Couple fears that investments are lost

November 24th, 2009, 1:00 pm · 26 Comments · posted by Jeff Collins

Helmut Lihs

Inge Lihs

Helmut and Inge Lihs of Palm Desert already had invested in five real estate funds created by Irvine-based Pacific Property Assets, and the interest checks arrived like clockwork.

So when they got a letter and prospectus offering to pay 12% to 15% returns — with payments doubled through June — they jumped at the chance.

“We thought, with these high interest rates, maybe we can recover what we lost in the market,” said Helmut Lihs, 71.

In March, they contributed more than $200,000 to the PPA Opportunity Fund, which was created to buy distressed commercial properties at bargain prices.

“We fell for it hook, line and sinker,” Lihs said.

An April 30 deadline was set to get double interest from the Opportunity Fund.

On May 4 — just days after the deadline — PPA announced that it would suspend about $500,000 in monthly interest payments to 674 investors holding about $90 million in notes.

Helmut and Inge Lihs so far have received “zero, zilch, nada” in interest. And Lihs worries that the principal may be lost, too.

In July, PPA filed Chapter 11 bankruptcy. Some investors question the timing of solicitations for the Opportunity Fund, although a company official said PPA had no idea it wouldn’t be able to make its payments when it was seeking cash from investors. He added that he hopes to recoup the value of PPA’s assets through bankruptcy reorganization.

But that will take time. Meanwhile, Helmut and Inge Lihs are down both in their stock market investments and PPA holdings.

“We got a double-whammy,” Lihs said. “It’s a nightmare to even understand.”

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Peter T` says:

November 24, 2009 at 1 pm

> 12% to 15% returns

High returns means high risk. Always. Otherwise, you wouldn’t get the offer. Before investing 200k, be diligent, very diligent.

seriously? says:

When things seem too good to be true, they usualy are.

PC says:

Is Inge Helmut’s Mom or did something else happen to her? He sure looks alot younger than 71!
What a pair of greedy geezers. This is what happens when the deal is too good to be true. INVESTOR BEWARE.

mikel says:

November 24, 2009 at 9 pm

An unnecessary and hurtful comment. Your family must be very proud of you.
- PC says:
  
  November 25, 2009 at 9 am
  
  What’s your problem?
  Truth hurt?
  By the way, last night your Mom told me to tell you that dinner is at 2 tomorrow.

Squeezeball Bum Rash says:

Yikes!!! Greed kills!!!

ocobserver says:

Looks like Helmut and Inge got taken to the cleaners. Too bad. But obviously red flags should have gone up as soon as they read the offer. Human greed has a way of thinning out the herd. Seems that folks with $200000 to invest should have known better. What a shame. Learn from their mistake.

Adam Brett says:

November 24, 2009 at 2 pm

While I feel for these people - let’s be rational….. When you see returns be in the double digits - you have to realize it is very high risk. Everyone is looking to get rich quick - and that just does not happen.

What happened to making sound investments with reasonable returns - which would weather any economic turn?

These people should have looked a little deeper and seen it was a ponzi scheme.

A word of advise - if the deal sounds to good to be true - IT IS!

jojo says:

wow the greed gets the best of the greedy!

lindav123 says:

November 24, 2009 at 4 pm

I guess that I’m just bitter but I’m living paycheck to paycheck, lucky to even still have a job and my 401k was cashed out years ago to pay off credit card bills. I’m 56 and will be working til the day I die. No stocks or bonds or pension in my future.
Sorry that you lost some of your money guys.

Jc says:

Oh well…when I go and play the rulette. If I lost in my bet. I don’t go back to the guy there to ask for my money back.

Besides having 12% or 15% returns. I quite sure that their investment was paid many times over.

bpsqwerty says:

November 24, 2009 at 5 pm

yep, that’s true. the bubble has to burst some time, just saying that they got their money back with interest in the past doesn’t really mean anything was “right” before, or suddenly went “wrong” after they put money into this new fund. it could have “all” been wrong “all” along. just like Madoff, just on a smaller scale and with some actual hard assets behind it rather than just Door A, B, C.

and that’s also why they say past results is no guarantee nor indication of future performance.

the $200,000 debacle aside, hasn’t everyone lost -some- money in this market? I know I’m still down quite a ways in most holdings.

SC2 says:

How does OCR find these people??? Vegas, baby….

The article says it all: So when they got a letter and prospectus offering to pay 12% to 15% returns — with payments doubled through June — “they jumped at the chance” - greedy, greedy, greedy - chasing 12%. Oh well, they got what’s comin to them. Why feel sorry for these people? They can obviously afford to lose some, or were dumb enough to invest most of what they had in this garbage b/c they were greedy.

shockg says:

November 24, 2009 at 5 pm

Way to pass judgement on people you know next to nothing about.
- SC2 says:
  
  November 25, 2009 at 8 am
  
  I am passing judgment on their particular decision based on the facts presented, which would be clear if you actually had the ability to comprehend. “Chasing” a mere 12% demonstrates the point. Oh well, live and learn, until you die.
  - shockg says:
    
    November 26, 2009 at 12 pm
    
    Karma will come around to a-holes like you that laugh at people that got duped. It doesn’t matter if you think it was their fault or not. I’m glad I don’t have to do business with you. You lack character.

Tex says:

November 24, 2009 at 6 pm

Judge Slams Indymac, Sets Aside Defendant’s $292,500 Mortgage
Erin Geiger Smith|Nov. 24, 2009
http://www.businessinsider.com/judge-slams-indymac-cancels-defendants-mortgage-2009-11
(A New York judge calls the bank’s behavior vexatious, unconscionable and wholly without good faith).
(excerpt): Inequitable. Unconscionable. Vexatious. Opprobrious.

ocavatar says:

Greedy is what greedy gets! There is a sucker born every minute. High interest returns guaranteed is a neon sign for fraud. These greedy people got what they asked for, high returns, but not for them!

Bill says:

Is that shockg and tracker?

Ted says:

November 24, 2009 at 7 pm

Given that the market interest rate is practicially zero, you’d think people would be leery of investments offering double-digit returns.

Didn’t they learn the first time around with Madoff and Pang?

Guess not…

taxpayer says:

November 24, 2009 at 9 pm

At least this couple have courage to show how greedy they are, while others not even say a word after losing money in Las Vegas, but you would hear them loud when they were winning. Ces’t la vie,

Lucifer'sFlowers says:

They’re obviously bad at investing.

Why would they want everyone to know that and what they look like?

If I see them, I’m going to put my hand over my years so they can’t give me bad advice.

Gunner says:

November 25, 2009 at 6 am

A sucker born every minute. Even though headlines like this get published all the time, greedy Americans still get swayed by the lure of unreasonable returns only to get cleaned-out. I wish I had the mentality to rip-off seniors, I would be rich!

SC2 says:

November 25, 2009 at 8 am

Maybe shockg should listen to Gunner.
- Gunner says:
  
  November 26, 2009 at 11 am
  
  I think it is a good idea if you have kids to teach them how to “persuade” people how to get rich by giving it to you. It happens everyday and it is happening right now, only we read about the rare and few cases where someone actually gets caught. Most people don’t get caught and get very rich this way.

Slice	Price	Ch.	Sold	Ch.
House	$500,000	+18%	1,833	+11%
Condo	$290,000	+7%	881	+22%
New	$617,500	+24%	171	-17%
All OC	$435,000	+10%	2,885	+12%

Orange County Register