Not Victimless Crimes – Money Transmitting Scheme

 

FOR IMMEDIATE RELEASE
Thursday, November 21, 2019

U.S. Attorney Announces The Arrest Of 3 Individuals For Operating A $6 Million Unlicensed Money Transmitting Scheme

The Defendants Are Alleged To Have Operated a Money Transmitting Business for the Purpose of Transmitting $6 Million of Illegal Proceeds

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, William F. Sweeney Jr., Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and Carl E. Dubois, Sheriff of Orange County, announced the arrest today of CHASKEL LANDAU, ALTER LANDAU, and JOSEPH NEUMAN in connection with a multimillion-dollar scheme to operate an unlicensed money transmitting business for the purpose of transmitting proceeds derived from illegal activity.  The defendants are scheduled to appear before U.S. Magistrate Paul E. Davison in federal court later today.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “The defendants allegedly engaged in a brazen scheme to unlawfully transmit and conceal millions of dollars of proceeds that they believed to be derived from illegal activity.  They allegedly did so for personal profit and with the aim of avoiding law enforcement detection.  This Office is committed to rooting out such criminal activity.”

FBI Assistant Director William F. Sweeney Jr. said:  “Making money illegally is criminal in and of itself, but operating an unlicensed money remitting business, especially from outside of the United States, will almost certainly result in federal criminal charges.  Whenever someone needs to hide and move money, there’s a pretty good chance something’s afoot.  The FBI is committed to working with our law enforcement partners to ensure this type of behavior ceases to exist.”         

Sheriff Carl E. Dubois said:  “We continue to work closely with the FBI and our other federal partners, and the success of this long term investigation is proof of the benefits in these relationships.  Illegal financial systems pose a great risk to our residents and their financial institutions.  Law enforcement must continue work together to deter criminals from operating and engaging with organizations that allow them to evade banking regulations.”

According to allegations contained in the Complaint[1] unsealed today in Manhattan federal court:  

CHASKEL LANDAU, ALTER LANDAU, and JOSEPH NEUMAN were arrested following an FBI sting operation.  As alleged, from approximately in or about September 2014 to in or about August 2016, CHASKEL LANDAU, ALTER LANDAU, and JOSEPH NEUMAN engaged in a series of conversations and meetings with a confidential witness (the “CW”).  In order to induce the CW to invest approximately $6 million in property owned by CHASKEL LANDAU and his family, the defendants agreed to receive and transmit what they believed to be millions of dollars of funds that the CW had illegally obtained from his business.  The defendants agreed to conceal the source of the CW’s money by transmitting the CW’s money to third parties, with the expectation that it would be returned to the CW, in return for a 10% “fee.”

The scheme was two-pronged.  First, the defendants agreed to take cash from the CW, exchange the cash for checks written from real estate companies controlled by JOSEPH NEUMAN, and make the checks payable to a third party bank account purportedly controlled by the CW.   Second, the defendants agreed to use charitable organizations under their control to transmit the CW’s overseas money into the United States.  Over the course of the conspiracy, the defendants transmitted approximately $500,000 of what they believed to be stolen property, and agreed to transmit approximately $6 million total.

*                *                *

CHASKEL LANDAU, 45, ALTER LANDAU, 64, and JOSEPH NEUMAN, 78, are each charged with one count of conspiracy to operate an unlicensed money transmitting business and one count of operating an unlicensed money transmitting business, each of which carries a maximum term of five years in prison.  

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as the sentencing of the defendants will be determined by a judge.

Mr. Berman praised the work of the FBI, the Orange County Sherriff’s Department, the Orange County District Attorney’s Office, and the Internal Revenue Service, Criminal Investigation Division.

This case is being handled by the White Plains Division.  Assistant United States Attorneys Mathew Andrews and James McMahon are in charge of the prosecution.      

 


[1] As the introductory phrase signifies, the entirety of the texts of the Complaint and the descriptions of the Complaint set forth herein constitute only allegations and every fact described should be treated as an allegation.

Topic(s): 
Financial Fraud
Component(s): 
Press Release Number: 
19-391

Brookly, NY Real Estate Scheme, Predatory Lending and Short-Selling, Homeowner Beware!

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Five Guys Whose Brooklyn Real Estate Scheme Was Featured On “Million Dollar Listing New York” Just Got Arrested

The scheme, which centered on the neighborhood of Bedford-Stuyvesant, was first laid out in a BuzzFeed News investigation.

Five real estate investors whose business was the subject of a major BuzzFeed News investigation were arrested this week for allegedly defrauding lenders and taxpayers out of millions of dollars in a scheme that targeted New Yorkers at risk of foreclosure.

The US Attorney’s Office for the Eastern District of New York charged the men with conspiracy to commit wire fraud and bank fraud.

Two years ago, BuzzFeed News revealed how this group of investors turned properties on the brink of foreclosure into million-dollar listings sold on the reality TV show Million Dollar Listing New York.

Amid the lingering effects of the mortgage crisis, Iskyo “Isaac” Aronov and his four partners located homeowners in rapidly gentrifying neighborhoods who owed more than they could pay. The partners negotiated with banks to let the property go for far less than market rate, a process known as short selling. Then, with the original owners gone, the partners performed fast gut renovations, installing modern fixtures and marble counters, and resold the homes for north of a million dollars.

Prosecutors this week said Aronov and his team, which controlled every aspect of the short-selling process, traded on “false, misleading and incomplete” information, lying to the government and to lenders like Fannie Mae and Freddie Mac, failing to disclose unauthorized payments and their business relationships. BuzzFeed News linked the group to nearly 240 homes.

“As alleged, the defendants defrauded mortgage loan holders out of millions of dollars, with taxpayers saddled with much of the loss,” Richard P. Donoghue, United States attorney for the Eastern District of New York, announced.

In the process, the partners helped fuel the rapid gentrification of brownstone Brooklyn, displacing black and Latino families who in many cases had lived there for decades, and repopulating the area with young, mostly white professionals.

“What makes their alleged crimes even more egregious was their artificial devaluation of properties that, when resold or ‘flipped,’ resulted in large profits,” said Special Agent in Charge Christina Scaringi of the US Department of Housing and Urban Development’s Office of Inspector General, one of several agencies involved in the investigation. “Many of these homes were located in economically challenged areas of New York where affordable housing is at a premium.”

The indictment comes amid a larger crackdown on predatory real estate investment targeting New Yorkers who remain in foreclosure, dubbed an “epidemic of fraud” by an investigative grand jury last year. At least 20 people have been convicted in alleged scams. New York state also passed legislation this year meant to better protect homeowners who had been the target of predatory investment or fraud.

BuzzFeed News found at least 12 lawsuits in which borrowers said they had been deceived by the group.

In some cases, homeowners said the investors got them to sign over the deeds to their homes before the sales went through, claiming it was a normal part of the short-sale process. That gave the investors leverage to pay less, because no one else could buy the house — but this left some homeowners, like Denise Riera of the Bronx, on the hook for mortgages to homes they no longer owned.

Aronov appeared in court in Miami and his bond was set at $500,000, according to court papers. The four other men were arraigned in Brooklyn. Two of them also were released on bond, including Michael Herskowitz, a 40-year-old Brooklyn lawyer.

Since 2015, Herskowitz has been implicated in at least two other schemes targeting borrowers in foreclosure in Florida and Queens. He paid a $281,000 settlement in the Florida case and pleaded guilty to a disorderly conduct violation in the second.

Herskowitz’s attorney declined to comment for this story, citing the ongoing case. Neither Aronov’s attorney nor those for the three other defendants, Michael Konstantinovskiy, Tomer Dafna, and Avraham Tarshish, replied to requests for comment.

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De Blasio’s Donors Are Largely Big Money Interested Parties and their Law Firms, Where Will the Money Go, He Can’t Win.

Mayor Bill de Blasio speaks during an interview at Buzzfeed's Internet Live event at Webster Hall.

De Blasio begs for $1 donations to make September debates

New York City Mayor Bill de Blasio resorted to begging for $1 donations during an interview Friday in a desperate attempt to meet the 130,000 contributor threshold to qualify for the third Democratic presidential debates in September.

“I want to make an appeal to your listeners,” de Blasio said on the Laura Coates Show on Sirius XM.

“If you believe in things like a bill of rights for workers please help me. Donate at least $1 online at BilldeBlasio.com. Help me stay on that debate stage,” he pleaded.

On Tuesday the term-limited pol unveiled his Workers Bill of Rights — a part of his 2020 platform that includes raising the national minimum wage to $15 and providing two paid vacation time.

De Blasio has just a few weeks to qualify for the September 12 and 13 debates in Houston. Candidates must attract 130,000 individual supporters and poll at 2 percent. De Blasio hit the 2 percent mark for the first time in a July 2019 Quinnipiac University poll.

As of July 1 he only had 6,700 unique donors. A campaign spokeswoman said she could not provide updated information.

At least seven contenders have met the requirements.

To continue reading click here.

 

ADDITIONAL READING:

The Washington Free Beacon

De Blasio Rakes in Cash From Donors With City Interests

New York Post:

De Blasio presidential campaign raises just $1.1M for 2020 bid

Actor Steve Buscemi among de Blasio’s top 2020 donors

Pete Buttigieg has raised more money from NYC residents than de Blasio got nationwide

 

WBBM NewsRadio

De Blasio Struggles to Gain Momentum Heading Into 2nd Round of Debates

 

 

Brooklyn Properties in Bankruptcy, Fraud and a Madoff-Style Property Ponzi Scheme – Clever Fraudsters

Clockwise from left: 119 Rogers Avenue, 325 Franklin Avenue, 53-55 Stanhope Street and 73 Empire Boulevard (Credit: Google Maps)

Clockwise from left: 119 Rogers Avenue, 325 Franklin Avenue, 53-55 Stanhope Street and 73 Empire Boulevard (Credit: Google Maps)

Amid fraud case, a bevy of Brooklyn properties end up in bankruptcy court

Nearly 20 limited liability companies for individual multifamily buildings that are linked to a federal fraud complaint are now bankrupt.

The filings late last month in a U.S. bankruptcy court in White Plains also relate to over a dozen foreclosure cases initiated by an affiliate of Maverick Real Estate Partners, which in court filings is seeking information on the identity of the owner behind the low-rise, residential properties, all of which are scattered throughout Brooklyn.

In April 2017, Israeli investors Jacob and Binyomin Schonberg, Binyomin Halpern and Raphael Barouch Elkaim alleged in a complaint filed in federal court in Brooklyn that Yechezkel Strulovich and Yechiel Oberlander defrauded them out of more than $20 millionin a scheme carried out “in the style of Bernie Madoff.”

Eleven properties that are now in Chapter 11 proceedings — located predominantly in the neighborhoods surrounding Williamsburg and Crown Heights — were also named as defendants in the fraud case against Strulovich and Oberlander. That case, which a judge dismissed in part and sent to arbitration in 2017, included more than 40 defendants, mostly LLCs that have not filed for bankruptcy.

GC Realty Advisors' David Goldwasser (Credit: LinkedIn)

The LLCs that are bankrupt and own the underlying Brooklyn properties all list David Goldwasser of GC Realty Advisors as their authorized signatory, according to court filings. GC Realty is described as a commercial real estate advisory firm, per its LinkedIn page, which notes that it is based in Boca Raton, Florida, and has offices in New York. The state’s Division of Corporations shows that GC Realty has an address in East Midwood, Brooklyn.

Goldwasser is also listed as a principal at FIA Capital Partners, which is also based out of Florida and New York, according to his apparent LinkedIn profile.

A message left with FIA was not returned by the time of this story. The firm specializes in acquiring distressed properties and portfolios, according to its website.

Questions over control

The series of bankruptcies filed in White Plains starting on May 20 show that all of the properties, which number at least 18, are also affiliated with 73 Empire Development LLC. The latter owns the ground lease on a roughly 30,000-square-foot development site — it’s currently a vacant one-story retail building — at 73 Empire Boulevard in Crown Heights.

Empire Development, which is one of the defendants in the fraud case against Strulovich and Oberlander, also filed for bankruptcy in February. The debtor’s plan, according to court records in White Plains, is to build a 58,000-square-foot, two-story retail property at 73 Empire Boulevard.

Maverick's David Aviram (Credit: LinkedIn)

But the connection between Goldwasser’s GC Realty, Empire Development and the 18 other bankrupt properties is not yet clear. Maverick, the debt fund led by David Aviram that buys distressed mortgages, wants some clarity on the matter.

A recent filing from the debtors claims that one of Maverick’s affiliates, Brooklyn Lender LLC, took on 13 notes and mortgages — totaling $36 million — on 26 properties that originated with Signature Bank. As a result of the Chapter 11 filings, Maverick wants a judge to allow a full examination into who controls the various debtors, pointing to Goldwasser’s name in court documents.

“To Brooklyn Lender’s knowledge, Goldwasser was not previously involved with the Debtors, and understanding his new role and responsibilities with respect to these Bankruptcy Cases and the Debtors’ management is of paramount importance,” Maverick said in a recent filing.

Maverick noted that when the Signature Bank loans were made, Strulovich maintained that he was the 100 percent sole member of the debtor entities. In the fraud case, however, he admitted this was not the case. In October 2017, Maverick’s Brooklyn Lender filed 14 foreclosure cases against the now bankrupt properties, alleging that the loans were in default, in part due to misrepresentations by their owners.

The petition made by Maverick in bankruptcy court now asserts that a further examination is needed to determine who actually owns the Brooklyn properties, citing a guilty plea by Goldwasser to defrauding two banks in the early 2000s. Goldwasser was sentenced to 27 months in federal prison — Federal Bureau of Prisons records show he was released in September 2005 — and ordered to pay $2.8 million in restitution. A judge also ordered that Goldwasser “is not to be employed in any position requiring fiduciary responsibilities.”

All of the debtors in the bankruptcy cases, except Empire Development, have opposed the motion by Brooklyn Lender, claiming that its parent Maverick has an “unspoken agenda” and that they are working on a plan that includes paying back Maverick. Lists of unsecured creditors in the various bankruptcy cases show that Brooklyn Lender is owed between $2.7 million and nearly $5 million, while the New York-based law firm Abrams Fensterman is owed a little more than $150,000.

Mark Frankel, an attorney with New York’s Backenroth Frankel & Krinsky representing the debtors in bankruptcy proceedings, declined to comment, as did Maverick’s Aviram, which is being represented in bankruptcy court by Stroock & Stroock & Lavan. Strulovich and Oberlander could not be reached and their lawyers did not return requests for comment.

Unresolved fraud claims

In the fraud case against Strulovich and Oberlander, the defendants said that the money they received from the plaintiffs would be invested in Brooklyn properties that they would buy, develop and rent out, with returns on those investments coming in six to seven months. The plaintiffs also would receive 45 percent of the profits from the multifamily purchases.

But plaintiffs claimed that Strulovich, Oberlander and other defendants inflated the value of that real estate and used their money to acquire and develop properties for their own personal benefit, pay off personal debts and support their “lavish lifestyles,” according to the civil complaint filed two years ago. The Brooklyn sites purchased with their funds were “left to languish, undeveloped and dilapidated,” alleged the plaintiffs.

“The entire process was nothing more than an elaborate fraud to personally enrich the individual defendants,” said their lawsuit.

Court filings in that litigation claim that Oberlander allegedly approached the plaintiffs in early 2012 about investing in a project with him and Strulovich at 908 Bergen Street in Crown Heights. Oberlander sent prospectuses for 19 properties between 2012 and 2014 that were meant to entice the plaintiffs into make more investments, they asserted in the dispute.

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Suing for Silence – Rabbis who Report Sexual Abuse, Bloggers who Write About Fraud, Housing, etc. The Courts as a Weapon One Example [video]

 

To Our Readers:

We do not do the justice to the subjects within the community that FailedMessiah did. He was better at it. Had he not moved on, we would not have found our place on this crusade of sorts. We can only try to do our best.

LostMessiah, as is evident by the video above, is not the only entity to be sued for speaking out. We have no intention of being bought or being silenced.

We do need your help.  If you have not donated to the page and/or to the lawsuit, please do so. The link for the lawsuit is as follows:

https://www.gofundme.com/defending-free-speech-stopping-bullying

The Plaintiff had another victory at the hearing on May 8, 2019, leaving much of the Complaint and other documents sealed, in clear violation of the First Amendment. The articles in question were written in 2016, outside the Statute of Limitations, brokering no argument, except when you have the Kings County deck stacked against you.

The attorney never contacted us to take something down before instituting proceedings to unmask. That was not the purpose of hte Plaintiff.

Anyone who has ever contacted LostMessiah directly with a claim of any kind that we were wrong or erred or misquoted or used a photo we should not have, we have addressed the claim.

They have sued us because the Plaintiff’s wealth is endless and Kings County is a Satmar real estate mogul’s paradise. We ask that you please support us and our efforts. 

17 Properties, $173M Price Tag, $43-$200M Appraisals, Property Owners Controlling Process – Profiteering from Homelessness

Appraisers question process NYC used to value properties before shelling out $173 million to shady landlords

Appraisers question process NYC used to value properties before shelling out $173 million to shady landlords

Mayor de Blasio’s release of hundreds of pages of appraisal documents used in the city’s controversial $173 million purchase of 17 properties from two shady landlords has raised more questions than it has answered, appraisers who reviewed the records said.

The biggest irregularity, they said, is that BBG Inc., the appraiser hired by former owners Jay and Stuart Podolsky, submitted an unsigned, “restricted” draft estimate intended only for the client, not the buyer. But the buyer, the city in this case, received a copy of that appraisal.

“It’s inappropriate to use it, especially if you know someone other than the owner might have to rely on your report,” said Michael Vargas, president of the Vanderbilt Appraisal Company. He said the use of draft and “restricted” appraisals is frowned upon in the industry because it gives a client the ability to influence an appraisal.

“It’s a way for the client, the property owner, to control the process,” Vargas said. “It’s kind of like talking to the client and asking him, ‘Let me know if I should change the value to your liking.’”

Paula Konikoff, a lawyer and expert on appraisal standards, said the city should not have accepted an appraisal from the sellers without a signature because it carries little weight as an estimate. “Frankly, they should know better,” she said. “Why didn’t they bother to get the signed document?”

Eight appraisal estimates of the properties offered widely divergent assessments of their worth. One, conducted by the city Department of Housing Preservation and Development, set the total value at $49 million. Another, commissioned by the city Law Department and conducted by Metropolitan Valuation Services, estimated the value of the properties was $143 million. A third, conducted by the Podolsky firm of choice, BBG Inc., was done by appraiser Joel Leitner, who worked for BBG at the time and put the value at $200 million.

 

City Department of Finance tax records list the total value of the 17 properties at just over $40 million. City tax levies are based on that number. If the properties were worth millions more, as some of the appraisals suggest, it means the city may have taxed the owners too little for years. If the true value of the properties is around $49 million, as one appraisal suggested, the city paid far too much for them..

De Blasio spokeswoman Jaclyn Rothenberg said the broad difference exists because the “valuations prepared by our independent appraiser were based on different assumptions than those used by DOF to annually assess all real property in the city.”

“DOF follows state law in valuing property and its assessments are based on current use. The independent appraisers valued the properties for acquisition purposes,” she said.

Even Leitner described it as “unusual” for anyone but the client to have a copy of such a draft appraisal.

“If my client asked me to give it to the city, I would have said no because it’s unsigned,” Leitner told the Daily News. “That should not be affecting the sales price,” he said, referring to the unsigned appraisal.

The Podolskys have a history of real estate woes in New York City. In 1986, they pleaded guilty to more than two dozen felonies in connection with their real estate holdings in Manhattan. They also allegedly covered up extensive fraud involved in acquiring the properties they are now selling to the city, several sources have told The News.

 

Last month, the city said it had finalized the deal to buy the 17 properties in the Bronx and Brooklyn used to house the homeless for $173 million. The city plans to convert the “cluster-site” apartments to permanent affordable housing.

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Homelessness in NY, Real Estate Enterprises and Sweetheart Deals and The Money that Owns NY Politics

De Blasio and Cuomo are failures on homelessness, report says

De Blasio and Cuomo are failures on homelessness, report says

Homelessness in New York City is projected to increase by 5,000 people in 2022 — 7,500 more than Mayor de Blasio predicted when he outlined his plan to tackle the problem in 2017, a new report from the Coalition for the Homeless revealed.

The report — the findings of which the Daily News obtained Monday — projects the spike unless de Blasio “immediately changes course” by increasing the number of apartments set aside for the homeless by 30,000.The Coalition, which plans to release its report Tuesday, slammed both de Blasio and Gov. Cuomo, giving both failing grades in four categories.

De Blasio got an F for his inability to create more housing. Cuomo received failing grades for his performance on housing vouchers, homelessness prevention and cost-shifting practices that the Coalition claims hurt the city.

“The mayor currently has a completely inadequate plan to address homelessness,” Coalition policy director Giselle Routhier said.

[More Politics] New York Republicans unveil package of bills to counter Dems’ criminal justice reforms »

In the city’s 2017 Turning the Tide on Homelessness report, de Blasio administration officials predicted the shelter population would dip by 2,500 by 2022.

But according to Routhier and the Coalition, that isn’t happening unless the city creates more permanent affordable housing, more quickly. Routhier would like to see 24,000 new apartments created through new construction and 6,000 added through preservation efforts.

“With this simple change, the city can provide thousands of homeless men, women, and children with safe, clean, and stable homes,” she said.

[More Politics] Bogus claims of sexual assault allegations against Buttigieg were part of a failed plot by 2 known far-right activists »

De Blasio recently made a move to add more permanent affordable housing to the mix when it purchased 17 properties used as “cluster” site homeless shelters from notorious landlords Jay and Stuart Podolsky for $173 million. The two pleaded guilty to dozens of felonies in 1986 in relation to their Manhattan real estate holdings. They hired Frank Carone, a de Blasio donor and friend, to shepherd their most recent deal with the city to the finish line..

While technically adding permanent affordable housing to the market and potentially improving the lives of tenants, the units will house many of the same homeless people they housed when classified as shelters.

The Coalition did not spare Cuomo in its assessment either, taking him to task for not increasing the money it puts toward housing vouchers and failing to come up with a better plan to house people leaving prison.

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