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DONALD TRUMP – JUST ANOTHER AMERICAN GANGSTER IN BAJA

By Le Roy Jose Amate Perez

The 32 million dollars that “investors” lost in the Trump Towers scam is but another example of a U.S. marketing team with a “credible name” ripping off fellow citizens in Mexico. I use the term “investor” in quotes because many of the victims were investor-speculators. The “flipping” of condos, held with large deposits during “presale”, became extremely popular and highly profitable, in the Baja boom days – 2002 to 2007. During construction, condos would often triple in value before completion. The same speculator motivation, in the overvalued U.S. real estate and stock markets, made Baja an attractive alternative. They drove the few miles across the border with the allure of a higher return on investment. But, like the sub prime mortgage market and derivative stock manipulations: Laws, regulation and enforcement protection are sorely lacking. And investor safeguards, on unfinished projects, is particularly lacking in Mexico.

As a consultant to investors in Mexico for 26 years, these are the gloomiest days in my career. And like Punta Banda, in the year 2000, when 200 families were evicted form homes that cost a total of 80 million dollars, Mexico was wrongly blamed for the catastrophe by the world press (see www.mexicomatters.net /Punta Banda secrets). I was directly involved in trying to direct foreign investors away from Punta Banda. It was incredulous to me, and the Baja legal community, that U.S. citizens would knowingly buy property whose title was being litigated. Would they make the same decision on a purchase in the U.S.? My observation, at the time, was that they made these high risk investments in a trance like state. I called it - “rapture of Baja”. They wanted so badly to realize their dream of an affordable home on the beach, they forsook good judgment. But, like the old saw: “If it is too good to be true, it probably is” and it was.
A major cause of the Punta Banda disaster is that investors trusted the persuasive and seemingly credible marketing team who said the title problem would “go away”. Claiming it was just a nuisance lawsuit.. I explained to dozens of buyers that their sales agents did not speak or read Spanish, were not Mexican attorneys and therefore unqualified to make investor recommendations. But, to no avail.

For every one hundred “real estate problems”, that come across my desk, ninety nine could have been avoided by a small dose of due diligence. With title insurance, issued by U.S. title insurance companies, all risk can be eliminated. The problem, for most foreign buyers in Mexico, is ignorance: of the language and Mexican law. Contributing to the problem is difficulty in finding a reputable, English speaking, Mexican attorney to assist you. Unfortunately most Mexican attorneys lack experience in foreign investment law. Understandable, since most, if not all, their clients are Mexican not foreigners. For qualified assistance, contact a Stewart Title or First American Title representative in Mexico. They have a list of qualified attorneys who do their title studies.

Under California law, builders must keep deposits in escrow or post bonds to protect the funds. Whereas, Baja California law allows deposits to be used to finance projects. The realtor or developer, selling you the property, becomes the escrow agent. A case of “The fox guarding the hen house”. Realtors in Mexico are not licensed, and given human nature (Bernie Madoff), abuses of trust are commonplace. Again, a dilemma for the foreign buyer in “who to trust”. And, in the example of Donald Trump, buyers are lulled into complacency because of a U.S. brand name like: Century 21, Remax or Coldwell Banker. The regulatory controls are no more stringent for a U.S. based franchise than they are for the independent Mexican realtor. They simply hang out a shingle without restrictions - no exams or permits. Coldwell Banker Mexico has been involved in some of the biggest swindles in Baja and the U.S. firm did the same as Trump. They turned their backs on the problem.

What is so disturbing to us, as professionals in foreign investment, is that Mexico is painted as the culprit in the Gringo media. The border drug war is another example. The violence in Tijuana is a direct result of U.S. political pressure for Mexico to arrest cartel leaders. A significant number of arrests have led to a vacuum in gang leadership and the resulting turf wars. Mexicans are enduring kidnappings and street violence because President Calderon has done such a good job of “taking out” drug lords without reciprocity from Uncle Sam.

In Mexico, owning a gun is illegal. As a result, Mexico historically has had a relatively low violent crime rate. The drug wars have dramatically changed that situation. We now have a flood of sophisticated weapons being supplied by “legal” arms dealers” in the United States. Thousands of guns are entering the country from the U.S. daily. It is easy for arms smugglers because vehicles are not stopped and searched routinely entering Mexico from the United States.

The U.S. drug consumer and the ease of weapon sales, north of the border, are the root causes of the violence. Yet Mexico and its tourist dependent economy unilaterally take the hit: I am not holding Mexico harmless, but should we condemn Mexico without accepting full responsibility as well? We are connected, like Siamese twins, at the border. It is incumbent upon both sides to act like good neighbors and work together to solve mutual problems. The risks of traveling in Mexico are no greater for a yank than for a Mexican traveling in the states. Yet, I have never heard a Mexican postpone or cancel a trip to the U.S. out of fear. Huge numbers of Americans, over the past year, have cancelled trips to Mexico. If we are exporting guns and real estate swindlers, should we not apply equal condemnation to all? Should the citizens of the United States not hold gangster Trump responsible for the theft of tens of millions? Let’s stop calling the kettle black and begin treating our mutual problems for what they are – mutual.

 

Le Roy Jose Amate Perez.

Le Roy Jose Amate Perez is the founder of Mexicomatters and www.mexicomatters.net . You can contact Amate directly by telephone: 619 819 9369 or in Mexico – 646 1766758. E mail address leeamate@gmail.com

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