Attorney General Cuomo Brings Criminal Charges Against Nyc Apartment Broker For Bait & Switch Schemes On Craigslist.org That Bilked 4,000 New Yorkers Out Of Nearly $1 Million Dollars
NEW YORK, NY (July 17, 2008) - Attorney General Andrew M. Cuomo today announced that an undercover investigation found a New York City company acting as an apartment broker used bait & switch schemes on the popular website Craigslist.org to bilk 4,000 New Yorkers out of almost $1 million dollars. The investigation led the Attorney General’s office to bring criminal charges against Innovative Apartments and Screening Services Inc. for scheming to defraud customers and operating without a license.
Cuomo revealed today that his office’s undercover investigation found Innovative Apartments charged customers $200 for credit reports and background checks that were never conducted, and advertised “exclusive” listings on Craigslist.org that were actually apartments that did not exist.
“Craigslist.org can be a terrific asset for New Yorkers trying to navigate a difficult real estate market, but bait and switch schemes orchestrated by crooked apartment brokers can turn hunting for an apartment into a nightmare,” said Attorney General Cuomo. “By aggressively prosecuting disingenuous online brokers, we can ensure New Yorkers don’t waste their time and money by pursuing phony leads for apartments.”
Cuomo’s investigation discovered that from December 18, 2005, to May 21, 2008, Innovative Apartments advertised no-fee rental apartments in various New York City neighborhoods on Craigslist.org. When apartment hunters called to inquire about those apartments, they were told by Innovative Apartments that they needed to pay a fee of approximately $200 for Innovative’s services.
The fee was allegedly to be used for credit reports and background checks, as well as access to no-fee apartment listings via e-mail and Innovative’s online database. Customers were told that Innovative had many exclusive listings that matched the customers’ criteria. In fact, Innovative rarely ran credit reports or completed background checks, instead pocketing the $200 fee.
Furthermore, it is alleged that they failed to update their website and only e-mailed customers a handful of listings, none of which were exclusive. Moreover, the listings were often recycled from other Craigslist.org advertisements, described non-existent or unavailable apartments, or advertised apartments that required the payment of fees.
Throughout this scheme, the defendants allegedly fraudulently obtained over $900,000 from more than 4,000 customers. When the complainants tried to obtain a refund, Innovative’s employees routinely ignored their requests, provided only a partial refund, or issued refund checks that did not clear.
Today, Cuomo announced Innovative Apartments’ co-owners Nader Jaber and Igor Portnov a.k.a. Bobby Portnov, and employees Brooke Corio and Boris Portnov a.k.a Brian Portnov, are charged with Scheme to Defraud in the First Degree (a class “E” Felony) and Operating an Apartment Information Vendor without a license (an unclassified Misdemeanor).
This case is being prosecuted by Assistant Attorneys General Lesley Brovner and Michele Maerov under the supervision of Criminal Prosecutions Bureau Chief Gail Heatherly and Deputy Bureau Chief Felice Sontupe. The investigation is being conducted by Investigators David Negron and John McManus from the Attorney General’s office, under the supervision of Deputy Chief Thomas Richardson, and Investigator Meghan Salmieri from the Department of State, under the supervision of District Manager Ernita Gantt.
The charges contained in the indictments are merely accusations and the defendants are presumed innocent unless and until proven guilty.