SEC Says Homex Faked the Building of 100K Homes Sinead Moore - Economia
go to original March 6, 2017

The SEC said these satellite images show how a development Homex claimed to have built and sold (right) was nothing but bare soil and empty lots (left) (CNN)

According to a complaint filed by the SEC, the homebuilding specialist, known as Desarrolladora Homex, inflated the number of homes sold during a three-year period by approximately 317% and overstated its revenue by 355%.

The SEC uncovered the accounting scheme using satellite imagery, which revealed that Homex had not even begun construction on many of the homes for which it reported revenues.

“We used high-resolution satellite imagery and other innovative investigative techniques to unearth that tens of thousands of purportedly built-and-sold homes were, in fact, nothing but bare soil,” Melissa Hodgman, associate director of the SEC’s enforcement division said.

In one instance Homex reported revenues from a project site in the Mexican state of Guanajuato where every planned home was purportedly built and sold by 31 December, 2011.

However, satellite images of the project site on 12 March, 2012, show it was still largely undeveloped and the vast majority of supposedly sold homes remained unbuilt.

Without admitting or denying the SEC’s allegations, Homex agreed to settle charges that it reported fake sales to boost revenues in its financial statements.

Read the rest at Economia

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