We represent investors who suffered losses as a result of investments in sale-leaseback agreements. Sale-leaseback agreements are a typical component of many Ponzi schemes and are often associated with fraudulent securities offerings.

A sale-leaseback contract is an investment arrangement where property – often, but not always, real estate property – is sold to an investor, who as part of the deal immediately executes a long-term management agreement with the seller or a third party affiliated with or under the control of the seller.

The two contracts – the sale and the leaseback or management agreement – create a security under well-established SEC rules and US Supreme Court precedent (the “Howey test”).

In virtually all cases, such securities are offered and sold to investors in violation of the US securities laws’ registration requirements. This alone makes such securities unlawful. Frequently, they are sold through misrepresentations and omissions, adding another layer of fraud.

  • We have seen such sale-leaseback “investment opportunities” associated with investments in:
    Real estate
    Timeshares
    Payphones
    Internet kiosks
    Car leases
    ATM machines
    Etc.

Basically, anything that generates money and could be sold to an investor, then taken over to be managed, could be used for a fraudulent sale-leaseback arrangement.

Given that such arrangements do not appear, on their face, to be investment products, investors may not even be aware they are investing in a security.

Investors should be extremely cautious when approached by promoters who offer to sell them such “investment opportunities.” Given their likely lack of registration, those opportunities would be unlawful by definition, in addition to any other misrepresentations and omissions (such as omissions regarding the lack of registration with the regulators).

If you believe you may have lost money in a sale-leaseback investment, please contact us for a free, no-obligation consultation regarding your legal situation and potential recovery options, by  phone at 888-998- 0530, via email at arosca@roscalaw.com, or through the contact form on this page.