Over the previous dozen years, Sanford Solny has constructed a New York actual property empire, snatching up small residential buildings throughout town that churn out a whole bunch of 1000’s of {dollars} in lease.
His portfolio can be enviable however for one factor — a lot of it, prosecutors and householders contend, was stolen. In prison fees and lawsuits, they’ve accused him of fraud: providing to assist householders going through foreclosures by arranging to repay their mortgages, whereas truly tricking them into signing over their buildings at bargain-basement costs. In practically each case, the mortgage was by no means paid, leaving the house owner with no property however a pile of debt.
The observe is called deed theft, and as metropolis and state officers promised to crack down on it, they homed in on Mr. Solny. The Brooklyn district lawyer, whose workplace has charged him with taking the properties of seven households, known as his habits “despicable.” In Queens, prosecutors accused Mr. Solny and his associates of dishonest 10 folks out of their properties. The court docket appointed a monitor to scrutinize his transactions.
However an examination by The New York Occasions has discovered that not solely is Mr. Solny nonetheless cashing in on buildings below dispute, metropolis businesses are contributing to his earnings by subsidizing the lease at a few of his properties.
His case exemplifies the gradual and stumbling struggle towards deed theft, which regularly targets immigrants and Black and Latino householders. Regardless of repeated pledges from the New York State lawyer normal and legislature to curtail the fraud, solely a small fraction of 1000’s of complaints are ever prosecuted. Owners, stripped of their most vital asset, are left to have interaction in a protracted and costly struggle to attempt to reclaim their properties in civil court docket.
A detailed overview of Mr. Solny’s holdings and transactions — drawing on housing court docket instances, lawsuits, metropolis property data and interviews — reveals a protracted file of questionable dealings and a largely ineffective authorities response. Over greater than a decade, Mr. Solny and firms linked to him took possession of at the very least 140 properties, The Occasions discovered. The previous house owners of 40 of these buildings — which embrace a coveted brownstone in gentrifying Bedford-Stuyvesant, Brooklyn, a three-story condominium constructing close to Rockaway Seaside and a suburban Craftsman-style house with a garden in Rosedale, Queens — have claimed they had been victims of deed theft, civil and prison court docket data present.
Even whereas Mr. Solny was below the attention of the monitor, an organization managed by him paid a Brooklyn girl $5,000 for a house value about 100 instances that a lot and left her household with the debt, in response to the lady and metropolis property data.
By an internet of shell corporations, Mr. Solny nonetheless owns 19 properties whose house owners he has been accused of defrauding, and he collects lease from tenants he put in in a lot of them, in response to court docket filings, metropolis data and interviews. As prison fees towards Mr. Solny have piled up, metropolis businesses have paid the lease of tenants at a few of these properties via affordable-housing vouchers, The Occasions discovered.
“How does the system work for him and never for us?” mentioned Janet Bruce, a retired house well being aide from Guyana who mentioned in court docket filings that Mr. Solny walked into her house in Flatbush, Brooklyn, in 2014 with a stack of paper and a promise to rescue her and her husband from foreclosures. He gave the couple $14,000 however by no means paid off their mortgage, she mentioned.
He walked out because the proprietor of a constructing now value about $900,000, mentioned Ms. Bruce, 69, who has sued Mr. Solny. The transaction can be a part of the prison case in Brooklyn.
From July 2014 via February of this yr, there have been greater than 3,350 complaints of deed theft in New York Metropolis, nearly half of which had been in Brooklyn, in response to town Division of Finance. The Brooklyn district lawyer’s workplace introduced fees in 27 instances of deed theft since 2014, in response to a Occasions overview.
“It simply makes you surprise how severely we, as a society, and our prison justice system, take white-collar crime that really victimizes folks,” mentioned Oda Friedheim, a supervising lawyer on the Authorized Help Society who offers with property fraud.
A lawyer for Mr. Solny declined to reply particular questions from The Occasions, citing the open prison case in Brooklyn.
“The truth that these shoppers would lose their properties had been a foregone conclusion lengthy earlier than they ever met Mr. Solny,” the lawyer, Michael Farkas, mentioned in an announcement. “After they sought his help with managing that unlucky and sophisticated actuality, these shoppers executed paperwork that clearly conveyed their properties to Mr. Solny.”
Deed fraud complaints in New York Metropolis have fallen from a peak of 665 in 2015 to 154 final yr. However these numbers masks what may very well be a looming surge now that protections towards foreclosures that had been put in place through the pandemic have expired.
“You’ve gotten a really excessive variety of householders which might be in misery, and actual property in New York has by no means been extra beneficial,” mentioned Ivy Perez, the senior coverage and analysis supervisor for the Heart for NYC Neighborhoods, an affordable-housing nonprofit. “That could be a potent mixture for scammers.”
‘We Misplaced The whole lot’
Deed theft takes totally different kinds, however Mr. Solny is accused of one of the widespread.
The fraud preys on people who find themselves in peril of shedding their properties, data that’s simply obtainable in actual property databases. Some patrons additionally recruit native residents to seek out folks they know who’re in monetary hassle.
Owners are informed they qualify for a brief sale — a deal wherein the lender settles for lower than the quantity owed on the mortgage. The house owners, already resigned to shedding their properties to foreclosures and confused by a mountain of paperwork, imagine the deal will at the very least relieve them of their debt and provides them a small amount of money.
In actuality, the paperwork they signal switch possession of the constructing whereas nonetheless leaving the householders accountable for the debt. The individual committing the fraud brings in tenants and collects lease, generally for years, till banks or different lenders lastly foreclose on the property.
Ms. Bruce fell behind on her mortgage funds in 2013, after her husband, James, a plan examiner for the Division of Buildings, had a stroke.
A pal from church referred Ms. Bruce to Mr. Solny, who mentioned he might assist prepare a brief sale. Mr. Solny informed her she would lose the home however the mortgage can be paid, and he would deal with all the things as her lawyer, she mentioned in her lawsuit.
Mr. Solny and his associates arrived late, Ms. Bruce mentioned, after which rushed her and her husband to signal paperwork in separate rooms. He paid them every $7,000, in response to the criticism.
No short-sale try was made, she mentioned, however a deed transferring the property to East twenty ninth Avenue Realty Inc. was recorded with town, data present. Mr. Solny signed as the client, and his daughter, Shandelle Solny, signed as a witness. For years, due to assurances from Mr. Solny, Ms. Bruce didn’t notice that the rising debt would stay in her title, she mentioned. She owes roughly $350,000 — a debt she might pay, with cash to spare, if she had been in a position to promote or refinance the house.
Mr. Solny put in tenants shortly after the couple moved out and has collected greater than $200,000 from the constructing, in response to Invoice Lienhard, a lawyer for Ms. Bruce. Two present tenants confirmed to The Occasions that they paid lease to an organization managed by Mr. Solny.
“He collects lease till the foreclosures is finished, after which he’s out — what does he care?” mentioned Toby Cohen, one other lawyer who has represented a number of folks suing Mr. Solny.
Prosecutors say they’re hamstrung by the regulation: They have to present there was prison intent in instances that aren’t as slam-dunk as these they like to deliver to court docket. Years can go by earlier than a home-owner realizes what occurred, and the transactions are sophisticated. What one individual claims as fraud might be defended as only a lopsided enterprise deal.
“Deed theft is notoriously troublesome to analyze and prosecute,” mentioned Melinda Katz, the Queens district lawyer. The sentiment was echoed by Eric Gonzalez, the Brooklyn district lawyer.
Civil lawsuits are often the one means a home-owner can attempt to reclaim a title, and victims usually can’t afford a lawyer. The plaintiffs hardly ever win — properties as soon as owned by a number of of Mr. Cohen’s shoppers had been offered at foreclosures auctions to different events earlier than the instances may very well be settled.
Litigation is sophisticated by an internet of shell corporations managed by Mr. Solny and members of his household. Of the 140 transactions The Occasions linked to Mr. Solny, none was personally deeded to him. As an alternative, he signed as an officer of a company entity that assumed possession.
“We misplaced all the things,” Ms. Bruce mentioned, recalling a interval when she slept on mates’ couches and left New York for cheaper housing in Philadelphia. Her husband died in 2020. “Have you learnt how onerous it’s to be choosing up the items if you’re in your senior years?”
No Warmth or Scorching Water
Owners will not be the one ones affected. Tenants and metropolis businesses have complained of significant security and well being hazards at buildings owned by corporations linked to Mr. Solny.
Of the 19 disputed properties these corporations nonetheless owned as of June, 15 had open housing violations, together with for warmth and hot-water failures, unsafe wiring and pest infestations.
“They’re not doing nothing — by no means have heating, by no means repair nothing,” mentioned Sandy Triunfel, a house attendant who in 2017 stopped paying lease on her condominium in Crown Heights, Brooklyn, in response to court docket data, as a result of she mentioned she didn’t obtain sizzling water or gasoline for months.
The proprietor, Blue Realty & Companies Group, an organization tied to Mr. Solny, evicted her the subsequent yr. The earlier house owner had claimed in civil court docket that the corporate had tricked him into signing over the deed to the house.
At Ms. Bruce’s former house, metropolis inspectors discovered nearly 4 dozen lead paint violations in February 2019, when a mom and her eight kids had been dwelling there. After the tenants utilized for emergency rental support, town paid roughly $21,000 in again lease to Mr. Solny’s firm. Two present tenants mentioned town was nonetheless paying a few of their lease via subsidies.
It was one in all three disputed properties the place The Occasions discovered town had coated the lease for Mr. Solny’s tenants. The New York Metropolis Housing Authority, which paid subsidies at one of many properties, mentioned it had since added Mr. Solny’s firm to a listing of banned landlords.
Neha Sharma, a spokeswoman for town Division of Social Companies, which administers the lease help program on the different two buildings, mentioned the company’s precedence was to protect housing stability for tenants.
A Shopping for Spree
Mr. Solny, 65, who is called Sandy, has been on town’s radar for years.
In 2012, he was suspended from practising regulation for pilfering $600,000 from his dying uncle, in response to a disciplinary board choice. He paid again the cash however stays suspended.
The following yr, Mr. Solny and his daughter went on a shopping for spree: at the very least 50 homes in Queens, Brooklyn and the Bronx, a lot of which had been in or approaching foreclosures. On a single day in March 2013, they signed the deeds to 3 properties in East New York, a predominantly Black neighborhood in Brooklyn, in response to metropolis data.
Tenants and householders described him as cordial, with a smooth voice and grandfatherly mien.
“He’s very slick,” mentioned Richard Extreme, who sued an organization managed by Mr. Solny in 2015 for claiming the title to his two-family house in East New York. The case is open.
In 2016, Mr. Solny and his associates had been charged in Queens with crimes associated to the theft of 10 properties. He pleaded responsible two years later to a lesser cost of prison possession of stolen property and was sentenced to as much as 5 years of probation.
Mr. Solny paid a high-quality and returned lease he had collected, and 5 deeds had been voided because of the deal. His daughter, Shandelle, 31, was charged with tax fraud and paid restitution in a plea deal. Ms. Solny declined to remark past the assertion issued by her father’s lawyer.
In 2020, Brooklyn prosecutors charged Mr. Solny with crimes related to the theft of eight properties. Following the indictment, Mr. Solny’s probation officer really helpful that he be sentenced to jail for violating the phrases of his plea deal in Queens. A verdict has not but been reached within the Brooklyn case.
The Queens deal didn’t bar Mr. Solny from shopping for extra actual property, however the court docket appointed a monitor in 2018 to overview his enterprise offers going ahead and flag any suspicious transactions.
In a overview of property data, The Occasions discovered a questionable transaction carried out after Mr. Solny’s plea in Queens.
Elizabeth Lewis, 77, a retired financial institution employee, informed The Occasions that in late 2019, Mr. Solny provided to rearrange a brief sale on a Brooklyn property, a two-bedroom brick home in East Flatbush belonging to Ms. Lewis’s sister, who had a reverse mortgage and different debt.
Ms. Lewis mentioned she signed paperwork on behalf of her sister, who died in 2020, to provoke a sale. The deed recorded the sale at $35,000, however Ms. Lewis mentioned she was paid $5,000 with the promise of extra when the home was offered.
She signed over the deed to an organization managed by Mr. Solny, however the debt was not paid, in response to property data and the Division of Housing and City Improvement, which holds the mortgage.
Comparable gross sales present the home might be value greater than $500,000, however Ms. Lewis can not promote it as a result of Mr. Solny’s firm is listed with town because the proprietor.
She has not heard from Mr. Solny in nearly two years, she mentioned.
Brian Sanvidge, who has overseen the overview of Mr. Solny’s transactions at Anchin, the monitoring agency, mentioned that he had checked out greater than 240 properties related to Mr. Solny and had not caught the East Flatbush sale. He known as it “regarding” and mentioned he would report it to the Queens district lawyer.
Little Reduction
Public efforts have been made to counter property fraud, however critics say the measures fall brief.
The state lawyer normal’s workplace introduced a marketing campaign to struggle deed theft in 2020, funding free authorized companies and mortgage help in neighborhoods weak to fraud. However aid for many who have already misplaced their properties might be troublesome to get: The workplace is presently prosecuting simply three deed theft instances.
A state regulation handed in 2019 included a rule that enables prosecutors to file a movement to void a fraudulent property switch in reference to a responsible plea or verdict.
However the rule is narrowly outlined, limiting its use, and the method can nonetheless take years, mentioned Rachel Geballe, a deputy director at Brooklyn Authorized Companies. Neither Queens nor Brooklyn prosecutors have used the mechanism, though the workplaces mentioned that they had used different means to void fraudulent deeds.
For Ms. Bruce, eight years have handed since she signed her house over to Mr. Solny’s firm. The Brooklyn prison case has been adjourned 13 instances since late 2020. Mr. Farkas mentioned in court docket in June that his consumer was contemplating a plea deal.
“I’m hoping some kind of justice will come from this,” Ms. Bruce mentioned. “I say, ‘Lord, when is that this going to be over?’”
Susan Beachy contributed analysis.
