The eyes in the sky proved that these homes were literally too good to be true, authorities say.
Desarrolladora Homex, once one of Mexico's leading homebuilders, committed "massive fraud" by faking the construction and sale of 100,000 homes, according to an SEC complaint made public on Friday.
Authorities used high-resolution satellite images to uncover the scheme, which they say inflated Homex's sales by more than $3 billion over three years.
Homex booked revenue from a development in the Mexican state of Guanajuato, where it claimed that every home was built and sold by the end of 2011.
But satellite images taken in March 2012 showed that tens of thousands of those homes were "nothing but bare soil," according to the SEC.
Homex wronged investors by reporting numbers that were "almost completely made up," Stephanie Avakian, acting director of the SEC's enforcement division, said in a statement.
Without admitting or denying the allegations, Homex agreed to settle SEC accounting fraud charges. The settlement, filed in federal court in California, is subject to a judge's approval.
Homex didn't respond to a request for comment.
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It's highly unusual for the SEC to use satellite imagery to document accounting fraud. The agency declined to answer questions about whether this was a first or how exactly it detected the alleged fraud. But in a statement, it boasted about using "innovative investigative techniques" like satellites to crack the case.
Satellite images have become a new tool in recent years for hedge funds and other sophisticated investors to make investing decisions. For instance, images of empty parking lots on Black Friday can be a hint to investors that a major retailer is likely to report poor sales.
Even though Homex is based in Mexico, the SEC claimed jurisdiction because the company's stock had been listed both in Mexico and on the New York Stock Exchange.
In fact, the SEC said people and entities in the United States invested hundreds of millions of dollars in Homex, which traded under the ticker symbol HXM until it was delisted prior to going bankrupt in April 2014. Homex emerged from bankruptcy in October 2015 under new ownership.
Homex also sold $400 million of bonds to American investors in 2012, presumably using financial documents that the SEC now claims were cooked.
The SEC also issued a trading suspension on Friday in Homex shares, which had continued to trade in the United States on the so-called "pink sheet" over-the-counter markets.
