Tulum Real Estate Boom Devolves As Allegations of Fraud Surface

The pitch was perfect. In hindsight, perhaps too perfect.

A one-bedroom apartment with parota wood finishes and granite countertops, just a few minutes from the beach, starting at no more than $200,000. For extra, you’d get boho chic furnishings and decor and sinks carved out of stone. Amenities could include sprawling pools, fire pits, sunrise yoga classes, spas and private bike paths.

All of it in Tulum, a beach town along the turquoise waters of Mexico’s Yucatan peninsula.

“It’s beautiful, the people are wonderful, the environment’s amazing,” said Erin Norris, who works at a data development center in Austin, Texas. “I decided this is what I want to do. This is my dream home.”

Four years later, Norris’ dream home remains just that. A dream.

In 2021, she signed a contract to buy a one-bedroom, 1,500-square-foot condo from Akela Development Group for $191,000.

She still doesn’t have it, and she likely never will.

The development firm, for all intents and purposes, disappeared with the $107,000 she put toward the unit — pretty much all of her life savings.

A few months after her initial payment, one of the three partners at Akela was found dead on the beach. By October 2022, the company had told Norris to pause payments while the firm worked out a land dispute. A second Akela partner was found hanging from a rope in August 2024 amid mounting debt, according to a police report. The third is believed to have fled the country.

In time, Norris would find out that construction had never even started because Akela had allegedly stolen the land it said was theirs. The company was marketing six projects when it disappeared, encompassing 245 units. It only ever delivered one building with 30 units. Two other developments are sitting partially constructed.

The developer sold at least another 70 presale units — only to never deliver them, according to a conservative estimate by Bloomberg based on dozens of interviews with buyers, their attorneys and reviews of sales pitches and lawsuits.

Akela’s victims aren’t the only ones. Local attorneys say hundreds of other unsuspecting buyers are now caught up in what’s become the dark side of a real estate boom that took off during the Covid-19 pandemic.

At the time, Tulum was so untouched that bright green expanses of jungle spread for miles. That meant land was relatively cheap, not to mention there were few pandemic-related restrictions.

Visitors could lounge in the soft sand or visit ancient Mayan ruins in a lush tropical jungle. And the surrounding town had something for everyone: cafes for digital nomads, dayslong EDM festivals for jungle partygoers, and peace and quiet for snowbirds or retirees. So real estate developers hurried to build other-wordly homes for those who wanted to stay longer.

But Tulum’s real estate boom was so quick and so big that it became ripe for disaster. It attracted some serious builders, but it also became a playground for inexperienced companies that got in over their heads, and in some cases, were never able to follow through.

Over the past 10 months, Estrella Rios, a lawyer with a firm in the area, said she has been getting at least two calls a day from new clients who bought pre-construction apartments in Tulum during the pandemic and are now realizing their homes will never be delivered.

Most victims are middle-class foreigners, many of them hoping to use their nest eggs to buy relatively accessible second homes near the beach. Some planned to put their places up on short-term rental websites to help cover their mortgages, as developers often advertised.

Many have now spent tens of thousands of dollars on legal fees and trips down to Tulum to try to understand what happened. But parts of Tulum’s government are so archaic that it’s hard for anyone, let alone a foreigner who doesn’t speak Spanish, to understand how to go about lawsuits and processes that often have to be done in person. They’ve had no choice but to rely on local attorneys who charge them every step of the way.

In the end, they’ve lost all their money — in some cases their life savings — to builders who vanished.

“Maybe they didn’t set out to defraud people,” Rios said.

Still, some developers had no soil mechanics studies — crucial in this area known for its fragile ground. Others didn’t have adequate planning or construction permits. In some cases, they weren’t above stealing the land they sought to develop.

“But they did have super Instagrammable renderings that looked incredibly pretty and pulled in sales,” she said.

Many thought it was easy to sell apartments with a due date in the future and thought they could deliver, Rios said, before realizing the complicated web of local permits and even corruption that can make construction expensive and lengthy. That led many to run out of funds.

Eventually, they didn’t finish construction and some disappeared, she said.

“And that’s when it turns into fraud.”

As far as Mexican towns go, Tulum is relatively new.

It became its own municipality in 2008, and in the 2010s, hotels started springing up along the coast and further inland. Tulum’s infrastructure hasn’t kept up with the growing town of 47,000 people. It’s easy to spot shiny new developments sitting on unpaved roads.

Tulum gets its name from the Mayan word for wall or fence, and the ruins of the walled city — which predate the arrival of Christopher Columbus — are a popular tourist destination.

That’s what drew Tara Longwell to the area. Her son, who died in 2019, loved Mayan culture, and all she wanted was to feel close to him.

By 2021, she decided to purchase a second home there, with the hopes it would be a place for her and her family to heal and find peace.

Reports of investors falling prey to real estate scams and apparent frauds had already spread by the time Longwell was considering buying. She and her family own and manage properties in the US, so she felt confident that her experience and due diligence would have prepared her for buying in Tulum.

She researched Akela’s Solemn Skyview property online and learned that the developer had already delivered at least one other building in the area, Solemn Peaceful — a crucial fact that gave her and many other buyers peace of mind.

She visited the site and shortly after hired a law firm to handle the paperwork so she could buy a charming three-bedroom unit with a slide that would connect her upper floor to a pool below. She had paid $163,000 toward her $393,500 unit by May 2022 and was told it would be delivered about a year later.

“What actually drew me to investing with them was that they were going to build a home for impoverished families for each unit they sold,” Longwell said in an interview from her home in San Antonio, Texas. “That was all part of their marketing.”

A few months after signing the contract, her lawyer flagged some “irregularities” related to the land Skyview was being built on. It turned out that there was a lawsuit in the works alleging that Akela didn’t actually own the land.

The complaint was brought on by Liubov Prudkovskaya, a woman with Ukrainian roots who said she had owned the land since 2004. She visited the town two to three times a year. So she bought two lots totaling roughly 2.5 acres with plans to some day build a home and retire there.

With government offices closed due to the pandemic in 2020, she returned in 2021 to pay property taxes. That’s when she was told the taxes had already been paid by Akela, which she says had forged documents to claim her land as its own with the help of a corrupt network of notaries.

“I went into complete shock,” Prudkovskaya said in an interview in November. “The land was just stolen from me.”

She and her family have spent the past four years in court trying to get the plot back. The first lawyer she and her family hired suggested taking a payment from Akela in the form of apartments in their projects.

“That meant taking property of land that was most likely also stolen, it was completely illegal,” one of her sons, Emiliano Silva, said in an interview. The family is now on its third lawyer.

Prudkovskaya died in December, amid the yearslong dispute. Her sons hope everything that has happened with Akela might make it easier to get the land back — but that hasn’t been the case, at least not yet.

The plot currently sits untouched, right in the middle of sprawling development.

No one related to the development firm, which essentially no longer exists, or the now-deceased or missing founders responded to requests or could be reached for comment. Akela’s office in Playa del Carmen is now a medical spa. When Bloomberg visited in February, the receptionist was aware a real estate firm rented there before but had no further details.

Stolen land in the broader state of Quintana Roo has become a prevalent enough problem that a local reporter asked President Claudia Sheinbaum about it during one of her daily press conferences in early December.

“We’ve seen several cases of this kind of fraud for some time,” in the state, Sheinbaum said. Quintana Roo “has a lot of federal land from when it was a territory, before it was a state, and many developers took advantage to take over these federal lands to sell them illegally.”

She said she had asked Minister of Agrarian, Territorial and Urban Development Edna Vega to work with the state Governor Mara Lezama to look into the matter.

Sheinbaum’s office, Lezama, Vega and Tulum’s prosecutor’s office have not replied to multiple requests for comment.

Jesus Roberto Garza Garcia, born in the northern state of Tamaulipas, founded Akela in 2018. He had two other partners, Ruben Dario Aguilera Negron and Sergio Roberto Lopez Guzman, according to documents filed before the government of Playa del Carmen, a larger town close to Tulum.

In 2020, the company filed to change its administration. Aguilera and Lopez stepped down from their roles as secretary and treasurer, respectively, according to documents seen by Bloomberg, but remained active in the company. Garza’s son, Jose Roberto Garza Cano, became treasurer.

They had already delivered Solemn Peaceful, a 30-unit property, by the time some of the prospective buyers at its other developments visited in 2021. And they were seemingly communicative.

Every month, Shawnie Grant and the other investors at Solemn Lagoon would receive videos that showed how the construction was progressing.

Grant, who thought Tulum would be a good financial opportunity because of the sheer volume of visitors she saw while on vacation there, paid $159,000 toward a $191,000 two-bedroom penthouse in 2021. She said she was careful, especially after learning from another foreign investor to be on the lookout for developers building on stolen land.

“I decided to go through a real estate agency — a big firm,” Grant said. “I thought that I was getting two steps ahead of everything, crossing all of my Ts, dotting all of my Is.”

She also visited the site of Solemn Lagoon a few times and estimates that the last time she saw the site, the project was nearly halfway done.

After some delays, the property was due to be completed in March 2023. The development firm told Grant in February that everything was still on track. When she checked in around the due date, they told her the property wasn’t ready and that one of the developers had been found dead on the beach.

“For him to just say, ‘dead on the beach,’ I immediately had this bad feeling that it must have been some type of foul play,” Grant said.

In reality, Aguilera had turned up dead on the beach eight months earlier. After going missing for two days, his body was found on the morning of June 6, 2022, according to local media reports and a post on X from the prosecutor’s office.

In August 2024, Garza’s son found him at home hanging from a rope, according to a police report seen by Bloomberg that called the death a probable suicide. Garza Cano told police that his father had “economic problems because he had lost a great amount of money, so he had become depressed.” Garza Cano couldn’t be reached for comment through relatives or a phone number that belonged to him until recently.

At least two of the company’s victims say they heard through lawyers that the third partner, Lopez, fled Mexico. Multiple calls and messages to him went unanswered.

It’s unclear how and why Akela’s business model unraveled the way it did.

In at least two instances, the group allegedly stole the land in which they set out to develop. This was the case with Solemn Skyview, where both Norris and Longwell bought, and Lagoon, where Grant purchased.

The owner of the Solemn Lagoon land filed a lawsuit that he ended up dropping, according to Grant. She and other buyers believe he was paid off.

Swetank Gupta, a worker at a tech company living in Mexico, has found himself in a similar situation. He had paid about $155,000 toward a $182,000 studio unit in Akela’s Solemn Ocean by May 2023.

Akela sent Gupta emails with construction updates, just as it did with Grant. The last time he heard from the company was in August 2023, four months before the unit’s delayed delivery date.

“I sent my broker to the land and she took photos and nothing,” Gupta said. “It’s still pure land.”

When Bloomberg visited the site in February, a large orange sign in front stated the property is under litigation.

Nearby, Solemn Downtown stands nearly complete. A notice from the state prosecutor’s office hangs on the building’s side, stating that Akela is being investigated for fraud. The office didn’t respond to requests for comment.

Not too far away and some years earlier, Amir Neustdt was building a 50-unit project named Laguna Azul. Renderings show three-story buildings surrounding a lagoon-like pool with greenery all around.

Thirty-five people bought units at the development, mostly between 2018 and 2019. Back then, prices were even lower but the promise of paradise was starting to bubble up.

By the time Martha Cardona paid about $220,000 toward two apartments in 2019, the building was 80% built. With so little work left and only $40,000 left to pay, she felt confident her bet was a good one.

“That, of course, never happened,” Cardona said in an interview from Bogota, Colombia.

That same year, work stopped and Neustdt told buyers he had run out of money and took out a $1.6 million loan against the development. He said he would use the funds to complete construction.

When Neustdt defaulted a year later in May 2020, his creditor, Luis Felipe Alva Hernandez, took control of the construction and finished it. He rebranded the building to Xunic Tulum and re-sold the apartments. The 35 original buyers were left with nothing.

Eduardo, who withheld his last name in fear of retribution for speaking out, was one of those original Laguna Azul buyers. He says he personally visited the offices of the creditor, but was never allowed in. Over the phone, he offered to pay for the loan in an attempt to secure back the building for the original buyers, but Alva Hernandez never agreed.

Eduardo has brought claims against both the builder and the creditor, in criminal, administrative and commercial courts, all to no avail. A year after filing a lawsuit before a mercantile court in Playa del Carmen, the judge had ruled in favor of Eduardo. Before the sentencing, the judge retracted himself and said the court was not competent to take up the case.

The criminal and administrative lawsuits are ongoing.

Francisco Siman is a lawyer representing 17 investors in the Laguna Azul case. Over the past four to five years, he estimates he’s seen more than 100 clients with similar problems in Quintana Roo.

“Sometimes, the seller isn’t the owner of the land, or the property is mortgaged or doesn’t have the necessary permits,” Siman said. “Some developments were never finished, others were finished by committing fraud on the original buyers by selling them again two or three times.”

Walter Piñeiro, a lawyer for Xunic Tulum’s developer, said Neustdt never included the 35 presale buyers in the contract for the $1.6 million loan, meaning the creditor had no legal obligation to respect their previous deposits. So when Neustdt failed to repay, a judge granted full ownership of the project to Alva Hernandez.

Neustdt seemingly changed numbers and has been unreachable. Laguna Azul’s original buyers and their lawyers have been trying to find him for years now. He was active on Facebook as recently as July 2024. But his wife, Estrella Enriquez, is still fairly active. Her feed shows the couple frequently traveling across Europe. It appears they were in Dubai as recently as January.

Neither responded to requests for comment through Facebook messages.

“He cheated my client too,” Piñeiro said, adding they’ve been looking for Neustdt for years. “If you find him, please let us know.”

Investing in Tulum wasn’t uniformly devastating. Plenty of people who purchased pre-sale units did eventually take possession of those properties.

Juan Aura is one of those lucky ones. He purchased a 1,000-square-foot unit for about $127,000, and it was delivered in 2020 after a short pandemic-induced delay. Aura started renting it out almost immediately and charged about $250 per night through the end of 2021.

The unit was usually rented out for the better part of each month, giving Aura more than enough to cover his mortgage at the time, which amounted to about $375 per month.

Aura got his unit — but it didn’t pan out exactly as he had hoped. In 2022, the market took a dive. Crowds began to dwindle and supply outpaced demand, driving the promise of Tulum into the ground.

By the end of the year, Aura was renting the apartment out for just one or two nights a month at $50 per night — a fraction of what he once charged. In 2023, he wasn’t able to rent it out for a single night.

“In one year the entire business died,” said Aura. “The market became a joke.”

Still, he fared better than some others.

Buyers in both the Akela and Laguna Azul cases say they were blindsided by the developers. But nothing could have prepared them for the nightmare that followed and the many thousands of dollars they would spend trying to get something — anything — back.

In the aftermath of both cases, many buyers have connected with one another in WhatsApp group chats. They initially leaned on one another for support and to learn about what was happening. But over time they’ve become weary and skeptical.

Longwell says she left a group with about 30 members across all the Akela properties because she felt inundated with information. Grant left a group chat specifically for investors of Solemn Lagoon because she no longer believed she could trust the other members. She wondered if some of them had been paid off.

“It becomes kind of like crabs in a bucket,” Grant said. “We’re all in the same situation, but you’re pulling the next person down so you could possibly get a piece of the same pot before they do it or before the pot runs out.”

Some of the Akela buyers from the US have contacted the FBI in hopes they’ll get involved. They’ve also reached out to multiple local, state and federal agencies to no avail.

Most of them also feel they were let down again by shady lawyers who took their money but failed to help in any way.

After it became clear that she wasn’t going to get her unit, Grant began working with a lawyer to file a lawsuit only to learn from another investor that her lawyer used to work for one of the Akela developers years ago. She says she then asked her lawyer about the status of her lawsuit and found out it had never been filed. The lawyer said it was never filed because Mexican courts had been on strike.

Longwell found herself down $40,000 in legal fees and trips to Tulum in addition to what she had paid for the apartment and mired in a court battle with no end in sight.

Gupta, after spending close to $25,000 in lawyer fees and trips, says in his case, the land belonged to a third company and Akela was simply developing it. So he hopes there’s a way for him to get some money back eventually.

“Every six weeks I wonder if I should just let it go,” he said. “I’ve decided not to be frustrated except when I talk to my lawyer. That’s when I get frustrated all over again.”

Jose Luis Ruiz, a Mexican investor in Laguna Azul, hired lawyer after lawyer to try and get to the bottom of things only to feel that maybe he couldn’t trust his attorney to act in his best interest.

“The administration of law in Tulum is disgusting,” he said in an interview. “Lawyers are threatened, judges hide relevant information from them. We’re left in total helplessness.”

Just like in the Akela case, he says many buyers have left their group chat. For now, he’s still fighting, but understands those who have decided to let go.

“Some don’t want anything more to do with this situation. They want to have karma and God take care of it,” Ruiz said. “And I understand them, I really do. We’ve been knocking on doors for years and we’ve found nothing. It’s truly maddening.”

Norris, meanwhile, is at least trying to hold out hope.

“I do still one day want to live in Mexico. This hasn’t soured me on the country,” she said. “I know I’ll get there someday. It’s just going to take me a lot longer now.”