), you give them the benefit of the doubt. I think they started out with the absolute best of intentions and then things started to sour. Is there no responsibility for the people who bought property with no infrastructure in place? Isn't that just a tad bit risky?
LOL… Please pass the butter.