Real estate can be a good way to increase your personal wealth. However, some property investments aren’t as good as advertised.
That was the very costly lesson learned by individuals persuaded by a popular social media financial influencer to let him use their money in what they were told was a property flipping venture that would net them returns of 30 percent or more.
Instead, federal investigators and prosecutors alleged it was all a real estate Ponzi scheme concocted by Tyler Bossetti. As the scheme unraveled, investors ended up defrauded out of more than $11 million.
Today, it formally ended in a federal courtroom where the 31-year-old Columbus, Ohio, man pleaded guilty to wire fraud and aiding in false tax filing. Bossetti faces up to 23 years in prison. His sentencing will be set at a later date.
Bossetti also is facing a dozen civil suits in connection with the scheme, in which he took more than $23 million from investors.
Investor funds for personal finances: Court documents and charges filed against Bossetti in late April alleged that he misused investor funds to finance his own expensive lifestyle.
The U.S. Attorney's Office said Bossetti admitted to misappropriating investor money to pay his rent on a downtown Columbus condo, cover frequent travel expenses, purchase a $150,000 Mercedes SUV, and invest in cryptocurrency.
However, his investors didn’t know that’s where their money was going. Federal officials said that between 2019 and 2023, Bossetti solicited short-term real estate investments for the purchase, rehabbing, refinancing, and renting or selling of residential properties.
Prosecutors said he used social media — he hosted the All for Nothing podcast, operated a Substack site (with an article on tax-free money posted June 8), and an Instagram account (now private) with almost a million followers — and third-party companies to solicit the investments, which he said would provide substantial returns to investors.
As part of the scheme, federal officials alleged that Bossetti issued promissory notes that “falsely claimed investments were risk-free and secured by real estate” that he owned. He also filed 14 false and fraudulent 1099-INT tax forms, according to prosecutors.
Technology ramps up classic fraud scheme: David P. Meyer, founder and managing principal of the Meyer Wilson law firm, whose main office is in Columbus, provides a comprehensive overview of the Bosetti case.
Meyer notes that while this case feels modern thanks to the use of social media and cryptocurrency, the underlying pattern use by Bosetti resembles many classic fraud schemes. They include —
- Promises of unusually high and consistent returns.
- A charismatic figure who claims to have special investment insight.
- Lack of transparency about how funds are actually used.
- Payments to old investors using money from new ones.
What does set the Bossetti case apart, says Meyer, is how it may reflect a growing trend of “financial fraudsters using online platforms to build trust at scale, reaching thousands — or even millions — of potential victims without regulatory oversight.”
Tax Felon Friday: The Bossetti case and Myer’s points about how the internet can expand the pool of fraudsters’ victims is a good reminder that many (most, all?) get-rich-quick schemes often are limited to making their creators, not investors, wealthy.
So, be careful when presented with an investment or other financial opportunity. Due diligence is critical. And don’t be coerced into putting your hard-earned dollars into any arrangement that doesn’t feel right.
You can catch up on all sorts of tax miscreants and their ploys in the ol' blogs' special Tax Felon Friday page, which after an informal hiatus, is back.
And if you want more tax crime posts, notably those that were published long before I gave them a special end-of-week feature, you can peruse, what else, the tax crimes category. You'll find this post at the top of that collection right now, so just scroll down for more.
You also might find these items of interest:
- Bernie Madoff's tax legacy: Ponzi scheme loss deduction
- Crypto's latest trouble: global Ponzi scheme under IRS-CI+ investigation
- RI man gets 8-year prison term for decade-long Ponzi scheme and tax evasion
Advertisements
🌟 Search Amazon Tax Products 🌟
The text link above is an affiliate ad. If you click through and then buy a product, I receive a commission.
