Just Lookin’! Phony Big Spenders Bluff Their Way Into Dream Homes

“People think it’s some kind of sport to look at houses,” said Hamptons broker Tina Fredericks, who deals in $100,000 summer rentals and sold Revlon chairman Ronald Perelman the Creeks estate in East Hampton. “They look at a magazine like Homes & Land , pull out pages and say, ‘How about this and this and this?’ … Whether they’re qualified or not doesn’t seem to bother them.”

Tell that to WNBC-TV news anchor Michelle Marsh. A few years ago, just before real estate prices began their current fin de siècle bloat, Ms. Marsh put her penthouse at the Century, a condominium at 25 Central Park West, up for sale. With two floors, each with a terrace, three bedrooms and a library, it was listed at what, in retrospect, was the bargain price of $2.4 million. But in the mid-90’s doldrums, it wasn’t moving. That was until, as Ms. Marsh’s broker remembered it, “a very nice young man in his late 30’s … a lovely banker-type dresser” who “spoke very nicely” and “dropped names” was brought to the duplex by a respectable broker at Ambrose Mar-Elia Company. The buyer said he was from Texas, had a trust fund held by Goldman, Sachs & Company, and was anxious to close the deal because he had been outbid on a SoHo penthouse. “He wanted to move right along,” said Ms. Marsh’s broker, who asked that she not be named. The broker found the buyer a real estate lawyer, and the buyer’s offer was accepted. He signed a contract, pulled out his checkbook and scribbled out his 10 percent deposit. He then went home and stopped payment on the check.

Confronted by the broker, he wrote another, which also bounced. He didn’t pay the lawyer, and he stopped returning calls. Ms. Marsh, the three-time Emmy Award-winning newscaster, had been had by one of a new breed that is cropping up more and more in the upper reaches of the real estate market: the house-hunting impostor. A month of Ms. Marsh’s time had been wasted, and she’s far from alone.

“I think it’s like a sickness, an illness,” said Sharon Baum, a broker at the Corcoran Group, who said that in a recent week, she had to ward off three separate imaginary billionaires who pretended they were contenders to buy the much publicized, $30 million house at 11 East 62nd Street. “When you have trophy properties like these, they really pull out the scammers.”

Ms. Baum said there are two kinds of fake buyers. First are the delusionally bored: “People who do it because it’s better than sitting in McDonald’s sipping a cup of coffee all day,” she said. “Instead, you get treated royally and get to see a property.”

And then there are the “scam artists,” she said, who have some devious plan to try to get as much out of appearing to be buying the property as they can. “You’re trying to make one deal seem so real and use that to attract another deal,” explained Ms. Baum. “They’ll often want a letter of intent. And I’ll say, ‘You have it backwards, because the letter of intent should come from you.'”

Scammers tend to hit condos and town houses, which, unlike co-ops, require less information up front.

Smooth-talking and exacting in their facsimile of a real, live rich person, they bamboozle the brokers into driving them around town-often in rented cars-and giving them tours of places they couldn’t otherwise do much more than deliver groceries to. Occasionally, the con goes further, and the owners end up dickering over terms with them.

Ms. Baum said she thinks she’s “pretty aware of the different ploys by now.” But brokers keep on bringing them in: “They want it to be true,” Ms. Baum said. “Hope springs eternal.” Especially for a 3 to 5 percent commission on 30 million bucks. And judging between a real millionaire and a fake is not always easy. “Obviously, you don’t want to dismiss someone,” cautioned Ms. Baum. “That would be a mistake.”

And while most people with the wealth to buy a $30 million house are reasonably well known, Sotheby’s International Realty broker John Golden points out, “You never know. It could be a rich peanut farmer.”

Most brokers who have dealt in high-end properties have had a particularly rankling time-waster in their past. “It happens every day of the week,” said one broker, who just washed his hands of a customer who claimed he had $3 million to spend on a penthouse in midtown, an apartment that the broker described as “one of the best apartments that I’ve ever seen, with double-height ceilings and a curving stairway.”

“He put in an offer but couldn’t even afford the maintenance on the place,” said the broker of the fantasy shopper. The broker pulled the plug on the deal when he found out that the delusional buyer’s plan was to get his father to pay for it-he just hadn’t informed Dad of the idea. “Otherwise, who knows how far he would have taken it,” said the broker. “It’s entertainment and fun for people to go around and look at big, expensive apartments.”

Another broker remembered a summer in the mid-90’s when she escorted a “fat Englishman” and his “young black companion,” who were staying in one of the Upper East Side’s boutique hotels, around to “every house in town.” Restricting their search to “the major town houses,” such as the limestone Cartier mansion at 15 East 92nd Street, the broker recalled sweating through several days of often un-air-conditioned home tours. The Englishman, who was garroted into his navy suit by a Hermès tie, could not always make it up the stairs, and would send his companion up to check things out.

“But nothing was elaborate enough,” she said. “I must have shown him at least six houses. Then I started to ignore him.”

Why did she show him anything in the first place? “When someone wants to see the biggest things, you kind of give it a shot,” she said.

Around the same time, Michele Conte, a high-end condominium specialist at Brown Harris Stevens Residential Sales, was the on-site sales manager for the conversion of 1049 Fifth Avenue. Another broker had been contacted by what Ms. Conte understood to be a hot new rap band, and the broker was chauffeuring the hip-hoppers around town, looking for a “phat crib” for their front man. “They were all like real rappers,” Ms. Conte remembered, while admitting that none of the sales staff or brokers were exactly in the target demographics for Yo! MTV Raps . “They came in with the clothes and a guy they said was their manager … We really liked them. They were just so playful.”

They liked the look of a 5,000-square-foot, $5.5 million apartment on the 20th floor. “They came back twice and made a bid,” Ms. Conte said. “When I asked for verification of finances, they disappeared.” Instead, Rush Limbaugh bought the place.

Most impostors evaporate when it comes time to talk money. “You can’t really be defrauded,” said Ms. Conte, “because they can’t go through with it. All they can do is waste your time.” But a charismatic fake buyer will try to keep the game going with a bait-and-switch, always thinking of ways to not close on one property and to roll the search over to the next one.

Michele Kleier, president of Gumley Haft Kleier Inc., had one of those two summers ago. “She came in a stretch limousine,” she said of a woman who called up after having seen a 10,000-square-foot house at 11 East 82nd Street on the cover of Unique Homes magazine.

“When she first called me, she said, ‘This is Xi-Xi, but that’s not my real name,'” said Ms. Kleier. The woman said she was the wife of a very wealthy man from Monaco who had been recently decapitated in a boating accident-although, Xi-Xi confided, she herself believed it was murder. Hence the secrecy. Things were slow that summer, so Ms. Kleier decided she’d go along for the ride.

Xi-Xi was a plump, 30-ish, casually dressed woman who was living at a suite at the Hilton in Short Hills, N.J. When she came into the city, it was always with her mother, decked out in Versace, and her son. The limo was driven by a “very scary” gun-toting driver, said Ms. Kleier, who added that Xi-Xi “was always stopping at Cartier or Harry Winston to get a $10,000 ring.” The shop owners seemed to know her. As it turned out, Xi-Xi concluded that the East 82nd Street house, which Ronald Perelman eventually bought for $10 million as a corporate apartment for one of his executives, wasn’t right for her. “She wanted a garage,” said Ms. Kleier. Xi-Xi decided that what she really wanted was Lady Fairfax’s apartment on top of the Pierre hotel. It’s got a ballroom, 360-degree views and a $28 million price tag. “She had done all her research,” said Ms. Kleier, “and knew all about Lady Fairfax,” whom Xi-Xi claimed to know socially. Meanwhile, said Ms. Kleier, the Fairfax family “checked out her story and decided that she was the heir of the Mars fortune,” based on what they saw as a similarity between Xi-Xi’s life story and that of a Mars heir.

But then Xi-Xi wiggled out of the Pierre deal, explaining, said Ms. Kleier, that she “didn’t want to buy a co-op because she didn’t want to ask her friends for social references.” On to a $15 million horse farm in Dutchess County, which actually went to contract. But then Xi-Xi made an impossible demand-that the current residents and their horses be out in a month, so she could have a Fourth of July party-which ended that deal. A country retreat in Tuxedo Park, N.Y., also didn’t work out. This went on for months until, finally, Xi-Xi became fixated on a house on the corner of 64th Street and Park Avenue with a $12 million bounty. (It remains unsold today.) “She was faxing power of attorneys back and forth to Monaco,” remembered Ms. Kleier. But then Xi-Xi told Ms. Kleier she was uncomfortable wiring money into New York banks because they would want to know where the money came from, and Xi-Xi wanted that to be a secret. She told Ms. Kleier that maybe she would have her secretary bring the cash in a suitcase. Then she disappeared, leaving thousands of dollars of unpaid bills at the Hilton, where she apparently was pleading wire transfer difficulties in lieu of paying her bills, too.

“Everybody believed her,” said Ms. Kleier. “To this day, I don’t know what she got out of this.”

“Not that it wasn’t fun,” she added. “I got to see a lot of pretty properties outside of the city that I wouldn’t have otherwise seen.” And Xi-Xi’s mystery driver even dropped off some exotic imported two-tone roses on Ms. Kleier’s birthday.

“You can’t be too jaded,” said Ms. Kleier of her experience, “because there is a chance that it is for real.”

Brokers have created a loose portrait of the serial bluffer. The impostor, said Ms. Conte, usually has perfected the persona of a very rich and powerful person, “busy, authoritative, connected,” while often genuinely wealthy people don’t look that impressive. Brokers say they watch out for name-dropping and a cavalier heedlessness about money: Truly rich folks tend to be a bit cheap. And the fakers “only call for the most expensive properties,” said Mr. Golden, who said he had a woman who sounded “very cultured and rich” try to pay $14 million for an East Hampton estate over the phone a couple of years ago. Another warning sign: outlandish requirements. Mr. Golden’s phone-in customer wanted a helipad and bulletproof glass around the pool. Other red flags: P.O. boxes and middle-class telephone exchanges. And always call back to check the number to make sure it’s not a pay phone or a prison.

And, said Ms. Baum, “They always give you much more information than you need or want to know.” One of her faux customers for the East 62nd Street house had a well-rehearsed spiel about how he was selling his business because his children weren’t interested in it. “I was thinking, I didn’t ask him any of this,” Ms. Baum said.

Then there is the tricky question of the big-name shopper: Sometimes a celebrity will send out other people to check out the properties first, to avoid ending up in the New York Post ‘s Page Six column. Back in the late 1980’s, Ms. Conte had a man who claimed to be a son of Jack Warner, the late founder of the Warner Brothers movie studio, who said he was interested in spending $5 million to combine two apartments she had for sale at 60 East 88th Street. She met him at a restaurant in the theater district with his broker; he had a regular table and was addressed as “Mr. Warner” by the maître d’. Ms. Conte drew up preliminary architectural plans and showed them to him. “I want to go to contract as soon as possible,” he told her.

Then the morning they were set to meet to put things in order, he never showed up, and his broker never heard from him again.

“I’ll never forget that he took me to lunch once with my 16-year-old daughter,” said Ms. Conte. “And she said to me, ‘I don’t think he can afford this.’ I said, ‘Why?’ She said, ‘He’s wearing a polyester jacket.'”

Three years later, Ms. Conte said, she spotted “Mr. Warner” at the bar of a restaurant on Sixth Avenue and asked him what happened to him. He stammered something like, “Uh, I had to get back to the coast.” Ms. Conte noticed he was wearing the same polyester jacket.

Indeed, scammers tend not to skip town. Jackie Vincent, a broker at Halstead Property Company, had a buyer interested in a $2.75 million apartment at Museum Tower. He said he was “traveling a lot during the week … all over the world,” said Ms. Vincent. The man, an overweight, often sweaty man in his 50’s, would drop into town, leaving a puddle of innuendo and dropped names in his wake: He was going to a hockey game in Canada with the Bronfmans. He’d just sold a $15 million home abroad. He was going to use Henry Kissinger as a reference. “I worked with him on and off for eight or nine months,” said Ms. Vincent. “There was something about him that just charmed people.”

She realized they weren’t going anywhere when “we had two or three accepted offers” and then he’d pull out. He never paid his lawyer for drawing up his contracts. “He was a total, total fraud,” Ms. Vincent said. Since then, she’s found out more about him, and even met a few women who dated him. “He’s actually still in New York. I see him on the street sometimes; he doesn’t acknowledge me. He’s very ill. He’s a very ill man.”

To guard against fraudulent shoppers, brokers are often requiring a letter from a bank saying they are sufficiently rich. But even that hasn’t stopped some. “I had one last week, and guess where the banking reference was? A bank in Liechtenstein,” said Ms. Baum, disgusted.

Scammers often can’t seem to help themselves. The impostor who took Michelle Marsh for a ride actually tried to do it to her again. This time, the incorrigible fraud was represented by the brokerage Douglas Elliman, which Ms. Marsh also had switched to after her previous debacle. The broker who had the exclusive on her place then, Jeff Rothstein, was listening to an office mate tell him about an exciting new customer, “a wealthy businessman” who was “really secretive” and who wanted exactly what Ms. Marsh was trying to unload. As they were talking, Mr. Rothstein realized, “It just sounded so familiar.” He realized it was the same guy who had done this to Ms. Marsh the first time, circling back.

It doesn’t always end so benignly. One broker recalled a Texan who was trying to do a $2 million combination of units in the just completed Museum Tower. He would fly into town, check into the Plaza Hotel and show up to look at apartments in a limo with his Texas girlfriend-“a real trophy young blonde,” said the broker. On the day of the closing, the broker stood on West 53rd Street in a downpour waiting for the Texan, but he never showed. A few days later, the jilted broker got a call from the girlfriend, who was by herself at the Plaza and didn’t know anyone else in New York. The girlfriend said that her boyfriend had told her to quit her job, fly to New York and check into the Plaza, which she had done on her own credit card. She had been there for three days, waiting, with no sign of the boyfriend.

The broker told her to go home.

Just Lookin’!  Phony Big Spenders Bluff Their Way Into Dream Homes