Learn From My Mistake: A 1031 Exchange Gone Wrong.

[PeterWunsch]

I hope as many of you read the following and talk about it as possible. 1031 exchange fraud is costing investors millions! We need to stop this now!

Amid all the financial turmoil of the recent months, you may have missed a front page story in the Wall Street Journal about the scandal surrounding Vesta Strategies, one of several Section 1031 Qualified Intermediaries that has recently gone bust. In Vesta

[wexeter]

Hi Peter,

I wanted to clarify one point. You said

[quote=PeterWunsch;43208]A qualified intermediary (in case you don

[brenta]

Peter,

First off, thanks for the post. The 1031 industry is extremely important for companies in a lot of industries across the country (especially now, when investment cash is so hard to come by), and my firm has been concerned about abuses and fraud for some time. Those who behave irresponsibly hurt everyone, including those of us who do business the right way.

Wexeter has some good advice for those looking to execute a 1031 exchange, and I'd even elaborate on his comments a bit:

> make sure your QI is bonded and insured
> ask about where your funds will be held
> do they provide segregation of funds? There should be absolutely no comingling with the QI's operating account
> make sure your data is well secured
> FEA membership should be a basic requisite
> clients should try to identify a firm with a CES (Certified Exchange Specialist) designation on staff

We're convinced that the 1031 business needs reliable industry standards in order to safeguard our customers, and I'm working toward that end through a number of channels. Hopefully, within a few years, we'll get to the point where horror stories like yours are distant memories and nothing more.

In the meantime, thanks for taking the steps you outline above, and best of luck with 1031Vigilante.com. I'll add it to my list of things to watch.

Brent Abrahm
CEO
Accruit, LLC
Accruit.com