Utah company ordered to pay back millions after alleged real estate scam
Feb 16, 2022, 6:43 PM | Updated: Dec 30, 2022, 11:21 am
(Photo: Getty Images)
(Photo: Getty Images)
SALT LAKE CITY — The Utah Department of Commerce and the FTC reach a massive settlement with a Utah business that reportedly scammed thousands of people across the country out of over $100 million in a real estate scam.
Real estate scam
Investigators say Zurixx LLC and its executives, Cristopher Cannon, James Carlson and Jeffrey Spangler had thousands of victims all across the U.S. They say the company would use telemarketers and high-pressure sales tactics to convince people to attend a “free” or low-cost seminar. At the seminar, they would learn more about flipping houses. However, company officials reportedly lied about how much money their victims would get in return.
Utah Department of Commerce Executive Director Margaret Wooley Busse said, “Almost none of them saw any kind of return.”
Busse also says the company would convince their victims to buy into a more expensive real estate seminar. Then another, and another and so on. They also would allegedly encourage investors to open new credit cards, promising the profits would cover their debts. She says the scammers even had celebrity endorsements from Tarek and Christina El Moussa from “Flip Or Flop” and Hilary Farr from “Love It Or List It” to make the seminars seem more credible.
“[They] use high-profile celebrities to endorse their work and say, ‘Hey, you can have a lifestyle like us if you just participate in this,’” Busse said.
(Utah Department of Commerce Executive Director Margaret Wooley Busse explains the details of the alleged scam. Photo: Paul Nelson)
Scams like this do tremendous harm to the economy, according to Busse. She says this hurts the confidence in other, legitimate investment opportunities. She also says fraudsters like this get help from other scammers.
Busse said, “They often operate off of lists that have been sold to them of people that have already been caught up in other schemes that are maybe more vulnerable or gullible. They already, kind of, know that these are a fresh target.”
Lawsuit settled
The company settled a lawsuit with the FTC and the UDCP to have them pay $12 million dollars. They say it is “pennies on the dollar” compared to the $111 million reportedly taken in the real estate scam. Officials say this case had been ongoing for a long time. By the time a settlement was reached, the vast majority of the money was already spent. However, Busse says this settlement sends a strong message to would-be fraudsters
She said, “This is, by far, the biggest settlement in our knowledge, in my knowledge, that the Department of Commerce’s Division of Consumer Protection has ever done.”
The defendants are also permanently banned from marketing or selling any real estate coaching programs in the future.
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