Brooklyn Attorney Indicted for Real Estate Fraud in Connection With Eight Properties Valued at Nearly $8 Million
Scheme Targeted Homes in Foreclosure in Bedford-Stuyvesant, East New York
and Flatbush; Defendant Allegedly Collected Over $600,000 in Rent
Brooklyn District Attorney Eric Gonzalez today announced that a suspended Brooklyn attorney has been arraigned on an indictment in which he is charged with stealing the deeds to eight properties in foreclosure worth a total of $7.8 million by defrauding seven homeowners, most of whom believed he was negotiating a short sale on their behalf.
District Attorney Gonzalez said, “Brooklyn’s valuable real estate market continues to be an attractive target for fraudsters willing to deceive homeowners. These victims, who trusted the defendant to help them avoid foreclosure, instead allegedly had their homes stolen by him and were left facing financial ruin. I urge anyone considering selling their property to be prudent about with whom they do business. Be wary of any unsolicited offers of help with your property and do not sign any documents unless you consult with an independently retained attorney.”
The District Attorney identified the defendant as Sanford Solny, 63, of Midwood, Brooklyn. He was arraigned today before Brooklyn Supreme Court Justice Danny Chun on a 63-count indictment in which he is charged with second- and fourth-degree grand larceny, first-degree scheme to defraud, and first- and second-degree criminal possession of stolen property. He was released without bail and ordered to return to court on February 4, 2021.
The District Attorney said that, according to the investigation, between May 2012 and November 2020, the defendant, an attorney whose license to practice law was suspended in April 2012, allegedly engaged in a real estate fraud scheme to steal deeds to and economically benefit from eight residential properties in Brooklyn, targeting seven victims who owned properties that were in foreclosure.
It is alleged that various individuals, including unlicensed brokers, contacted the victims and referred them to the defendant to negotiate a short sale, i.e., selling the property to someone else under terms communicated to and approved by a lender. In exchange, the lender would then drop the foreclosure action and forgive the loan amount owed.
The defendant allegedly met most of the victims at his office in Borough Park where he either falsely told them that they were required to sign their deeds over to him for the defendant to begin a short sale negotiation on their behalf or had the victims sign documents that the defendant claimed were part of the short sale process but, unbeknownst to them, actually relinquished ownership of their property to the defendant.
The indictment charges the defendant with crimes involving the following one and two- family homes with a total current value of approximately $7.8 million:
• 53 Van Buren Street in Bedford-Stuyvesant
•163 Montauk Avenue in Cypress Hills
•2 Jardine Place in Ocean Hill
•161 East 29th Street in East Flatbush
•2555 Bedford Avenue in Flatbush
•406 East 21st Street in Flatbush
•729 Eldert Lane in East New York
•394 Monroe Street in Bedford-Stuyvesant
In most cases, the defendant allegedly paid the owner’s fee, ranging from $1,000 to $18,000, for transferring the property to him or to various corporations he controlled. In some cases, the defendant allegedly told the victims that the lenders preferred or, on at least one occasion, required that the homeowners vacate the property for the short sale to occur.
There is no record of the defendant attempting to negotiate a short sale with any of the lenders on the properties, despite the federal and state laws that require lenders to make a record of any short sales or attempts to negotiate a short sale for properties the lender is foreclosing on. In fact, on two of the properties, the defendant allegedly actively obstructed attempts by owners to sell their property without him.
Over the months and years that the defendant claimed to be in negotiations, when victims asked him about the negotiations, possible sales or when the foreclosure actions would end, he allegedly offered an array of excuses and explanations.
The defendant allegedly collected over $600,000 in rent from tenants he brought in or existing tenants at the eight properties the victims transferred to him. As record owner, if any of the properties were to be sold, the defendant would also benefit from the increase in value accrued over the last several years.
As a result of the defendant’s alleged fraudulent scheme, the victims lost their properties and rental income. In addition, their credit scores and ability to obtain new loans rapidly deteriorated as most of the foreclosures remain active.
The case was investigated by Detective Investigators assigned to the District Attorney’s Investigations Bureau. Supervising Financial Investigator Deborah Wey, of the District Attorney’s Investigations Division, assisted in the investigation.
The District Attorney thanked the New York City Department of Investigation, the New York City Department of Finance and the New York State Department of Financial Services for their assistance in the investigation.
The case is being prosecuted by Senior Assistant District Attorney Joseph DiBenedetto, of the District Attorney’s Frauds Bureau, under the supervision of Assistant District Attorney Gregory C. Pavlides, Chief of the Frauds Bureau, and Assistant District Attorney Michael Spanakos, Deputy Chief of the Investigations Division, and the overall supervision of Assistant District Attorney Patricia McNeill, Chief of the Investigations Division.