September 26, 2022

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He Operates a New York Real Estate Empire. Did He Steal It?

12 min read

About the previous dozen yrs, Sanford Solny has designed a New York authentic estate empire, snatching up tiny household properties throughout the city that churn out hundreds of thousands of dollars in lease.

His portfolio would be enviable but for 1 matter — a great deal of it, prosecutors and home owners contend, was stolen. In criminal rates and lawsuits, they have accused him of fraud: providing to enable householders struggling with foreclosures by arranging to fork out off their home loans, though basically tricking them into signing about their structures at deal-basement costs. In just about every circumstance, the property finance loan was by no means paid, leaving the home-owner with no property but a pile of financial debt.

The exercise is recognised as deed theft, and as town and condition officials promised to crack down on it, they homed in on Mr. Solny. The Brooklyn district legal professional, whose workplace has billed him with having the houses of 7 households, referred to as his behavior “despicable.” In Queens, prosecutors accused Mr. Solny and his associates of cheating 10 people out of their homes. The court docket appointed a watch to scrutinize his transactions.

But an assessment by The New York Periods has found that not only is Mr. Solny continue to profiting from buildings less than dispute, metropolis agencies are contributing to his earnings by subsidizing the hire at some of his houses.

His scenario exemplifies the sluggish and stumbling battle in opposition to deed theft, which generally targets immigrants and Black and Latino householders. Regardless of repeated pledges from the New York State attorney common and legislature to curtail the fraud, only a modest portion of hundreds of complaints are ever prosecuted. Homeowners, stripped of their most important asset, are left to have interaction in a lengthy and high priced combat to try to reclaim their qualities in civil court.

A shut critique of Mr. Solny’s holdings and transactions — drawing on housing court circumstances, lawsuits, city house documents and interviews — reveals a extensive document of questionable dealings and a largely ineffective federal government reaction. In excess of additional than a ten years, Mr. Solny and firms connected to him took ownership of at least 140 houses, The Periods observed. The previous house owners of 40 of individuals structures — which include a coveted brownstone in gentrifying Bedford-Stuyvesant, Brooklyn, a three-tale condominium setting up near Rockaway Beach and a suburban Craftsman-model household with a garden in Rosedale, Queens — have claimed they were being victims of deed theft, civil and criminal court docket records present.

Even while Mr. Solny was underneath the eye of the keep an eye on, a company controlled by him paid out a Brooklyn girl $5,000 for a household worthy of about 100 situations that significantly and still left her spouse and children with the credit card debt, according to the lady and city property documents.

As a result of a world wide web of shell businesses, Mr. Solny still owns 19 houses whose owners he has been accused of defrauding, and he collects lease from tenants he installed in many of them, according to court filings, metropolis records and interviews. As felony rates in opposition to Mr. Solny have piled up, town agencies have compensated the rent of tenants at some of all those houses by means of reasonably priced-housing vouchers, The Times located.

“How does the process operate for him and not for us?” reported Janet Bruce, a retired property wellbeing aide from Guyana who mentioned in court filings that Mr. Solny walked into her dwelling in Flatbush, Brooklyn, in 2014 with a stack of paper and a promise to rescue her and her spouse from foreclosures. He gave the pair $14,000 but never ever compensated off their property finance loan, she explained.

He walked out as the proprietor of a creating now really worth about $900,000, reported Ms. Bruce, 69, who has sued Mr. Solny. The transaction is also section of the criminal situation in Brooklyn.

From July 2014 by February of this year, there ended up much more than 3,350 problems of deed theft in New York City, virtually fifty percent of which ended up in Brooklyn, in accordance to the metropolis Department of Finance. The Brooklyn district attorney’s office introduced charges in 27 conditions of deed theft due to the fact 2014, according to a Times assessment.

“It just can make you question how seriously we, as a society, and our criminal justice program, consider white-collar crime that basically victimizes folks,” mentioned Oda Friedheim, a supervising attorney at the Lawful Assist Society who offers with residence fraud.

A law firm for Mr. Solny declined to solution precise concerns from The Moments, citing the open up prison circumstance in Brooklyn.

“The point that these shoppers would reduce their households experienced been a foregone summary extensive ahead of they ever fulfilled Mr. Solny,” the law firm, Michael Farkas, said in a statement. “When they sought his guidance with taking care of that regrettable and complicated actuality, these purchasers executed documents that clearly conveyed their qualities to Mr. Solny.”

Deed fraud problems in New York Town have fallen from a peak of 665 in 2015 to 154 last calendar year. But those people figures mask what could be a looming surge now that protections against foreclosure that had been set in place throughout the pandemic have expired.

“You have a very higher variety of property owners that are in distress, and true estate in New York has under no circumstances been additional beneficial,” said Ivy Perez, the senior policy and research supervisor for the Center for NYC Neighborhoods, an inexpensive-housing nonprofit. “That is a potent mix for scammers.”

Deed theft will take different varieties, but Mr. Solny is accused of a single of the most common.

The fraud preys on persons who are in danger of losing their residences, information and facts that is effortlessly obtainable in actual estate databases. Some buyers also recruit regional citizens to locate people they know who are in economic difficulties.

Home owners are informed they qualify for a shorter sale — a deal in which the loan company settles for considerably less than the quantity owed on the mortgage. The homeowners, currently resigned to shedding their attributes to foreclosure and bewildered by a mountain of paperwork, believe the offer will at the very least relieve them of their debt and give them a small amount of money of income.

In truth, the documents they sign transfer possession of the creating even though however leaving the house owners accountable for the debt. The individual committing the fraud brings in tenants and collects hire, sometimes for decades, until eventually banking companies or other loan companies at last foreclose on the residence.

Ms. Bruce fell driving on her home loan payments in 2013, immediately after her husband, James, a system examiner for the Department of Properties, had a stroke.

A close friend from church referred Ms. Bruce to Mr. Solny, who stated he could help arrange a limited sale. Mr. Solny advised her she would lose the dwelling but the house loan would be paid, and he would choose treatment of every thing as her attorney, she stated in her lawsuit.

Mr. Solny and his associates arrived late, Ms. Bruce stated, and then rushed her and her spouse to indication paperwork in independent rooms. He compensated them every single $7,000, according to the grievance.

No brief-sale endeavor was produced, she stated, but a deed transferring the home to East 29th Street Realty Inc. was recorded with the metropolis, records exhibit. Mr. Solny signed as the buyer, and his daughter, Shandelle Solny, signed as a witness. For yrs, mainly because of assurances from Mr. Solny, Ms. Bruce did not realize that the developing personal debt would continue being in her name, she reported. She owes around $350,000 — a credit card debt she could shell out, with money to spare, if she had been equipped to market or refinance the dwelling.

Mr. Solny set up tenants soon following the couple moved out and has gathered extra than $200,000 from the setting up, in accordance to Bill Lienhard, a attorney for Ms. Bruce. Two recent tenants verified to The Instances that they paid out lease to a business controlled by Mr. Solny.

“He collects rent right up until the foreclosures is finished, and then he’s out — what does he treatment?” said Toby Cohen, an additional law firm who has represented various persons suing Mr. Solny.

Prosecutors say they are hamstrung by the regulation: They must display there was criminal intent in situations that are not as slam-dunk as these they like to convey to court. Yrs can go by ahead of a home-owner realizes what occurred, and the transactions are complex. What one particular human being claims as fraud can be defended as just a lopsided business enterprise offer.

“Deed theft is notoriously difficult to look into and prosecute,” reported Melinda Katz, the Queens district legal professional. The sentiment was echoed by Eric Gonzalez, the Brooklyn district attorney.

Civil lawsuits are typically the only way a home owner can test to reclaim a title, and victims frequently are unable to afford to pay for a law firm. The plaintiffs rarely earn — houses as soon as owned by many of Mr. Cohen’s customers were being offered at foreclosure auctions to other get-togethers right before the circumstances could be settled.

Litigation is intricate by a website of shell organizations controlled by Mr. Solny and members of his loved ones. Of the 140 transactions The Occasions linked to Mr. Solny, none was individually deeded to him. As an alternative, he signed as an officer of a company entity that assumed possession.

“We misplaced everything,” Ms. Bruce explained, recalling a period of time when she slept on friends’ couches and left New York for more cost-effective housing in Philadelphia. Her spouse died in 2020. “Do you know how really hard it is to be picking up the parts when you are in your senior yrs?”

Householders are not the only types influenced. Tenants and city agencies have complained of serious protection and well being dangers at structures owned by businesses linked to Mr. Solny.

Of the 19 disputed houses those people firms still owned as of June, 15 had open up housing violations, which include for warmth and hot-h2o failures, unsafe wiring and pest infestations.

“They’re not carrying out almost nothing — never ever have heating, hardly ever resolve nothing,” mentioned Sandy Triunfel, a home attendant who in 2017 stopped spending hire on her apartment in Crown Heights, Brooklyn, according to court docket documents, since she said she did not get very hot drinking water or gas for months.

The proprietor, Blue Realty & Providers Team, a firm tied to Mr. Solny, evicted her the upcoming yr. The former home owner experienced claimed in civil courtroom that the company had tricked him into signing around the deed to the household.

At Ms. Bruce’s previous house, metropolis inspectors found nearly 4 dozen guide paint violations in February 2019, when a mom and her 8 kids were being residing there. Following the tenants used for crisis rental support, the metropolis compensated about $21,000 in back hire to Mr. Solny’s company. Two recent tenants stated the town was nonetheless paying some of their hire via subsidies.

It was a single of three disputed houses where The Moments uncovered the metropolis had covered the lease for Mr. Solny’s tenants. The New York City Housing Authority, which paid out subsidies at one of the houses, said it had considering the fact that additional Mr. Solny’s organization to a checklist of banned landlords.

Neha Sharma, a spokeswoman for the town Section of Social Products and services, which administers the lease aid system at the other two buildings, explained the agency’s precedence was to protect housing steadiness for tenants.

Mr. Solny, 65, who is recognised as Sandy, has been on the city’s radar for a long time.

In 2012, he was suspended from practising legislation for pilfering $600,000 from his dying uncle, according to a disciplinary board decision. He paid out again the funds but continues to be suspended.

The subsequent 12 months, Mr. Solny and his daughter went on a buying spree: at the very least 50 properties in Queens, Brooklyn and the Bronx, lots of of which ended up in or approaching foreclosure. On a one day in March 2013, they signed the deeds to 3 homes in East New York, a predominantly Black neighborhood in Brooklyn, in accordance to city information.

Tenants and property owners explained him as cordial, with a smooth voice and grandfatherly mien.

“He’s extremely slick,” stated Richard Critical, who sued a company managed by Mr. Solny in 2015 for professing the title to his two-family dwelling in East New York. The situation is open.

In 2016, Mr. Solny and his associates ended up charged in Queens with crimes associated to the theft of 10 homes. He pleaded guilty two several years later on to a lesser demand of legal possession of stolen assets and was sentenced to up to five a long time of probation.

Mr. Solny compensated a high-quality and returned rent he had collected, and five deeds ended up voided as a final result of the deal. His daughter, Shandelle, 31, was charged with tax fraud and paid out restitution in a plea deal. Ms. Solny declined to comment further than the assertion issued by her father’s law firm.

In 2020, Brooklyn prosecutors billed Mr. Solny with crimes linked to the theft of 8 homes. Subsequent the indictment, Mr. Solny’s probation officer proposed that he be sentenced to prison for violating the terms of his plea deal in Queens. A verdict has not nonetheless been attained in the Brooklyn scenario.

The Queens deal did not bar Mr. Solny from buying a lot more real estate, but the court appointed a keep track of in 2018 to evaluation his business enterprise offers likely forward and flag any suspicious transactions.

In a critique of house data, The Instances found a questionable transaction conducted following Mr. Solny’s plea in Queens.

Elizabeth Lewis, 77, a retired financial institution worker, told The Instances that in late 2019, Mr. Solny made available to prepare a brief sale on a Brooklyn property, a two-bed room brick home in East Flatbush belonging to Ms. Lewis’s sister, who had a reverse property finance loan and other credit card debt.

Ms. Lewis claimed she signed paperwork on behalf of her sister, who died in 2020, to initiate a sale. The deed recorded the sale at $35,000, but Ms. Lewis claimed she was paid $5,000 with the promise of far more when the home was bought.

She signed above the deed to a organization controlled by Mr. Solny, but the personal debt was not paid, according to assets data and the Section of Housing and Urban Growth, which holds the loan.

Comparable revenue demonstrate the household is in all probability truly worth far more than $500,000, but Ms. Lewis can no lengthier sell it mainly because Mr. Solny’s enterprise is shown with the town as the proprietor.

She has not listened to from Mr. Solny in pretty much two a long time, she said.

Brian Sanvidge, who has overseen the assessment of Mr. Solny’s transactions at Anchin, the checking company, mentioned that he experienced looked at additional than 240 qualities related to Mr. Solny and experienced not caught the East Flatbush sale. He named it “concerning” and stated he would report it to the Queens district legal professional.

General public efforts have been created to counter residence fraud, but critics say the actions drop small.

The point out attorney general’s place of work declared a campaign to fight deed theft in 2020, funding cost-free legal services and house loan assistance in neighborhoods vulnerable to fraud. But reduction for people who have by now missing their properties can be tough to get: The office environment is at present prosecuting just a few deed theft conditions.

A condition legislation passed in 2019 incorporated a rule that permits prosecutors to file a movement to void a fraudulent house transfer in link with a guilty plea or verdict.

But the rule is narrowly outlined, limiting its use, and the method can even now acquire a long time, said Rachel Geballe, a deputy director at Brooklyn Authorized Providers. Neither Queens nor Brooklyn prosecutors have utilized the mechanism, whilst the workplaces claimed they had made use of other means to void fraudulent deeds.

For Ms. Bruce, eight several years have passed considering the fact that she signed her property around to Mr. Solny’s corporation. The Brooklyn prison circumstance has been adjourned 13 occasions because late 2020. Mr. Farkas said in courtroom in June that his consumer was thinking of a plea deal.

“I’m hoping some type of justice will occur from this,” Ms. Bruce said. “I say, ‘Lord, when is this going to be more than?’”

Susan Beachy contributed study.

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