The Next Wave of Failures?

[Elliott]

Not a good idea to trust anyone in real estate these days.....
if you thought 1031-Exchanges were 'safe',

http://online.wsj.com/article/SB121737890403495415.html?mod=googlenews_wsj

Vesta Strategies LLC of San Jose, Calif....now defunct.

"To avoid paying capital-gains taxes in these real-estate deals, investors need to buy a new property such as an apartment building or strip mall within 180 days of selling their old property, and in the interim they need to keep their cash with a "qualified intermediary." Vesta was one of hundreds of companies that played that role.

Californian Christina Pappas was seeking to carry out a 1031 exchange when, on the advice of her escrow company, she handed over $2.5 million to Vesta in April from the sale of a property. She soon found another building to purchase within the IRS-mandated 180-day time frame. But a Vesta representative failed to wire her money to complete the property exchange by the June 16 closing, and still hasn't done so, she says.

The 57-year-old Ms. Pappas filed suit against Vesta last month, but she fears she won't recoup the money, which accounted for much of her retirement savings. "If I would have known any of this, I would have paid my taxes instead" of attempting a 1031 exchange, she says."

 

[Elliott]

And then there is this, also from WSJ,

Federal prosecutors suspect that a Wall Street broker who is the target of a criminal investigation into sales of mortgage-related securities has left the U.S. and could have fled to his native Bulgaria, according to people familiar with the case.
The move comes as prosecutors prepare to bring criminal charges in a high-profile probe into the activities of two former Credit Suisse brokers, the people say. Authorities have been investigating whether the brokers -- Eric Butler and Julian Tzolov, who is Bulgarian-born -- lied to investors about how they placed their money in so-called "auction rate" securities tied to subprime mortgages, the people say.

 

[Pamela Crowley (Florida)]

The list of who I trust is so small already.....

 

[timd354]

Not a good idea to trust anyone in real estate these days.....
if you thought 1031-Exchanges were 'safe',

http://online.wsj.com/article/SB121737890403495415.html?mod=googlenews_wsj

Vesta Strategies LLC of San Jose, Calif....now defunct.

"To avoid paying capital-gains taxes in these real-estate deals, investors need to buy a new property such as an apartment building or strip mall within 180 days of selling their old property, and in the interim they need to keep their cash with a "qualified intermediary." Vesta was one of hundreds of companies that played that role.


Californian Christina Pappas was seeking to carry out a 1031 exchange when, on the advice of her escrow company, she handed over $2.5 million to Vesta in April from the sale of a property. She soon found another building to purchase within the IRS-mandated 180-day time frame. But a Vesta representative failed to wire her money to complete the property exchange by the June 16 closing, and still hasn't done so, she says.

The 57-year-old Ms. Pappas filed suit against Vesta last month, but she fears she won't recoup the money, which accounted for much of her retirement savings. "If I would have known any of this, I would have paid my taxes instead" of attempting a 1031 exchange, she says."

It looks like she should also being suing the escrow company.