"Looks like a lien has just been placed on your property."

It was Wednesday, June 12, 2024, when I read these fateful words. My real estate agent had just discovered it while doing some research on my house.

(I would have found it myself that weekend during my regular property status check. If you own property in Panama, make sure to add this recurring task to your To-Do list so you don't miss any liens, squatting attempts, or other legal actions against your property. Click here for directions on how to do this!)

When I looked at the copy of the lien my agent had sent me, I saw that it had very little information — just the name of the "man" making the claim, the attorney representing him, the amount of the lien, my name, my property identification, and the (LUDICROUS) amount of the lien ($17,000 and change!!! 😳). I didn't know the "man" or the attorney.

There was a 0% chance that this was legitimate. Other than a couple of tiny projects or repairs, the only major construction on my property had been completed in September 2022.

(BTW...if you're going to be building in Panamá, you must read this blog post: "Building a House in Panamá")

So, the first person I messaged was my former construction project manager, who had overseen the build.

My adrenaline spiked when I read his response.

The person who had filed the claim was someone associated with my construction.

(I now vaguely remembered the guy. There were many workers coming and going over the 13-month construction period. I was living offsite, working full-time, and my efforts at learning Spanish had been a flop, so I hadn't been onsite much.)

My brain started going at Mach speed. What kind of story were they concocting? Were they going to forge some sort of proof and steal $17K+ from me? How was I going to defend myself? Was I going to have to take my house off the market???

The Conspiracy Comes to Light

I contacted the local attorney that most people in my area use. She had me check my construction contract for a clause that exonerated me from any responsibility for labor claims. Great news — it was there. 😅

But as my former project manager dug deeper, a much bigger and uglier picture began to emerge. This wasn't just about me. It was an organized conspiracy, and at least three other expats had been targeted with similarly fabricated claims.

Here's the story the mastermind had constructed:

He claimed that our residential properties were working fincas (AKA functioning farms) and that various plaintiffs had managed the operations, supervised employees, and were never properly compensated for their wages or given vacation time.

Let that sink in for a moment...

We had all owned small, vacant residential lots and had single family homes built on them. That's it. No fincas. No farm operations. No employees. The claims were pure fiction, filed with the labor court by someone counting on the system being complicated enough — and expensive enough — that we'd give up and pay.

When I learned that other expats had been hit with identical claims, my instinct was to bring us all together. These cases were carbon copies of each other — surely we were stronger as a group than as individuals fighting the same battle in isolation? We could pool our knowledge, share information, and strategize collectively.

I was able to track down one of the other victims and he told a very similar story — same circle of people, several former workers making the claims, similar dollar amounts. The scariest part? His lien had been filed about 10 months prior and was still active. He knew very little about his own case.

I was deeply disappointed by what happened next.

A few days after a very friendly and mutually supportive conversation — where we agreed to keep each other informed — I received a curt text from him stating that I was no longer to contact him directly. If I had questions or needed anything, I was only to speak with his attorney.

Said attorney was someone I personally knew in the (very) small town near us. Turns out she had instructed him not to speak with me. No collaboration. No information sharing. Nothing.

It didn't take long to understand why.

These local attorneys were charging a wad. I believe they had zero interest in solving the problem on a larger scale, because a solved problem stops generating fees. 

In a situation that called for solidarity, there was just another layer of the broken system. The very people positioned to help were quietly profiting from the chaos. It was infuriating and disheartening in equal measure.

I listened to my gut and contacted my attorney in the city to handle the case for me. There's a level of trust between us that I don't have with any other professional in Panamá. Plus, I knew her to be even feistier than me. 😬

After some online research, she found zero information regarding the basis of the lien and told me she'd have to come down to the labor court in person to get a copy of the lawsuit to find out what we were actually dealing with.

My real estate agent and I agreed — the house would need to be taken off the market while this mess was sorted out.

So, there it was. I was being scammed in Panama. And now the waiting began.

Fighting Back (And What It Actually Cost Me)

I hired my attorney and braced myself. Several thousand dollars and one full year later, the case was finally resolved. (This is totally the "Reader's Digest" version.)

Here's what made the whole thing even more maddening...

The plaintiff never once showed up. Not to his own attorney's office. Not to fulfill a single legal obligation to the court. His own attorney didn't appear to be part of the scheme — but the public prosecutor? My attorney strongly suspected otherwise.

Court hearings were scheduled. The plaintiff was a no-show. Hearings were rescheduled. Rinse and repeat, for months.

When a hearing finally happened — nearly a year after the original claim was filed — three men who had been associated with the construction of my house showed up as witnesses against me.

But here's where the story takes an unexpected turn.

I will never know for certain what changed their minds that day. What I do know is that I had always treated these men with respect and genuine appreciation for their work. When they saw me standing there in that courtroom, something seem to shift. My attorney told me after the hearing that their testimony ended up incriminating the mastermind and supporting my position.

The judge ruled in my favor — and went further than just closing my case. He wrote in his opinion that it was the responsibility of other judges to put a stop to this kind of scam.

I breathed a sigh of relief...for about five minutes.

The public prosecutor appealed. To protect a non-existent plaintiff. 

Several more months passed before a second court also ruled in my favor. It was finally, truly over.

What You Can Do to Protect Yourself

I've talked to a lot of people in the know since this happened, and here's the most important advice I can pass along.

Put your property in a FOUNDATION.

Attorneys told me this is the single most effective protection against this type of scam. And before you think "I'll just put it in a corporation" — don't count on that to save you. The victim I spoke to (before I was cut off) had his property in the name of their corporation. It didn't help him one bit.

Do serious, thorough research on every single contractor you hire.

Electricians, plumbers, builders — every one of them. You need solid evidence that they are reputable and have been for a long time. Outside of the city, this is actually relatively easy to establish — communities are smaller and word travels. In the city it's harder, but from what I've been told, this particular scam is also far less common there. It is especially prevalent in rural areas, and particularly (I heard)  in the Los Santos province.

The Harder Truth

I want to be honest with you, because that's the whole point of this blog.

More and more Panamá expats are being viewed as a financial resource — not just for honest wages earned, but as targets for scams. The kind of money that can be extracted through a fraudulent legal claim, a shady real estate deal, or a contractor connected to the wrong people.

This breaks my heart, because Panamá has so much genuine beauty and so many genuinely good people. But reality is reality, and I'd rather tell you the hard truth than let you walk in unprepared the way I did.

Be extremely cautious before investing in any real estate. Be extremely cautious before hiring any contractor. Do your homework in a way that might feel excessive — because in this context, it isn't.

I got through this. I'm grateful for the judge who saw through it, for the men who showed up and (I think) told the truth, and for my attorney who fought hard for me. But I wish I hadn't needed any of it.

I hope this saves at least one of you from the same experience. 💙 

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