Fake LLC discovered. What should I do?

54 Replies

So a few Army buddies and I each chipped in 10k each to buy rental properties under an LLC. As the years have gone by it appears the "buddy" that runs it has been lieing to us and we dont own the properties that he says we do. He has been making false income and expense statement and putting them out each quarter. I called the local police and they say they cant do anything. Suggestions?

@Kevin Gregg Who actually owns it? Did he put it in his name or did he just never buy a property? How do you know the P&L statements are fake? Have you been receiving any kind of monthly/quarterly payment? There isn't much information provided, but certainly seems like fraud to me. I am pretty good at researching properties and their ownership so feel free to shoot me a PM with the address and I can look into it for you. 

Hi Kevin,

Try talking to the District Attorney (vs the just someone in the office) in the city he lives in.

Good Luck!

I will give the district attorney a try. Thanks

most likley they will say its a civil matter and you will have to sue them for fraud.

Rut ro. Hard to say what the DA will do. Maybe go after them for criminal fraud, maybe tell you it's civil, maybe tell you to make better business decisions. I would definitely file a complaint, no matter what they tell you they might or might not do. The good news is Waukesha County is not Milwaukee County, and maybe the system is not over-loaded. I dunno...

Good luck.

10K is a big one, but hopefully not enough to take down the farm.

What did he do with the cash?

Maybe the news would at least take the story and embarrass him?

Originally posted by @Kevin Gregg :

So a few Army buddies and I each chipped in 10k each to buy rental properties under an LLC. As the years have gone by it appears the "buddy" that runs it has been lieing to us and we dont own the properties that he says we do. He has been making false income and expense statement and putting them out each quarter. I called the local police and they say they cant do anything. Suggestions?

 Forget the civilian authorities, if y'all are still in the military go to his chain of command. The military takes fraud and thefts very serious. Does not have to military related. His security clearance in jeopardy thus his job in the military. 

When I was a Sergeant Major most of my days were spent dealing with this kind of stuff everyday. 

@Jay Hinrichs That was my original thought but I don't know if 10k is worth going after if I have to pay a lawyer.

@Merritt S. Thanks for the input. I don't know his wife owns several houses according to tax records so maybe that is the answer.

@Kevin Gregg

Tell him you want out of your share and need to be bought out, or you will go to court to force a sale. See what he says...

@Matt Michaelson Not a bad idea, my shares according to him are now worth 66k so that would be interesting to see what he says.

@Kevin Gregg

Worth a try! Did you guys have something drawn up? Were there other partners involved and if so, have you spoken to them about this?

@Matt Michaelson yes there are six of us total. We all signed contracts with a lawyer and have receipts for the payment. We are all in agreement that we need to do something we just don't know what yet.

Have you been paying TAXES on that money???!!! Boy, I'd be pissed. Could you tell him you are going to file amended returns for any money you've paid the government if he doesn't immediately do the right thing and put that property in an LLC and turn over management?

@Jill F. The guy running it handles everything. We are basically silent partners except that every year we get together and vote on different things. I have asked to see tax returns before amd have not gotten them yet.

@Kevin Gregg you can figure this out in about 5 minutes assuming you have the llc name. Search the county records for the llc and see if it owns anything. If it doesn’t then he never bought anything and you’ll likely need an attorney to sue him for fraud

Originally posted by @Caleb Heimsoth :

@Kevin Gregg you can figure this out in about 5 minutes assuming you have the llc name. Search the county records for the llc and see if it owns anything. If it doesn’t then he never bought anything and you’ll likely need an attorney to sue him for fraud

I looked on the website and called the clerk and there are no properties. I also went on the states business site and saw that our LLC was disbanded administratively in 2011.

Originally posted by @Jill F. :

@Kevin Gregg How have you been filing taxes without a schedule K?

 We agreed to put all the money into paying down the loans and collecting a check when they were paid off. So we haven't received a check to pay taxes on. It was basically going to be a pension for each of us based on how many shares we owned since we didn't want to collect small checks right away and pay taxes on them. 

Originally posted by @Kevin Gregg :
Originally posted by @Caleb Heimsoth:

@Kevin Gregg you can figure this out in about 5 minutes assuming you have the llc name. Search the county records for the llc and see if it owns anything. If it doesn’t then he never bought anything and you’ll likely need an attorney to sue him for fraud

I looked on the website and called the clerk and there are no properties. I also went on the states business site and saw that our LLC was disbanded administratively in 2011.

Was 2011 the year this was all set up? Have you received any sort of income from this since then? 

I’m guessing your 10k is gone and you aren’t getting it back.  This is clearly fraud assuming you looked I up correctly.  He never bought anything.  Also you may want to check statute of limitations on this stuff if I’d already 8 years old 

Originally posted by @Caleb Heimsoth :
Originally posted by @Kevin Gregg:
Originally posted by @Caleb Heimsoth:

@Kevin Gregg you can figure this out in about 5 minutes assuming you have the llc name. Search the county records for the llc and see if it owns anything. If it doesn’t then he never bought anything and you’ll likely need an attorney to sue him for fraud

I looked on the website and called the clerk and there are no properties. I also went on the states business site and saw that our LLC was disbanded administratively in 2011.

Was 2011 the year this was all set up? Have you received any sort of income from this since then? 

I’m guessing your 10k is gone and you aren’t getting it back.  This is clearly fraud assuming you looked I up correctly.  He never bought anything.  Also you may want to check statute of limitations on this stuff if I’d already 8 years old 

We formed our LLC in 2007. We received a couple small checks for a couple hundred dollars each before we decided to pay down our loans instead. I think it may be possible that we did buy properties in the beginning and maybe they failed and the person is just leading us on like everything is good. We all live at least an hour from where these properties are supposed to be and the person running it has another business that takes him out of state for a portion of the year so it is hard to track him down.

Originally posted by @Kevin Gregg :
Originally posted by @Caleb Heimsoth:
Originally posted by @Kevin Gregg:
Originally posted by @Caleb Heimsoth:

@Kevin Gregg you can figure this out in about 5 minutes assuming you have the llc name. Search the county records for the llc and see if it owns anything. If it doesn’t then he never bought anything and you’ll likely need an attorney to sue him for fraud

I looked on the website and called the clerk and there are no properties. I also went on the states business site and saw that our LLC was disbanded administratively in 2011.

Was 2011 the year this was all set up? Have you received any sort of income from this since then? 

I’m guessing your 10k is gone and you aren’t getting it back.  This is clearly fraud assuming you looked I up correctly.  He never bought anything.  Also you may want to check statute of limitations on this stuff if I’d already 8 years old 

We formed our LLC in 2007. We received a couple small checks for a couple hundred dollars each before we decided to pay down our loans instead. I think it may be possible that we did buy properties in the beginning and maybe they failed and the person is just leading us on like everything is good. We all live at least an hour from where these properties are supposed to be and the person running it has another business that takes him out of state for a portion of the year so it is hard to track him down.

Search the county register deeds office to see if he ever bought anything.  You’re welcome to believe what you want but so many red flags here makes me think you have been defrauded and likely out that money.   

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