Fraud Prevention for Real Estate Syndicates
Kim Taylor of Syndication Attorneys, PLLC reminds us that investors need to pay careful attention to the bank accounts of the Syndicate (they’re involved with) and the people with access to them. It’s important that Syndicate managers closely control who has access to the bank and also closely monitor bank transactions within the Syndicate. Here are some protective measures that should be taken:
Make sure there are at least two people keeping an eye on the syndicate's bank accounts, with no single person in charge.
Unauthorized transfers or large expenditures, frequent ATM withdrawals are signs there may be a problem.
Watch for people namely partners and those with access to bank accounts living above their means – buying fancy toys, taking extravagant vacations, holding lavish parties, etc.
Knowing someone else is watching is the best prevention. If you discover embezzlement or suspect other financial misdeeds within your syndicate, contact Jerry of Ipsen Due Diligence. A financial investigation may be in order. At a minimum, those with access to bank withdrawals or other bank or ledger activity need to have a background check.