Unsavory real estate companies are accused of hiding behind shell companies to trick people out of their homes, the New York Times reported. The paper's extensive piece profiled several homeowners who said great promises were made, but never delivered upon and, in the end, the homes were no longer their own. In one case, homeowners said they were promised refinancing of their back mortgage payments only to learn that they had simply signed over their home, for free. In another case, a woman was left essentially homeless, residing in an illegally converted garage with no heat.
Once a fraud is realized, finding the culprits is often a challenge. This is because some of these companies hide behind LLCs, or limited liability companies. In many jurisdictions, being an LLC means you don't have to disclose who you actually are (unlike regular corporations). Sometimes, the address of the alleged swindler turned out to be a box at a print and mail center. The lesson, of course, is that if an offer seems too good to be true, it probably is.
The Times also found that, sometimes, the alleged fraud went beyond trusting homeowners being taken advantage of. Some cases involve outright forgery.
The report said that state legislation is being sponsored by Mayor Bill de Blasio, new disclosure requirements have been put in place by city Finance Commissioner Jacques Jiha, and prosecutions have been undertaken by U.S. Attorney Preet Bharara. Additionally, State Attorney General Eric Schneiderman and Brooklyn Borough President Eric Adams held a forum in October to warn property owners about these schemes.