€10M Deal Hid a Power of Attorney Trap

A foreign investor signed transaction documents for a €10M land purchase after being told one document would “protect the company.” The document instead granted broad power of attorney and sale-like authority, and the investor discovered the issue only 18 months later when the local lawyer stopped responding. The case highlights how over-reliance on a single adviser and lack of independent review can quietly transfer control.

Key findings

• A document presented as protective actually “functioned as a power of attorney combined with a sale authorization,” granting broader authority than the investor understood.
• The investment’s governance depended on “almost entirely on one professional relationship,” with no independent legal review and no secondary adviser receiving executed copies.
• The problem went undetected for “eighteen months,” until the investor reviewed the investment and the lawyer “stopped responding.”
• Once broad authority was delegated, “recovering control became considerably more difficult than acquiring the asset.”

Who’s being targeted

• Commonly targeted roles: Executives, Business owners/founders, Finance teams, Legal/Compliance, Investment/Corporate development.
• Affected industries: Investment management / asset management, Cross-border real estate investment, Professional services (legal, fiduciary).
• Attack channels: physical.
• Impersonated: Local counsel / trusted fiduciary (as the investor’s adviser).

Awareness takeaways

• Never sign authority-granting documents (power of attorney, sale authorization, signing authority) without independent review focused only on your interests.
• Avoid single points of failure: ensure executed documents and key reporting go to more than one trusted party.
• Treat delegated authority as something to monitor over time, not a one-time closing task.
• Assume relationships can change and design governance so control cannot be quietly concentrated elsewhere.

Red flags to watch for

• A document described as protective but it “granted far broader authority than he understood”
• No independent review before signing and no second adviser receives executed copies
• Single adviser controls preparation, explanation, custody of signed documents, and ongoing local communications