SANTO DOMINGO.- Reports of real estate scams, some of which have resulted in the imprisonment of individuals whom the Public Prosecutor's Office identifies as responsible for the acts, were among the difficulties faced by the real estate and construction sectors during 2024.
In October 2023, Vice President Raquel Peña addressed the issue, announcing that the government would create a technical commission to deal with the complaints that had already reached the public regarding cases of fraud against home buyers, especially members of the Dominican community residing in the United States.
Although it remained just words, Peña stated that, on the instructions of President Luis Abinader, the Dominican government would not allow these criminal acts to occur. “We will not continue to permit this type of wrongdoing,” the vice president emphasized, referring to the case of the construction company IndisArq.
At the beginning of January of this year, the Public Prosecutor's Office launched "Operation Nest," through which seven people and two commercial structures, including the construction company IndisArq, were accused of being part of a criminal structure that allegedly obtained more than 700 million pesos through the fraudulent sale of apartments in Greater Santo Domingo.
On the night of Thursday, January 11, Judge Rigoberto Sena of the Permanent Attention Office of the National District ordered 18 months of preventive detention against the main person involved in the alleged real estate fraud network, Emmanuel Rivera Ledesma, a measure he is serving at the Najayo-Hombres Correctional and Rehabilitation Center (CCR).
According to the Public Prosecutor's file, which exceeds 400 pages, the network allegedly sold the same property multiple times, a fact reported by several of the alleged victims. Reilin Arismendy Rosario García, one of the individuals involved who cooperated with the authorities, revealed that a 14-apartment building was sold 31 times. The number of complainants exceeded 300 victims.
Second case
Also in January, a real estate scam was reported by several families who allegedly paid for the purchase of apartments in a tower located in the Renacimiento sector of the National District, from where some were evicted.
Engineer Jorge Freddy Figuereo de los Santos was the builder identified as responsible for the events and who allegedly committed a double mortgage, incurring debts that he could not pay off, which is why he allegedly lost the Cofisa tower, located on Manolo Tavarez Justo street in the Dominican capital.
An investigation presented on the night of Monday, January 15, 2024, in the “Report with Alicia Ortega”, revealed that de los Santos, even having a mortgage-backed loan contract with Banco de Reservas for 62.5 million pesos, incurred 4 additional loans for more than US$5 million with the commercial company TLI Investments, supposedly to finish the property.
“And upon receiving those 4 loans and being unable to pay them, he lost the tower by virtue of an adjudication ruling that resulted in Mr. Julio Colón, who lived in tower 8A, being dispossessed,” revealed lawyer José Aníbal Guzmán, legal representative of the victims, to El Informe.
Marcelino Báez, a retired major general of the armed forces, and his wife Delma Matos, recounted that in 2014 they paid the engineer the sum of 9.5 million pesos for apartment 2B of the aforementioned tower.
Another affected individual was Julio Colón, who explained that after working in the United States for over 40 years, he purchased unit 8A in the Cofisa tower for 8 million pesos. He made a down payment of RD$650,000 on July 26, 2013, and completed the full payment in 2018.
Raúl Almonte and his family, as well as Elsa de Jesús, also claimed to be victims of fraud. Brasil Jiménez, the lawyer for the latter, explained that they discovered the apartment that belonged to de Jesús had been assigned to the company TLI Investments and that her property had been transferred to another person's name.
Third case
This December, another case came to light involving a group of people who were allegedly defrauded by the company Novasco Real Estate SR L in the purchase of real estate, a case that has been taken over by the Public Prosecutor's Office of La Romana.
Carolina Núñez, the lawyer representing 38 victims, highlighted that the amount involved among the plaintiffs through her office is approximately US$500,000. “The company that allegedly developed the project is known as Novasco Real Estate, a shell company. It was only incorporated in 2021, and eight months later it was already being promoted as a major project developer,” she explained.
Marina Marte, one of the alleged victims, told El Inmobiliario that she paid US$16,100 for a project scheduled to begin in July of this year, but to this day there is no sign of any construction. “The project was scheduled to begin in July 2024, and to this day they haven't started it. They aren't giving us any information about the project, they closed their offices, they had a project in Romana with the final stage to be delivered in March 2024, and the land isn't even in their name. They haven't done any earthmoving.”.
What have the sector's institutions done?
In April, the Dominican Association of Housing Builders and Developers (ACOPROVI) announced the signing of an agreement with five of the country's leading construction and real estate entities, with the aim of strengthening the industry and providing greater security to buyers and investors.
The agreement aimed to promote best practices in the construction and real estate sector, through the issuance of information, parameters, legal mandates and educational actions to prevent real estate scams.
In that regard, in May representatives of the union met with Consul Eligio Jáquez to outline guidelines for ongoing support for Dominicans living abroad in the United States.
“We are currently focusing on guiding the diaspora in making safe real estate investments in the Dominican Republic. We are committed to the construction and housing sector, and that is why we have decided to prepare materials with accurate and relevant information to guide Dominicans abroad on when and how it is safe to invest in real estate in our country,” commented Annerys Meléndez, president of Acoprovi, during the meeting with the then Dominican diplomat.
Draft bills to increase penalties for fraud
Both the bill on the prosecution and judicialization of criminal organizations, which the Executive Branch submitted to the National Congress this December, and the proposed real estate intermediation law currently being studied by a Special Commission in the Chamber of Deputies, provide for harsher penalties for people who commit fraud in the Dominican Republic.
In section VI "on the crimes of mass fraud", the document submitted by President Luis Abinader states: "Those who, using assumed names and qualities or employing fraudulent practices, by action or omission, with the intention of making a profit, use deception or fraudulent maneuvers to attract assets from a plurality of people, with the promise of providing them with a pecuniary benefit, incur the crime of mass fraud.".
The law, whose purpose, it says, is to establish effective rules for the detection, prosecution, judicialization and punishment of acts of organized crime typified therein, states that those guilty of mass fraud will be punished with sentences of 3 to 10 years in prison and a fine of one hundred to 3 thousand minimum wages.
The current Penal Code of the Dominican Republic establishes in its article 405 a penalty of six months to two years of correctional imprisonment, for fraud and a fine of twenty to two hundred pesos.
Article 55 of the draft bill that would regulate Real Estate Intermediation in the country proposes that real estate crimes that have "aggravating circumstances" be punished with up to 10 years in prison and up to 100 minimum wages, taking as a reference what is paid in the public sector.
