Fraudsters in New York are taking advantage of the booming Brooklyn real-estate market, tricking homeowners into signing deeds that transfer the property to new owners — for a fraction of what the house is worth. The victims? Black homeowners living in rapidly-gentrifying neighborhoods.
The New York Times published a story regarding these fraudulent transactions Oct. 21. Deed theft, or coercing or deceiving homeowners to transfer ownership of their homes, is taking over mainly African American communities in areas like Bedford-Stuyvesant and Crown Heights. Many homes in these neighborhoods are much more affordable than they would be in other parts of the city, drawing more prospective buyers to the area.
To trick people into signing these deeds, the Times reports, scammers often hide behind claims that they are offering financial assistance. Instead, they are tricking vulnerable populations into handing over houses that have historic and economic value for almost nothing.
The story begins with Broadies Byas, 54, who had her 1856 Victorian townhouse worth $1.2 million taken from her for a mere $120,000. The home is not only financially valuable. Her father, who was born into a family of former slaves in the south bought the Victorian in 1957 for $7,500.
Even the most skeptical and jaded New Yorkers are falling victim to these schemes, Byas told the Times. Of the 3,000 deed fraud complaints filed in the city since 2014, 1,350 have come from Brooklyn, according to data from the city’s Department of Finance obtained by the Times.
In Byas’ case, those who tricked her into signing the deed — Herzel Meiri and his son, Amir, were arrested — but she is still fighting to regain ownership of her historic home.
Schemers hide behind the guise of shell companies — fraudulent companies that only exist on paper — and limited liability companies (LLCs). This veil clouds who is truly behind these transactions, making it more difficult for victims to realize they are being swindled.
The Meiris set up an LLC called Launch Development to usurp the property from Byas. They said they were foreclosure specialists who helped people modify loans or transfer properties to trusted relatives. They claimed to be from the Homeowners Assistance Services of New York. Byas could no longer work because of a physical disability and was facing foreclosure. She told the Times she believed another mortgage would help her keep ownership of her historic family home.
Those perpetrating these crimes search public records to identify homeowners who are under economic stress. These homeowners are the most vulnerable and most likely to sign documents presented to them as financial assistance.
Sometimes, the swindlers will edit documents after they’ve been signed. It’s also difficult to prove a property has been stolen unless there is obvious proof of wrongdoing, like a forged signature. It can also be difficult to prove the deal was fraudulent and not just simply bad.
The Times also reported that documents proving the sale of a home are seldom checked for legitimacy in the city registrar’s office, so victims often continue paying mortgages on homes they technically no longer own.
As it becomes more popular for younger, wealthier people to move to these more affordable places in Brooklyn and other parts of New York, the demand for properties grows, allowing room for fraudsters to slip in. The demand gentrification puts on these neighborhoods is giving incentive for swindlers to make large profits, displacing the people who have lived there for generations.
Byas’ house is currently in the hands of the government, and she is still working on getting it back.
“We were living the American dream,” Byas told the Times. “This is a house that your ancestors worked for. They came from nothing.”