Thanks to the 2008 foreclosure crisis, a Kuwaiti ponzi schemer was able to single-handedly blight cities across America

After the 2008 economic crash and the ensuing foreclosure crisis, AbdulAziz HouHou ran a ponzi scheme that bilked other Kuwaitis out of millions that were spent buying and flipping foreclosed houses across America, particularly in hard-hit rustbelt towns like Buffalo and Rochester.

HouHou -- now serving a 10-year prison sentence in Kuwait -- lured in investors with promises of worry-free, 15% returns on their money, which he said he would spend buying up distressed properties and then renting out to desperate people who would tolerate minimal maintenance while paying high rents.

Apparently that didn't work out -- or perhaps HouHou never intended it to work out -- and instead, HouHou bought houses and left them vacant, boarded up, not paying taxes on them. Sometimes he sold the same house to multiple investors. Sometimes he didn't even own the houses he was selling.

The scam went on for years, thanks to HouHou's ponzi tactic of paying existing investors out of the money coming in from new ones, guaranteeing a sterling reputation in Kuwait.

Even before the scam was revealed, cities were suffering as a result of HouHou's fraud. He didn't pay property taxes, and his empty houses sometimes burned down, or attracted squatters, or simply rotted away, lowering the value of peoples' nearby homes. Since HouHou was busted, some of America's poorest, most cash-strapped cities have had to spend tax dollars razing them, or dousing their fires, or rousting squatters. The houses themselves are often sold for pennies on the dollar, and many are uninhabitable thanks to neglect, which leads to catastrophes like frozen and burst pipes. Read the rest