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Real Estate Fraud in Virtual Space?
Have you ever heard of Second Life? For the uninitiated, Second Life is an online subscription-based 3-D virtual world where registered users can explore, meet new people, participate in individual and group activities, and buy, build, and sell real estate (among other things). Second Life has its own economy and a currency called Linden Dollars (L$). Site users create new goods and services, and buy and sell them in the Second Life virtual world. There are also currency exchanges where residents can exchange U.S. dollars or other real world currencies for L$. These exchanges are open markets, except that San Francisco-based Linden Lab–the site’s creator–sometimes buys or sells L$ to attempt to keep the exchange rate relatively stable.
With over 2,000,000 registered users, Second Life is starting to attract a lot of attention, but not all of it is good.
The latest issue of The AvaStar (an online newspaper for Second Life users) reveals that a large scale real estate fraud scheme was recently uncovered, and a report due out this month from Deloitte will say the nascent economies that have developed inside internet-based games such as Second Life could be exploited by criminal gangs. According to The New Zealand Herald, the Deloitte report will warn that Second Life could tempt organized criminals, because players can trade virtual property and convert profits into real currency.
Just when you thought you knew all there was to know about real estate fraud, along comes virtual real estate fraud. Unbelievable!
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