Mexico real-estate ventures blasted
Investors discuss fraud at forum
Dennis Wagner
The Arizona Republic
Mar. 6, 2008 12:00 AM

Arizona and Sonora state officials were bombarded with criticism Wednesday from more than 100 people at a Phoenix forum on real-estate frauds and failures in northern Mexico.

"You're stealing our money," said one American, facing Sonora's tourism director. "You suck our money into Mexico, where you've stolen it."

Thousands of Arizonans have bought property in Puerto Peñasco without problems, but an Arizona Republic story in November described how some buyers in a development known as Playa Norte, or North Beach, lost millions of dollars after the project became mired in Mexican court battles.


On Wednesday, American investors spent 2 1/2 hours telling of what they said were land scams that victimized them through false contracts, unethical lawyers, altered property lines and unfulfilled promises.

Arizona Real Estate Commissioner Sam Wercinski convened the meeting to hear residents concerns because he and Gov. Janet Napolitano have received numerous complaints about rip-offs.

The crowd responded with angry challenges.

"My question is: When in the hell do you know that you have title, that you really own it in Mexico?" asked Monty Wallace, a 55-year-old Tucson resident who lost his retirement fund in Puerto Peñasco, also known as Rocky Point. "Everything, all my money . . . the Sonoran government is scamming us."

Howard Israel of Ahwatukee, who recently launched an Internet site known as rockypointexposed.com, told investors they should turn to the media if authorities won't stop the fraud. "If the state of Sonora does nothing, they can expect Rocky Point to become the sleepy little fishing village it used to be known as," Israel said.

Epifanio Salido Pavlovich, tourism director for Sonora, said many of the grievances stem from court battles among Mexican developers. "We are very concerned about what's happening to you guys and your families," he said. "(But) these problems are not in the hands of the state government. They're in judicial hands."

He asked audience members to write letters to Napolitano and Sonoran Gov. Eduardo Bours Castelo detailing the complaints. They promised to investigate and announce their findings at a follow-up meeting in three months.

Some investors at the forum said they were jilted on real-estate deals in Rocky Point by Arizona developers after signing contracts and making payments in the Valley.

Kim Stone of Tucson said she gave $112,000 to Phoenix developers of the Playa Azul condominium tower last May, only to learn a month later that the project was frozen and no refunds were available. "I'm dealing with an American company. They are the ones I paid. And they are responsible," Stone said, choking up. "It's my life savings."

Berta Casillas of Phoenix said she purchased condo units thinking the investment was protected by title insurance but got nothing after the project died.

Kent White, president of the professional real-estate agents association in Rocky Point, said the North Beach project is a "travesty," but Sonoran investments should not be judged by one bad example. "You can buy safely in Mexico," he said.

Wercinski said he is working to educate consumers and use his office for civil action against illicit companies that advertise Sonoran real estate in Arizona.

Salido Pavlovich said the Sonoran government is attempting to clean up the real-estate business with new regulations.

http://www.azcentral.com/news/articles/ ... int06.html