SAN JOSE, Calif. (CN) – Investors in San Jose were duped out of “tens of millions of dollars” by a real-estate Ponzi scheme in which investment companies overstated property values, resold the land at “grossly inflated prices” and pocketed the difference, investors claim in Federal Court.
The RICO lawsuit claims investment companies such as Vento Investments and Luxury Development Fund lured them into investing in real estate by promising fair-market prices and solid return rates.
Instead, the defendants allegedly conspired with developers, brokers and appraisers to buy the land at highly inflated or above-market rates for their personal profit. The so-called “facilitators” – including RDB Development, Keller Williams Realty and a pastor who encouraged his parishioners to invest with a colluding company owned by his children – received kickbacks for their participation in the scheme, the lawsuit claims.
Investors accuse the defendants of a litany of “culpable activities,” including intentionally inflating land appraisals, receiving kickbacks and requiring investors to pay unconscionable “developer fees.”
Plaintiffs demand actual and punitive damages, an accounting and an injunction. They are represented by Jeffrey Forster and Steven Levy.