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The Federal Trade Commission announced a law-enforcement action on Thursday against a residential resort development in Belize, calling it “the largest-ever overseas real-estate investment scam” the agency has ever targeted.
At a news conference in Washington, the agency said the development, known by names that include Sanctuary Belize, Sanctuary Bay and the Reserve, bilked about 1,000 investors, mostly Americans, out of over $100 million.
A partially built restaurant, seen in 2017.
Photo:
Tony Rath for The Wall Street Journal
The complaint, filed against 24 individuals and companies with numerous aliases and doing-business-as names, alleges these entities falsely claimed to be building a luxurious resort community that would feature a hospital, hotels, golf course, spa, casino, and high-end boutiques, among other amenities.
The agency contends that investors were duped into believing that lots, which sold for between $150,000 and $500,000 each, would increase in value and were a low-risk investment. Instead of investing proceeds into completing the development, “the defendants used consumers’ payments to fund their own high-end lifestyles,” the FTC alleges. The development is not close to being finished and is unlikely to ever be finished, the FTC alleges.
The Wall Street Journal first reported on delays and an investor lawsuit in an article last year.
Through a court order, the FTC has frozen the assets of the defendants and will seek to recoup money lost in the alleged scheme on behalf of investors. James Kohm, associate director of the agency’s enforcement division, declined to say whether the case would be referred to law enforcement so that criminal charges can be pursued, but said that is the usual process in “cases of hardcore fraud.”
The marina
Photo:
Tony Rath for The Wall Street Journal
Defendants in the FTC’s complaint include Peter Baker, the project’s titular developer. Another defendant is Andris Pukke, who is named in three contempt motions the FTC has filed and is described in the complaint as controlling the project.
Mr. Baker and Mr. Pukke, both Americans, did not respond to requests for comment related to the FTC’s actions.
In interviews with the Journal last year, an attorney for Mr. Pukke said that he provided only occasional marketing consulting to the project and was not in charge of it. Mr. Baker told the Journal that the project was soon to be completed and that most investors were happy with the development and its progress.
Write to Katy McLaughlin at [email protected]
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