Ringleader of Real Estate Scam Targeting Minorities Is Sentenced

August 30, 2018, NEW YORK — Herzel Meiri, the ringleader of a mortgage fraud conspiracy, was sentenced to 10 years in federal prison today. Operating out of an office on Hillside Avenue in Hollis, Queens, Meiri and his team sought out Black and Latino homeowners in the Bronx, Brooklyn, and Queens. They promised to assist their targets with loan modifications that would lower mortgage payments. Instead, they deceived owners into turning their properties over to the fraudsters, who then tried to evict them from their homes.

The scam would begin with a phone call or mailing to an owner of a distressed property, often by a person from the same racial background and country of origin—a tactic known as “affinity marketing.” The owner was invited to come to the offices of “Homeowner Assistance Services of New York” (HASNY). Sometimes, HASNY sent a car to pick up the homeowner and bring them to the Hillside Avenue office.

Once there, the homeowner was coerced into signing documents that they did not understand, or which in some cases were blank. The Meiri fraud team then orchestrated a short sale with the then-mortgage lender on the property and purchased the property for far less than it was worth, without the homeowner’s knowledge or understanding. To gain approval for the sale, the team lied to the bank about the owner’s desires, intentions, and financial circumstances; provided false documentation; and concealed the fact that they were also the buyers of the property that their purported “clients” were selling.

Subsequently, Meiri and his associates would threaten and harass the homeowner, in some cases seeking “rent” payments from the homeowners and their former tenants, and bring eviction proceedings. Some victims lost their homes; others are still fighting to save them. For several years, Brooklyn Legal Services (BLS) attorneys have been representing ten Meiri victims seeking to obtain justice.

“Our home was our only asset,” said Vincent Holmes—one of the plaintiffs BLS is representing—in a statement provided to the U.S. District Court for the Southern District of New York. “We are now facing the possibility that we will be thrust into homelessness as senior citizens, with nothing to show for the decades of work that we devoted to preserving our home.”

In sentencing the Herzel Meiri, District Judge Edgardo Ramos took note of the racial targeting present in this conspiracy, acknowledging that Mr. Meiri used marketing agents with similar backgrounds to their victims, in order to gain their trust. There is ample evidence of racial and ethnic discrimination embedded in the Meiri fraud. In April 2016, BLS attorneys assisted their clients in filing housing discrimination complaints with the federal Department of Housing and Urban Development (HUD). A map showing that the Meiris’ activities almost exclusively took place in non-white communities accompanied the homeowners’ complaints. In October 2017, HUD notified the homeowners that “an investigation indicated that [the Meiris and co-conspirators] may have engaged in a pattern or practice of discrimination based on race or national origin in violation of the Fair Housing Act.” HUD has referred the complaints to the Department of Justice for further action.

Herzel Meiri, 64, and his son Amir Meiri, 35, pleaded guilty to conspiracy to commit wire fraud and bank fraud on April 10, 2018. Amir Meiri will be sentenced in November. In court today, Judge Ramos described the “Dickensian” nature of the Meiris’ crimes, noting that Herzel Meiri and his co-conspirators preyed upon poor and vulnerable homeowners from a position of wealth and privilege. A federal jury also convicted Raj Maddiwar, an attorney who purported to represent the homeowners in these real estate closings, of conspiracy to commit wire fraud and bank fraud. These convictions, however, do not guarantee that the homeowners will be compensated for their loss or regain title to their homes.

As part of their pleas, the Meiris consented to the forfeiture of 30 properties and multiple bank accounts to the federal government. On the homeowners’ behalf, BLS has filed ancillary petitions in federal court seeking the return of their properties, as well as restitution. BLS is also pursuing civil litigation to return a property the Meiris transferred to another individual just before their indictment, and to extinguish a mortgage loan the Meiris took on Mr. Holmes’ home.

The U.S. Attorney’s Office has determined that the Meiris’ widespread scheme affected nearly 60 properties in New York City. Not only did the scam affect these victims and their families, but it may have affected the lives of many more, since the Meiris put phony liens on additional properties throughout Brooklyn, Queens, and the Bronx.

“Property and mortgage scams are rampant in New York City. The unscrupulous individuals who run these scams often have experience in the mortgage and real estate industries, and they most often target homeowners of color,” said Jennifer Sinton, Director of BLS’ Foreclosure Prevention Program, which is part of Legal Services NYC. “This particular operation is unique in that the perpetrators were caught and prosecuted.”

Contact:

Jennifer Sinton

Brooklyn Legal Services

(718) 246-3268

[email protected]