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Russian mob Ponzi scheme allegedly steals $6M from Texas land investors

Investors file a lawsuit against a man said to have ties to Russian organized crime activities and believed to have swindled real estate investors out of over $6 million dollars.

Real estate investment scam

Two Austin investors have filed a lawsuit claiming the North American Title Company helped to orchestrate a land investment scam, overseen by members of an East Coast Russian mob, according to YNN Austin News.

Investor Steve Aubrey is suing the title company at its regional headquarters in Dallas, claiming their agent based in Round Rock failed to proof check a land deal which cost him and his business partner over $900,000.

“I think of the Bernie Madoff people that were hurt, and I think about how awful it is for them, and I see it as just a little bit worse because this was a friend of mine that did it to me,” Aubrey said. As is common in traditional pyramid or Ponzi schemes, family or friends are tapped first as investors.

How the scheme worked

YNN reports that Aubrey is accusing his friend, Austin venture capitalist, Peter Barlin of organizing hard-money investments in 2006, promising high-interest returns to develop 1,700 acres of land in Texas called “Wild Horse Ranch.”

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Court documents show that Barlin negotiated through a company he set up on behalf of developer (and alleged Russian mob member) Vitaly Zaretsky, called Creative Financial Solutions which Barlin’s attorney disavows any affiliation with.

Zaretsky was supposed to use the financial investment to develop Wild Horse Ranch, but the ground is still untouched. Aubrey and his partner believe Zaretsky may have taken off with over $6 million from other Central Texas investors.

“This is not something Peter was aware of. This is all going on without Barlin’s knowledge, but it’s something we now know as a result of this litigation,” Barlin’s attorney said.

“A Russian mob-driven Ponzi scheme”

According to YNN, Aubrey’s attorney says that between broker Peter Barlin, title agent Karen Williams, developer Vitaly Zaretsky, among others mentioned in lawsuit, it’s only a matter of time before their court-cited actions will show a Russian mob-driven Ponzi scheme. “North American Title Company closed no more than 26 transactions associated with Vitaly Zaretsky. There was a personal relationship here. They knew each other. They knew each other well.”

The title agent involved is said to be seeking a criminal defense attorney, Zaretsky has left town, North American Title Company cannot comment on active litigation, and Wild Horse Ranch is still vacant land. The Wild Horse land deal will go to trial in federal court in coming months.

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Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

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