Defrauded in Thailand!
by Jason Armbrecht

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12 June 2008

There was nothing much to distinguish Tony Shaughnessy from the thousands of other new expatriate arrivals in Thailand. He had a middle-aged spread, a face lined from years of taking orders, frigid winters and all the regular indignities of modern urban society. Now Tony twisted and turned in the law firm’s chair, his face a mixture of fear, anguish and shame.  He related his story like a confession, haltingly, taking time to judge the reaction of his listener as he slowly filled in the sordid details.  He had a small retirement nest egg and was planning for a quiet life in his waning years with his new found partner.  He trusted his partner implicitly; they had drank together on many occasions and found they shared similar world views.  He thought they were good friends.  Based on his total confidence in their relationship, Tony had been transferring funds to his partner for his investment for a housing project by the beach.  Tony would have a place to retire and a return on his investment as a partner in the project. They even had a written for their Thailand business agreement.

Tony had to return to his country to close up his affairs and take care of several administrative and family matters prior to the big move to Thailand.  Tony began to suspect something was wrong when his emails went unanswered.  Then his partner’s mobile number was cancelled.  He asked mutual acquaintances, but his partner seemed to have disappeared.

Upon his return to Thailand, he began to realize the enormity of his miscalculations.  He had never actually checked the title deeds to the land, nor his partner’s credentials.  Now it had come to this, a visit to a law office specializing in Thailand breach of contract laws, and a confession:  “I think I have been scammed.”

Houses that ‘Love’ Built

For a few potential homebuyers, it is not just the developers who are trying to defraud them.  Thailand is seeing a growing number of middle-aged and elderly divorcees and widowers who come to Thailand looking to marry a younger Thai woman.  Under Thai law, foreigners are not allowed to purchase land in Thailand, so if these couples want to settle down and buy a house, the most convenient solution  is to put the house in the Thai spouse’s name.  The foreign buyer, may, naively not exercise his option to sign a 30-year lease nor consult with an attorney regarding other possible ways to protect his investment. One day, the man returns to the house to find that his wife has kicked him out and threatens to call the police if the man tries to enter.  In other instances, the woman may have family members threaten the man with violence if he tries to file a grievance with the local authorities.

Although these cases are not the norm, they are a fairly common scenario in law offices in Thailand, according to Joe Leeds, managing partner of Chaninat & Leeds:  “Usually about once a month we will get an inquiry from a distressed foreign client who has transferred millions of baht to a Thai partner for buying a home and then been abandoned.  Typically what you find is that the foreigner left all the business details to his Thai partner.  No title deeds were checked and no normal due diligence was ever done.  In most cases our firm can help, but we would prefer to assist in the beginning of a real estate deal, and structure it correctly rather than cleaning up a mess that has already occurred.”     

The defrauding of these love-struck foreigners  –  lovers taking their houses or draining them of their life’s savings before leaving them – and the attendant heartbreak and depression drives a number of these victims  to suicide (or to seek counsel from Thailand Lawyers).  The normal profile is that of an older white male, however, other victims have included foreign women and men (usually from Singapore and Japan) as well.  Jumping from buildings has become such a common form of suicide for foreign men in Pattaya, for instance, that one writer has dubbed them "The Lemmings of Pattaya."

For more on Defrauded in Thailand see Part 2: All That Glitters