Appraisal Institute’s New Book Helps
Real Estate Appraisers Detect, Prevent Fraud
CHICAGO (Oct. 12, 2011) – Real estate appraisers who are able to
detect fraud can avoid inaccurate information that could compromise the valuation
analysis, according to a new book from the nation’s largest professional association
of real estate appraisers.
Published this week by the Appraisal Institute, “Fraud Prevention for Commercial
Real Estate Valuation” describes common methods of deception used in fraudulent
schemes involving commercial properties and land. Author Vernon Martin, Certified
Fraud Examiner, writes that by thinking critically and challenging
assumptions, commercial appraisers can keep out of trouble, whether
it is trouble for themselves or for others who rely on their work. The book presents
various situations and conflicts of interest that have the potential to exploit
the appraisal process for dishonest purposes.
“Appraisers who are prepared to detect and prevent real estate fraud can protect
their businesses and their professional reputations,” Appraisal Institute President
Joseph C. Magdziarz, MAI, SRA, wrote in the book’s foreword. “The best way for real
estate professionals to deal with the problem of real estate fraud is to learn more
Suspicious Activity Report filings relating to commercial real estate fraud nearly
tripled between 2007 and 2010, according to the
Financial Crimes Enforcement Network’s “Advisory on Activities Potentially Related
to Commercial Real Estate Fraud” issued in March 2011. The U.S. Department
of the Treasury established FinCEN in 1990 to provide a government-wide, multi-source
financial intelligence and analysis network.
Of the filers who reported dollar amounts involved, the greatest concentration (45
percent), reported suspected fraud in transactions valued less than $1 million.
Nine percent of transactions were valued at $10 million or more. Approximately half
of the reports named subjects located in five states: Georgia, Illinois, Florida,
New York and California. The top four reported categories of commercial real estate
fraud were: false documents, misappropriation of funds, collusion-bank insider and
Vernon Martin, CFE, author of “Fraud Prevention for Commercial Real Estate Valuation,”
has been a practicing commercial real estate appraiser since 1984 and is currently
president of American Property Research — an advisory practice he founded in 2006
— in Los Angeles. He previously served as chief commercial appraiser at three national
lending institutions and as fraud solutions product manager at First American Real
Estate Solutions, now known as CoreLogic. He received his master’s of science degree
in real estate from Southern Methodist University and an undergraduate degree in
urban geography from the University of Chicago. He taught real estate valuation
at California State University, Los Angeles, from 1998 to 2005 and has published
numerous articles in professional journals, including The Appraisal Journal.
“Fraud Prevention for Commercial Real Estate Valuation” (ISBN: 978-1-935328-22-3)
is a 122-page soft cover book available for $45 ($35 for Appraisal Institute members)
or by calling 888-756-4624 between 8 a.m. and 7 p.m. EDT.
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The Appraisal Institute is a global membership association of professional real
estate appraisers, with more than 24,000 members and 91 chapters throughout the
world. Its mission is to advance professionalism and ethics, global standards, methodologies,
and practices through the professional development of property economics worldwide.
Organized in 1932, the Appraisal Institute advocates equal opportunity and nondiscrimination
in the appraisal profession and conducts its activities in accordance with applicable
federal, state and local laws. Members of the Appraisal Institute benefit from an
array of professional education and advocacy programs, and may hold the prestigious
MAI, SRPA and SRA designations. Learn more at
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