Certitrust

The real estate market in the Dominican Republic, especially in high-demand areas such as Punta Cana, has been rocked by a series of allegations of real estate fraud and serious breaches of contract. This detailed analysis presents representative cases and highlights the structural risks that all buyers should be aware of.

Cases of Severe Contractual Breach Escalating to Criminal Fraud

A. Paceo Construction Company: The Westside Punta Cana Case

The case of Constructora Paceo and its Westside Punta Cana project is a prime example of how failure to fulfill an obligation to perform can lead to alleged criminal fraud. The seriousness lies in the retention of almost all of the buyers' money without delivery of the property.

Evidence and Scope of Victims: Purchasers such as Enercida Felix reported having completed payment of $142,800 USD between 2019 and 2021 for a property [5, 6]. However, when she checked on the work in 2023, the complainant found only a plot of land with “just a few blocks laid.” [5]. The company claimed that the work had been halted due to alleged non-payment, despite the investment made by the victim [6].
Litigation Status and Defense Tactics (SLAPP): The plaintiffs have demanded that the Public Prosecutor's Office request coercive measures against the executives of the Paceo Group, including its general manager, Joan Fernando González Contreras [5]. The Paceo Group's defense, meanwhile, has opted for an aggressive legal strategy, describing the accusations as “malicious” and “extortionate.” [5]. Furthermore, the notification to a complainant for alleged defamation after demanding the return of her money on social media illustrates a tactic known as SLAPP (Strategic Lawsuit Against Public Participation), which aims to intimidate and silence victims, diverting attention from the breach of contract. [5].

B. Blue Wave Group (Punta Cana): Judicial Delay and Personal Devastation

The Blue Wave Group in Punta Cana has been the subject of fraud allegations that have severely impacted those affected, who sacrificed years of savings in projects promoted for their high profitability in the tourism sector [3, 6].

Despite the seriousness of the testimonies, which in some cases have resulted in arrest warrants against individuals involved [3], The victims' legal teams attribute the judicial delay and frustration to the lack of coordination by the Public Prosecutor's Office due to the “different jurisdictions” involved [3].

Structured Fraud and Transnational Litigation: The Noval Case

A. Noval (Solea CanaRock) and Business Simulation

The Noval case, associated with projects such as Solea CanaRock and promoted by Novasco Real Estate SRL, represents a more sophisticated form of real estate fraud, focused on simulation and coercive renegotiation.

Mechanism of Fraud: Novasco Real Estate SRL was accused of pretending to be a high-quality construction company [7]. Buyers, even those who made extraordinary contributions to their payments, such as Andrés Vargas [4], were surprised when the developer attempted to cancel the original contract and impose a new one with price increases. This action constitutes an abuse of contractual position to force the transfer of rights. [4].
Filter Recommendation: The simulation of business solidity is an underestimated risk [7]. Citizens are advised to go beyond verifying credentials and consult the actual track record, operating capital, and historical reputation. Financial institutions and banks are the most reliable filter, as their due diligence prior to financing guarantees the seriousness of the project and the promoter [7].
Global Impact: The magnitude of the Noval fraud transcended borders, generating protests by those affected in the United States and highlighting the need for cooperation between the New York District Attorney's Office and the Dominican Republic Attorney General's Office, seriously affecting the diaspora that invests in the country [8].

Structural Risk: Securities Seized by the DGII

Beyond specific cases, there is a critical structural risk affecting bona fide purchasers: the threat of “seized titles” by the Internal Revenue Service (DGII).

The Tax-Real Estate Link: When a developer receives pre-sale investment and does not pay the associated taxes (ITBIS and ISR), they are committing tax fraud. The DGII may initiate criminal proceedings and execute preventive or executive seizures on the assets in the name of the debtor company (the land and the construction) [1, 2].
Impact on the Purchaser: If the developer collapses or is investigated before the condominium titles are segregated and transferred individually, the buyer who paid the full price finds that their unit is legally part of the seized assets. The Tax Law gives the State preference in the collection of these debts over other creditors (including buyers), which makes the developer's tax default a direct cause of loss of title or extreme legal complications for the investor. [1, 2].

Targeted Cases: Irregularities and Additional Risks

A. The Procedural Precedent of the Silver Tower (The Chiefdoms)

The case of engineer Ramón Méndez Ciccone, in the controversy over the alleged illegal construction of the Torre De Plata in Los Cacicazgos, highlights the importance of judicial proceedings [9].

The Technicality Discharge: The acquittal of the defendants in 2009 was not based on the substantive legality of the construction, but on a procedural technicality: the Public Prosecutor's Office had withdrawn the charges against the company [9]. This decision prioritized procedural management over the right of citizens to seek the demolition of a structure considered illegal, leaving doubts about its legality despite the acquittal of the builders [9].

B. Security vs. Real Estate Fraud: Torre Prisma in La Esperilla

The Prisma Tower in La Esperilla, although not related to a real estate fraud scandal (title or contractual), highlights a different risk affecting high-end investment: security [10, 11, 12, 13]. Media reports have focused on assaults and robberies in exclusive towers in the sector. While not a legal fraud against property, the security risk directly impacts livability, condominium management, and, therefore, the valuation and profitability of luxury real estate.

Certitrust: Your Real Estate Protection Shield

In direct response to investor vulnerability, Certitrust offers a specialized real estate protection service designed for the Dominican Republic.

Certitrust not only performs standard legal due diligence, but also establishes control and monitoring mechanisms that protect your investment from pre-sale to title acquisition.

If you are thinking of investing in Punta Cana, the National District, or any other area of the country, don't leave your assets exposed to aggressive legal tactics, breaches, or tax debts on the part of the developer. Certitrust is the solution you need to secure your capital and have peace of mind that your investment is protected.

Contact us today and secure your future in the Dominican Republic with maximum legal protection!

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References (Sources of Information):

[1] DGII initiates criminal proceedings against Consorcio Tecno Deah for fraud amounting to RD$4.747 billion.

[2] Two businessmen accused of fraud against DGII sent to prison

[3] Testimonies and complaints from victims of the Blue Wave Group, including judicial delays due to “different jurisdictions” and arrest warrants.

[4] Testimonials from buyers of Noval/Novasco Real Estate SRL, such as Andrés Vargas, regarding extraordinary payments and the coercive renegotiation of contracts.

[5] Information about the plaintiffs, the request for coercive measures against executives of Constructora Paceo (Joan Fernando González Contreras), and the defense's tactic of labeling the accusations as “malicious” and filing a defamation suit (SLAPP).

[6] Report by Enercida Félix on the completed payment ($142,800 USD) and the status of the work (just blocks) on the Westside Punta Cana project.

[7] Information about Novasco Real Estate SRL, the pretense of being a high-quality construction company, the recommendation of banks as a reliable filter, and the investigation by the Public Prosecutor's Office.

[8] Statement from Indisar, owner of Noval properties, regarding contract compliance, refunds, and the transnational implications of the fraud with the New York District Attorney's Office.

[9] Details of the Ramón Méndez Ciccone/Torre De Plata case, including Judge Evelyn Torres' decision, the procedural technicality of the Public Prosecutor's Office withdrawing the charges, and the defense's response.