Yeah, the scam is to inflate the value of your properties, then claim a write-off when it fails. For "some reason" you can even use other people's money for the investments and claim the losses for yourself. Then you can use that as a deduction when you actually make money again. One scammer in particular pulled this trick for 10 years, rolling it forward and filing a $916 million loss with the IRS in 1995.
https://www.nytimes.com/interactive/2019/05/07/us/politics/d...