Investing in real estate can be a risky measure. Typically, problems with this type of investment include obtaining low quality features and appliances, which often need to be replaced and can threaten your profits, or a building that may look fine on the surface but is actually in disrepair. However, both of these scenarios pale in comparison to discovering that your investment never even existed in the first place. Unfortunately, this fate recently befell several potential investors, who made the mistake of trusting a lawyer in eastern Maryland who was defrauding his clients.
In the last week of December, attorney Aaron Seltzer plead guilty to wire fraud connected to a real estate investment scheme. A practicing real estate attorney in Crofton, MD, Seltzer created fraudulent investment opportunities for clients and then diverted the funds to his own pockets. From January 2008 to an unspecified date in 2010, Seltzer is believed to have gained $768,242 from seven illegitimate transactions.
According to an investigation conducted by the U.S. Attorney’s Office for the District of Maryland, the Federal Bureau of Investigation and Immigration and Customs Enforcement’s Homeland Security section, Seltzer stole most of the funds during a single episode: Seltzer claimed to own a real estate company based in Anne Arundel County before reportedly offering a 45% share to an investor. The investor paid $92,000 for this percentage, which Seltzer kept for himself. He then secured loans from a group of investors assembled by a New York lawyer, backed by three commercial mortgages in Virginia. He provided the New York attorney with a fraudulent promissory note and other fabricated documents to close the loan, receiving $497,527 in total from the group.
A sentencing hearing has been scheduled for April 15, 2015. Currently, Seltzer is expected to repay the total amount of funds stolen and also faces up to 20 years in prison. He has also been barred from practicing law in the United States.