As alleged, the defendants defrauded mortgage loan holders out of millions of dollars, with taxpayers saddled with much of the loss, stated United States Attorney Donoghue. Million Dollar Listing News, Pictures, and Videos - E! Online In May 2018, he filed Chapter 7 bankruptcy, sending eight of his properties into foreclosure. Investors had no idea what was going on, although the insider grew more suspicious when he saw a for sale sign outside a building in the East 60s a property he had invested in. Fax Line: 718-254-7508. 18.) 'Million Dollar Listing' Brokers Reveal What's Staged - but Also What's Email address: drroyofcr@gmail.com. Ryan Serhant is Leaving Million Dollar Listing New York as - People This case is distinguishable from United States v. Gabriel, in which the court granted defendants' motion to dismiss one of three conspiracy counts charged in the indictment as barred by the statute of limitations. Please complete the form below and click on SIGN UP to receive daily e-newsletters from. If a homeowner obtains approval for a short sale, the lender releases the mortgage after the short sale and submits an FHA insurance claim to HUD to cover the outstanding mortgage balance net of the short sale proceeds, plus approved costs and interest. 498, 506 (S.D.N.Y. Age: 33 There was one unusual aspect: DAlessio paid investors standard annual returns of 15 to 18% but personally guaranteed the dividends. Further, with respect to 1219 Jefferson Avenue, "the only mention of [him] is that he participated in the closing by wiring the loan payoff amount to the servicer's bank account," (id. Age: 48 The Cast Of Bravo's 'Million Dollar Listing' Ranked By Net Worth But all that largesse may have been a means to a selfish end. Historical queries, urban legends, clarification on rumors let us do the research for you! . 271 Cadman Plaza East An indictment was unsealed today in federal court in Brooklyn charging Iskyo Aronov, Michael Konstantinovskiy, Tomer Dafna, Avraham Tarshish and Michael Herskowitz . Aronov appeared in court in Miami and his bond was set at $500,000, according to court papers. (Ind. As a result, defendants not only acquired the properties for below-fair market value prices, but obtained broker fees in the transactions and induced lenders to release the FHA-insured mortgages at a loss. The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. Feds file civil suit in Brooklyn in mortgage fraud case Rego Park, Queens, Tomer Dafna At least 20 people have been convicted in alleged scams. They allegedly manipulated the short sale at an arms length transaction, in which they would pay the homeowner to sign over their deeds, hire a fake agent to market the properties, and then sell it to one of their shell companies. The Short Sale Schemes "originated at [My Ideal Property ('MIP')] under the direction of [Aronov] with the assistance of [Konstantinovskiy and Tarshish], Short-Sale Co-Conspirators 1, 2 and 3, and others" (the "MIP Scheme") and the scheme was later replicated by Tarshish and Dafna "at Exclusive Homes with the assistance of Short-Sale Co-Conspirator 2 and others" (the "Exclusive Homes Scheme"). UNITED STATES OF AMERICA, v. ISKYO ARONOV, MICHAEL KONSTANTINOVSKIY, TOMER DAFNA, AVRAHAM TARSHISH, and MICHAEL HERSKOWITZ, Defendants. (Id. of Def. 2013) (quoting United States v. De La Pava, 268 F.3d 157, 162 (2d Cir. Pursuant to HUDs Pre-Foreclosure Sale Program, qualifying homeowners with defaulted, FHA-insured mortgages may sell their properties in a short sale for less than the balance of the mortgage if the sale is for the fair market value of the property. The partners negotiated with banks to let the property go for far less than market rate, a process known as short selling. Million Dollar Listing is meant to represent the top 1% trying to buy and sell houses and for this, the show needs to add some glamor from time to time. Iskyo Aronov ( also known as "Isaac Aronov ") Middle Village, New York, Ron Borovinsky, Hollis Hills, New York and Michael Konstantinovskiy, Roslyn Heights, New York have been charged in a wide-ranging mortgage fraud scheme to defraud the government. I figured he knows what hes doing.. MARGO K. BRODIE, UNITED STATES DISTRICT JUDGE. 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. Ryan Serhant, of Million Dollar Listing New York fame, was the broker on at least one of DAlessios projects. A locked padlock f 42.). Assistant United States Attorney Shannon C. Jones . He hosted friends at his $13 million home in Water Mill, LI, to play tennis and feast on meals cooked by his private chef. Between 2013 and 2016, Aronov and his co-conspirators engaged in the short sales of nine homes in Brooklyn (three in Bed-Stuy and two in Bushwick) and one in Queens Village acquiring the properties at depressed prices through HUDs pre-foreclosure sale program. Likewise, Herskowitz argues that he is wrongly "charged in Count Six - the substantive wire fraud count relating to the 177 Lewis Avenue sale - even though the factual portion of the Indictment indicates that he was not involved in that sale." 3, Docket Entry No. See which Bravo real estate agents are returning for more high-stakes drama in the newly released season 14 trailer. Copyright 1996-2023 KM Business Information US, Inc. Is the shift to a buyer's market underway? Join Facebook to connect with Isaac Aronov and others you may know. 12, 14.) Under the FCA, private citizens with knowledge of fraud against the government can bring a lawsuit on behalf of the United States and share in the recovery. We are proud to have partnered with the U.S. Attorneys Office for the Eastern District of New York in this case, said, , Federal Housing Finance Agency, Office of Inspector General, The governments complaint intervenes in a lawsuit originally brought by under the. P. 12(b)(3)(B); United States v. Aleynikov, 676 F.3d 71, 75-76 (2d Cir. AG2 . Their Home Was In Foreclosure. NOTICE OF FILING OF OFFICIAL TRANSCRIPT of Proceedings as to Iskyo Aronov, Michael Konstantinovskiy, Tomer Dafna, Avraham Tarshish, Michael Herskowitz held on October 2, 2019, before Judge Margo K. Brodie. Million Dollar Listing New York would be nothing without Steve Gold, something the ladies would probably agree on. "In turn, HUD paid the lenders claims for FHA insurance from federal funds. The four other men were arraigned in Brooklyn. The governments complaint intervenes in a lawsuit originally brought by under thequi tam provisions of the FCA. Her work has appeared on NBC News shows, NBCNews.com, The Guardian, The Nation and Vice, among other outlets. It seemed like the interest payments would mitigate profits.. Michael Konstantinovskiy (also known as "Michael Kay") Age: 33 Rego Park, Queens. In a short sale, with the approval of the mortgage lender or servicer, a mortgage loan borrower sells his or her property for less than the outstanding balance of the mortgage loan. Courts must accept as true the allegations in an indictment for purposes of evaluating a motion to dismiss. The defendants allegedly engaged in a scheme of wholesale deception when they provided false, misleading, and incomplete information to lending institutions, homeowners, and the Federal Housing Administration (FHA) causing millions of dollars in damages to the FHA,which typically results in higher premiums being charged to future first-time homeowners, HUD-OIG Special Agent-in-Charge Scaringi said. Do you have a story for The US Sun team? United States v. Ghayth, 709 Fed.Appx. richest million dollar listing los angeles mdlla star josh flagg net of Def. Under the federal program, homeowners with defaulted mortgages that are insured by the Federal Housing Administration can sell their properties in a "short sale" for less than the balance of the mortgage if the sale is for fair market value. 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. ISKYO ARONOV (also known as Isaac Aronov) Roslyn Heights, New York, John Marzulli Facebook gives people the power to. 11-CR-31, 2012 WL 463973, at *4 (E.D.N.Y. 11). 271 Cadman Plaza East Borovinsky identified himself as a co-founder with Aronov of My Ideal Property. Parties for United States v. Aronov wt al, 1:19-cr-00408 As Tutor . He was sentenced to six years in federal prison and will begin serving time by June 5. on Sept. 19. But that can be a long road, and one more difficult if borrowers were deep in debt. Title 18, United States Code, Section 1343 imposes criminal liability on any party who "having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire in interstate or foreign commerce, any writings for the purpose of executing such scheme or artifice." Like us on Facebook at www.facebook.com/TheSunUS and follow us from our main Twitter account at @TheSunUS The program requires what's known as an "arm's length transaction," or that the seller and buyer aren't related or affiliated with one another. [DAlessio] is a guy who got too big for his own britches., In an email published by Westchester County Business, DAlessio claimed: There was absolutely no fraud committed. On Aug. 30, he was arrested in his Upper East Side home, where law enforcers found a firearm and $44,000 in cash. provisions of the FCA. Ryan Serhant recently spent a whopping $2.6 million in renovations on his new family townhouse in Brooklyn. The act also permits the government to intervene in such actions, as the government has done in this case. (Indictment ("Ind.") How an NYC developer stole $58M from his wealthy clients - New York Post 2018) (rejecting defendants' argument that "the indictment is deficient" for failing to "allege any facts to support its contention" that defendants knowingly made false representations to their respective universities regarding violations of NCAA rules, because the indictment sufficiently put defendants on notice of the criminal conduct alleged and the defendants' arguments otherwise amount to premature challenges to the sufficiency of the evidence). ), The Indictment was unsealed by order dated September 12, 2019. I felt bad for him, said the real estate pro. 1-3.) New York state also passed legislation this year meant to better protect homeowners who had been the target of predatory investment or fraud. Subscribe to Patch's new newsletter to be the first to know about open houses, new listings and more. Million Dollar Listing's Fredrik Eklund QUITS show after fans called Each show chronicles the professional and personal lives of real estate agents based in a major American city as they sell high-end properties, giving viewers an inside look at the world of high-priced real estate. 1999); United States v. Raniere, 384 F.Supp.3d 282, 292 n.l (E.D.N.Y. This Office will Eastern District of New York "An indictment is sufficient if it 'first, contains the elements of the offense charged and fairly informs a defendant of the charge against which he must defend, and, second, enables him to plead an acquittal or conviction in bar of future prosecutions for the same offense."' Five years ago, there seemed to be no reason for investors to doubt DAlessio. 36-42, Docket Entry No. The Future of Million Dollar Listing. 2018) ("[A] court cannot test the sufficiency of the government's evidence on a Rule 12(b) motion."). Rule 12(b)(3)(B) of the Federal Rules of Criminal Procedure. As alleged, these defendants fraudulently obtained homes at depressed prices at the expense of a taxpayer-funded program designed to assist borrowers seeking the American Dream of home ownership, Acting U.S. Attorney Seth DuCharme said. The defendants allegedly engaged in a scheme of wholesale deception when they provided false, misleading, and incomplete information to lending institutions, homeowners, and the Federal Housing Administration (FHA) causing millions of dollars in damages to the FHA, which typically results in higher premiums being charged to future first-time homeowners. 19, 28, 28(d), 32, 32(f). Docket No. 1996))). at 11 (citing Ind. 16), and that to the extent the Indictment charges him with different substantive counts of wire fraud related to specific short sale transactions, "these counts are inconsistent with the factual recitation of the Indictment," which "indicates that [Herskowitz] was not a participant in the [MIP Scheme] and that he is named only in conjunction with the alleged Exclusive Homes [S]cheme," (id. U.S. Government Sues Real Estate Pros For Brooklyn Mortgage Scam Eagle file photo, News for those who live, work and play in Brooklyn and beyond, May 1 | 2017) (alteration in original) (quoting United States v. Pirro, 212 F.3d 86, 92 (2d Cir. Since 2006, the Bravo reality show Million Dollar Listing has been showing viewers the ups and downs of realtors who work with wealthy clients in Los Angeles. Lock Between 2013 and 2016, Aronov and his co-conspirators engaged in the "short sales" of nine homes in Brooklyn (three in Bed-Stuy and two in Bushwick) and one in Queens Village - acquiring the. These payments by HUD were artificially inflated as a result of the defendants fraudulent conduct," officials said. 's Mot"), Docket Entry No. Contact Lisa Riordan Seville at tom.gara+lisariordanseville@buzzfeed.com. iskyo aronov million dollar listing patton development company. The Indictment provides a detailed overview of the MIP and Exclusive Homes Schemes, (see Id. As a result, the Second Circuit "ha[s] consistently upheld indictments that do little more than to track the language of the statute charged and state the time and place (in approximate terms) of the alleged crime." A lock ( United States Files Civil Fraud Suit Against Three Individuals and U. S. Files Civil Fraud Suit Alleging Mortgage Fraud Scheme January 4 2019) (defining bank fraud). The Government contends generally that Herskowitz's claim that "the Indictment is 'silent' as to his role in the charged short sale fraud Counts is both untrue and irrelevant." Herskowitzs attorney declined to comment for this story, citing the ongoing case. Five Defendants Indicted in Mortgage Fraud Scheme (Ind. Aronov was arrested in Florida, and will appear this afternoon for a removal hearing at the federal courthouse in Miami. David Noel Kelley (212) 698-3500. Another alleged co-conspirator was arrested in Florida. 2012))). That may be a good thing for the borrowers, said Catherine Isobe, senior staff attorney at Brooklyn Legal Services, who has worked on foreclosure cases for years. He paid a $281,000 settlement in the Florida case and pleaded guilty to a disorderly conduct violation in the second. As alleged in the complaint, from at least 2013 through 2016, the defendants defrauded HUD by manipulating the short sale process to acquire residential properties from numerous distressed homeowners for below-fair market value prices in non-arms-length transactions. Since 2015, Herskowitz has been implicated in at least two other schemes targeting borrowers in foreclosure in Florida and Queens. ) or https:// means youve safely connected to the .gov website. U.S. Attorney's Office, Eastern District of New York, Defendants Allegedly Engaged in a Scheme to Purchase Real Estate at Fraudulently Depressed Short Sale Prices Resulting in Millions of Dollars in False Claims Submitted to HUDs FHA Mortgage Insurance Program, United States Files Civil Fraud Suit Against Three Individuals and Multiple Real Estate Companies Alleging Mortgage Fraud Scheme, Owner of Brooklyn-Based Credit Counseling Business Indicted for Defrauding Clients, , , , Former Owner and Executive at Long Island Mortgage Lender Sentenced to 24 Months' Imprisonment for $8.9 Million Fraud. ATL. 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.