Attorney General Cuomo Seeks Jail For Fraudulent, Habitual Western New York House-flipper
BUFFALO, N.Y. (April 7, 2008) – Attorney General Andrew Cuomo today announced his office is seeking a criminal contempt-of-court order against a Niagara Falls man who tried to defraud investors through a Western New York house-flipping scheme after he was ordered not to. He is also being charged with Grand Larceny for allegedly taking nearly $52,000 from one investor.
Joseph Furan, 39, of Lockport Road in Niagara Falls, faces criminal contempt of court for 13 violations of a prior court judgment by fraudulently advertising properties on the popular Internet classified site Craigslist. Each violation can carry a maximum jail term of 30 days and a $1,000 fine. Furan is also facing the felony charge of Grand Larceny in the Third Degree for selling two properties to an investor over the Internet – and then not providing the titles.
“My office is committed to preventing con artists from employing fraudulent schemes that further erode Western New York’s housing market,” said Attorney General Cuomo. “The court previously held Mr. Furan liable for persistent fraud with respect to the sale of properties over the Internet, and the court ordered him to desist. If he believed my office would overlook violations of a court order, he is sorely mistaken. We will continue working to make sure that the Internet is not a safe haven for those attempting to defraud the public.”
Last September, Attorney General Cuomo obtained a court order banning Furan from using the Internet to sell any properties in the state unless he posted a $100,000 performance bond. He was also barred from conducting any transactions regarding securities or commodities and from engaging in any deceptive business practices. In that case, Furan placed multiple ads on the Internet site eBay in an attempt to lure investors to buy properties he did not own, among other schemes.
Since that court order, an investigation by the Attorney General’s Office discovered that Furan – without posting the $100,000 bond – had begun advertising to sell properties on Craigslist. According to court documents, Furan violated the original court order in every respect. Furan continued to place ads on the Internet and fake his credentials and companies that he claimed to own and operate. He repeatedly told the Attorney General’s Office that the actions taking place after the order was issued were actually done on behalf of a licensed real estate broker. However, the real estate broker said he had no knowledge of – and did not consent to – any of Furan’s actions and that he merely rented Furan office space.
Among the allegations in the contempt proceedings:
- One of Furan’s ads on Craigslist falsely read: “Property Management Company taking on more units, We are legal!!! (sic)” In fact, his property management company was not legally constituted.
- Other ads described non-existent real estate investment partnership opportunities to solicit business from unknowing investors.
- Furan paid for a toll-free number which he used to attract potential investors through a message containing false and fraudulent claims. Furan had hired a potential investor to provide the voice for the message, and then failed to pay her the agreed upon $350.
- Furan created a prospectus for a company called Vision Properties/Rent to Own Properties, Inc. that – again – was filled with false information (i.e. claiming to employ a real estate broker, agent and property management expert).
Furan is also facing a charge of Grand Larceny in the 3rd Degree (class D felony) for selling two Niagara Falls properties over the Internet to a buyer from England, using the money to pay off various debts and never providing the titles to the properties. According to the Felony Complaint, Furan sold a property on Linwood Avenue for $19,000 to an investor from England. However, Furan did not own the property at the time of the sale, as it had already been foreclosed when it belonged to his wife. Furan also sold a property on 18th Street to the same investor for $32,000 without ever transferring the title. Grand Larceny in the 3rd Degree carries a maximum prison sentence of 7 years.
“This case underscores the need for consumers to be extra cautious when doing business online,” said Attorney General Cuomo. “My office has repeatedly uncovered schemes in which consumers are preyed upon with false investment opportunities and ultimately end up losing their money.”
Attorney General Cuomo’s office offers consumer tips at www.ag.ny.gov/bureaus/consumer_frauds/tips.
The original matter was referred to the Attorney General’s Office by Buffalo Mayor Byron Brown’s Anti-Flipping Task Force (AFTF), which monitors the Internet for individuals seeking to flip properties in the region.
The criminal contempt and Grand Larceny charges are merely accusations and Furan is presumed innocent until and unless he is proven guilty.
Details of Furan’s original scheme can be found at www.ag.ny.gov/press-release/attorney-general-cuomo-stops-another-fraudulent-western-new-york-house-flipping-scheme.
The contempt case is being handled by Assistant Attorney General James M. Morrissey of the Buffalo Regional Office under the supervision of Assistant Attorney General In-Charge Russell Ippolito. The Grand Larceny charge is being handled by Assistant Attorneys General Michael McCabe and Paul McCarthy of the Buffalo Regional Office under the supervision of Deputy Bureau Chief of the Criminal Prosecution Bureau Richard Ernst.