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larrywww

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Reply with quote  #1 
Many on this website will recall that Shawn Watkins was charged with real estate fraud, having defrauded over 50 investors for a total loss of 3.5 million dollars.  He used to be President of Investors Workshops, an investment club that has since closed down.   He will go to trial in August of 2017---and is entitled to a presumption of innocence under the law.

It was recently announced that Angel Bronsgeest had pleaded guilty to one count of wire fraud---a charge that might carry up to 20 years in jail.

It's kind of an astonishing fraud----I thought there was a possibility that only Shawn Watkins was the perpetrator----but she wouldn't have pleaded guilty unless she was also responsible.

According to the article, from 2007 to 2014 Bronsgeest informed investors that she and/or Watkins had obtained a portfolio of rental properties and that they should invest in the portfolio.  In fact, they had no properties at all and all their cash flow (about which they bragged) was negative---it was all a Ponzi scheme.

 http://www.humboldtbeacon.com/article/zz/20170125/NEWS/170129476
Paul

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Reply with quote  #2 
On a number of occasions, I almost attended one of those Investors Workshop meetings. I remember he had solid guest speakers: Hannigan, Norris and O'Toole come to mind. 

Angel Bronsgeest is a familiar name.

I'm always amazed at Ponzi schemes. The scammer has to know there will come a time when it all blows up. 
mlreits

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Reply with quote  #3 
People do funny things when they're desperate. It takes a different mindset to take OPM without the intention of returning it. If it took someone 5 years to save $50k-$100k and the ponzi operator robbed it from them, the ponzi operator has essentially stole 5 years of the investor's life. Some people are just bad seeds unfortunately.
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larrywww

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Yeah, that's the paradox, they were a very good investment club.

They hosted the debate between Bruce Norris and Sean O'Toole, which I thought was an outstanding club topic.

They came up with the idea of having investor panels---where 3 or 4 investors would give advice---a notion copied by alot of other clubs.  They were the first club to introduce Derek Walkington to speak, and he was a really good speaker, and has gone on to speak at alot of other clubs.

And at some point they gave away all of their audios for free on the internet, a couple year's worth.  (I think they might have known that the end was near, but I don't know).

They were on the Norris website as a recommended club--and had regular appearances from Bruce and alot of respected speakers.

And Shawn Watkins was a former cop (at least he claimed to be), and who is going to suspect a former cop of being a thief?

Curious, that.

The truth is that it takes law enforcement forever to make a criminal case, it takes years, even if on the surface it seems like a slam dunk----and with 50 investors defrauded, it's not like there was a shortage of witnesses.

Paul

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I knew Derek Walkington when he lived in Canyon Lake. He flipped a couple of houses there. He was a nice guy but not totally buttoned up.
larrywww

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Reply with quote  #6 
Well, I don't know him personally.  But he was an entertaining speaker.  What I recall about him was that he had this kind of manic personality---and I was wondering whether that was just him---or maybe his speaking style.  He came off as kind of a deal junkie (his words, as I recall).

But I'm not sure that he wasn't quite successful, actually.

Salesmanship is a serious asset in this business----consider the case of Shawn Watkins----who sold millions of dollars to investors for a portfolio that never existed.

I'm not saying that's the proper way to succeed, but you can't underestimate the importance of salemanship in this business.

What really surprised me about Walkington was that he seemed to have no farm---he was taking deals in Bakersfield, or wherever.

Normally that strategy might not work because it will tend to spread things too thin.  But why it might have worked out for him was that at the time you and I were investing there was a time limit at some point when the hedge funds took over.  Which means that those who front loaded alot of deals might have been rewarded for doing so.  I don't know---again I don't know him personally.

Some of the investor speakers had entertaining war stories to tell---I don't know whether they were truly successful or not.

The truth is that it's hard to find speakers for investment clubs---do you really want to host Bruce Norris for the 20th time he gives (basically) the same talk?

It's kind of a tough business.

I thought about starting my own club at one point.  But what always deterred me was that (1) I didn't want the same old tired lineup as every other club and (2) I felt like coming up with speakers would be very difficult.

And I think there is mainly an advantage to being a club President when you want to find deals.  But the market is really getting very overpriced.  (The other advantage might to be to get people to lend you money----I have no plans on going this route).

But I'm not so obsessed about these kind of clubs any longer given that the real estate market has turned flat.  Now, at least for me, is more of a time to learn more about other kinds of investments and take a break.
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