https://needtoknow.news/2025/09/property-tax-school-district-bond-fraud-scam-of-biblical-proportions
Massive Property Tax Fraud Exposed – $5.1 Trillion Bond Scam Will Crash System
September 1, 2025 Daniela Cambone
Mitch Vexler is a real estate developer and whistleblower who alleges school district appraisers are inflating property values to jack up taxes. He said that in 2018 to 2019, there was a 30% jump in property taxes, but inflation was only 2.7%. After 5 years of compound cumulative fraud, real estate was over-valued. Based only on the face value of the bonds, he estimated that the fraudulent portion of the face value is somewhere around $5.1 trillion. He said that is an extremely conservative estimate, and it is likely closer to $17 trillion.
The market did not cause the over-valuation of real estate, it was due to fraud at the hands of the school districts.
The culprits are the chief appraisers in school districts, school superintendents, and others who committed accounting fraud and bond fraud. Underwriters of the bonds and the banks are involved – the underwriters that sold fraudulent bonds are culpable because they didn’t do their due diligence.
Property taxes are being used not to pay for school bonds, but to pay the interest only on past bonds, nevermind new bonds. He warned that property tax cannot cover bond payments and something must be done, otherwise, the American economy is set to collapse. If balance sheets are not restored, home equity will be stripped and the US economy will be ruined.
Vexler noted that schools are responsible for 83% of all the bonds raised off of property taxes on average.
Vexler said that property tax violates the US Constitution with regard to the First, Fifth, and Fourteenth Amendments (due process). He said that the Sixteenth Amendment states that only income can be taxed, not property as it is an unrealized gain. Appraisals use market value assessments that are unrealized gains.
He explained that bonds are being raised today to pay for bonds that were put in place 10 years ago. The only way to cover the interest on the outstanding principle and the outstanding interest is to raise more bonds. That is the definition of a Ponzi scheme.
The payments can never be met, so he filed complaints with the SEC, FBI and DOJ.
Vexler said that the SEC is on the case and the FBI has been notified. The culprits could be prosecuted for postal service for mail fraud and fraudulent billing. Every account and every envelope that was sent out with fraudulent overvaluation and fraudulent billing could cost the criminals $2,000 per envelope and four years in jail per envelope.
School districts have got money coming direct from mom and pop at their local school district level, they get money from the state general funds, and from the federal government through income taxes.
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Vexler revealed the cycle of fraud: The school districts claim they need money and the school district superintendent commits accounting fraud. They lie both to the state which goes to the state controller and they give a predetermined budget based on their needs, which is accounting fraud, to the chief appraisers at the school districts. The chief appraisers in the school districts are in fact controlled by and owned by the school district. He called the school board criminals a ‘cacophony of morons’.
He said that criminal complaints have been filed and recommended the repeal of real estate property tax in favor of a uniform sales tax.
If the Federal Reserve prints the money to pay it, then we have devaluation of the US dollar, similar to the Weimar Republic. If it is rescued, it will be worse. The balance sheet must be restored. If balance sheets are not restored, home equity will be stripped and the US economy will be ruined.
He said that across the US, 42 million homes are at risk – roughly 37.8% of the household population, of going bankrupt or losing the roof over their head. The money to pay the bonds does not exist. You cannot get blood out of a stone.
Canada is in worse shape than the United States.
He said you can find out how much each household in your area owes by finding how much the outstanding bond debt the school district has, and then divide it by the number of houses in the district.
He warned that many banks are poised to fail as 600 out of the 4,700 banks in the United States may not exist very shortly.
Categories: Community Activism, Real Estate Taxes