Rip-Off Alert | Scammer turns real estate flipping opportunity into financial disaster
LAS VEGAS (KSNV News3LV) —
After watching all of the home improvement shows, many are dreaming about flipping real estate. However, one flip was worse than a flop -- it was a financial disaster.
The pitch was strong: invest in the renovation of old apartments in Manhattan, then flip them. Investors were told they could double, even triple their money by investing with Abbe Edelman.
"We gave him a big chunk of money. To us, $15,000 is a big chunk of money," said one woman, who chose not to reveal her identity, also saying that she did her research.
First, the apartments he wanted to buy and sell were legitimately for sale online. Second, no complaints or suits against Edelman could be found.
"On paper, he looked great, but unfortunately, like so many times, it was a lot of lies," said U.S. Postal Inspector Greg Botti.
Postal inspectors say Edelman orchestrated a Ponzi scheme for 8-10 years.
"Only so many people can get brought in and there is never going to be enough money and it just collapses like a house of cards," said Botti.
More than $3 million was lost by 30 victims.
"Even when you do your due diligence, you have to follow your instincts because he knew what he was saying to us," said the woman, who not only lost her money but also told her mom about the opportunity. "She wrote me a $5,000 check, now that does affect my mother. I'm the one who told her about it, so ultimately I feel like I am the one that hurt her."
Postal inspectors say take the extra time and check everything when investing your money.
"You can always reach out to your State Bureau of Securities or Secretary of State and see if that person or the entities they control are registered," said Botti.
Abbe Edelman pleaded guilty to fraud charges and was sentenced to 11 years in prison. He was also ordered to pay almost $3 million in restitution.