The LA Times looks at a housing scam. "At the height of the real estate boom last year, a group of investment promoters crisscrossed California, touting a plan to build rental duplexes in distant states. Mile High Capital Group's scheme generated so much interest that its executives said they were interested only in buyers who were willing to take a risk."

"And after investors handed over a $16,500 down payment for each duplex, Mile High founder Rick Dryer warned: 'It's no longer your money. It's our money.' That turned out to be all too true for hundreds of Mile High buyers, who fear they will never see the money again."

"The Denver company filed for bankruptcy protection last month and is all but defunct. It collected deposits on nearly 1,200 duplexes but finished building only 55 of them. Regulators say the company's files are in such disarray that it will be a long time before they know exactly what happened and who was responsible."

"As a hot housing market becomes tepid, economists and other observers warn that many of those who bought speculative properties could wind up losing a bundle, some because of the market downturn, others because of frauds coming undone. Mile High Capital stands as a vivid example of the latter."

"The 57-year-old Dryer, celebrated at Mile High's sales seminars as a millionaire home builder and author of a book on real estate investing, turned out to have a record of securities fraud stretching back a quarter of a century. His book didn't exist either, despite the fact that it was pictured on promotional materials at the seminars. McFaul joined Mile High in late 2004, a few weeks after he pleaded guilty to felony theft for stealing more than $10,000 of tools from the workers building his house."

"To thousands of investors who attended the Mile High seminars, the pitch was irresistible. Massoud Balbas, a Laguna Niguel computer consultant, went to three seminars last winter. He bought a duplex each time, one in Colorado, one in Texas, one in 'North Carolina or South Carolina or one of those places.' The 60-year-old's own fall was particularly hard: 'I was a brand-new investor. I thought I was doing the right thing, but it looks like I lost everything. My wife is mad at me.'"

"Those first few months of 2005 were a heady time, a moment when it seemed more important to buy real estate immediately, before it went up again, than to think too much about where the property was or how much it cost. Homeowners were refinancing and taking cash out at unprecedented levels. Several factors combined to make Balbas and the other investors so eager to surrender their money."

"First and most elemental was the siren song of real estate. The metaphors at the seminars may have been mixed; 'Our duplexes are appreciating like an avalanche and cash-flowing like a freight train,' a promotional film asserted, but the message was clear. 'If you don't have several million dollars' worth of real estate working for you by the time you retire, you're going to condemn yourself to a life of struggle,' Dryer said at a San Francisco seminar."

"Prospective buyers were advised that they should refinance their duplexes every year, taking money out to buy another. 'You're in the harvesting business,' Dryer said. 'You're harvesting money.'"

"Colorado Securities Commissioner Fred Joseph wasn't surprised that the scam revolved around real estate. It depends, he said, 'what the thing of the day is. It can be wireless cables , it can be oil and gas.' Investors can get fleeced when they latch onto the latest boom, he warned."

"Some of the fleeced refuse to be disillusioned. Silicon Valley jeweler Geoffrey Stern figures he's lost forever his down payment on two duplexes. 'I was so naive,' he said. 'I made an emotional decision, not a logical one.' His interest in real estate is unabated, however. He recently bought a share of a house in Los Altos Hills, Calif. The partnership is going to renovate the house and sell it. 'It's a calculated risk,' Stern acknowledged. 'But I feel really good about it.'"