Mark Blumenthal, 51, and Constantin Niphakis, 42, were arrested a month ago for real estate fraud. They would have lost more than 1.5 million dollars to a dozen victims, according to the Service de police de la Ville de Montréal (SPVM).
The victims “are owners seeking to sell their house quickly in exchange for cash,” said the SPVM in a statement released Friday. The business of the two suspects, called “I buy CA$H houses”, would have taken advantage of their vulnerability.
Blumenthal and Niphakis reportedly presented themselves as “investors who buy houses, renovate them and resell them for a profit”. They made the victims sign a sales contract in front of a lawyer chosen by the suspects, then gave them a percentage of the sale price. They explained to the victims that the rest of the sale price would be paid to them “after the renovations and the resale of the house, at the latest in one year”, details the press release.
However, at the same time, they took out a mortgage and then failed to meet the conditions. They were also not performing the scheduled work. “In the end, the house is seized by the company that granted the mortgage. Fraudsters leave the adventure with the mortgage money in their pocket, while the victims wait for a second payment that will never come,” notes the SPVM.
The suspects appeared Thursday at the Montreal courthouse and face “several counts of fraud”.
The police force invites anyone with information about their activities to call 911 or contact their neighborhood police station or Info-Crime Montréal by phone at 514 393-1133 or on the web.
Owners are also advised to be vigilant, to consult their loved ones and professionals they trust, to obtain title insurance, and to obtain information on the website of the Canadian Anti-Fraud Centre.