Attorney General Cuomo Stops Another Fraudulent Western New York House-flipping Scheme
ALBANY, NY (August 2, 2007) – Attorney General Andrew Cuomo today filed suit against a Niagara Falls man who attempted to defraud investors through an eBay house-flipping scheme that involved properties in Western New York.
“This individual tried to pull a modern-day bait-and-switch scheme over the Internet,” said Attorney General Cuomo. “He’s a con artist with a computer, trying to lure investors into what was a massive pattern of lies and deceit. With this suit, we’re seeking to shut his fraudulent operation down for good.”
Joseph Furan, 39, of Lockport Rd., Niagara Falls, falsely claimed to be a distressed property flipper to real estate buyers. He advertised properties on eBay, claiming he owned them. In actuality, he was using the ads to spur interest with potential buyers and get them to make contact with him. Once they did, he would attempt to solicit money from them in order to actually purchase distressed properties.
The Attorney General’s suit accuses Furan of fraud and seeks to ban Furan from selling any real property in New York over the Internet unless he pays a $100,000 bond. The suit seeks to ban Furan from engaging in the sale or promotion of any securities to prevent him from attempting to solicit investments from others, and pay $2,000 in costs to the state. The 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 suit was assigned to Justice Kevin M. Dillon with an August 23 return date.
Furan, who has an expired real estate license, falsely claimed to own more than 20 properties. For example, Furan posted an ad for a fictional property at 1800 Weston Ave. in Niagara Falls. The photo in the ad was actually for a property located at 1517 North Ave. in Niagara Falls.
In the advertisements, Furan claimed his company, Rent to Own Properties, LLC, “is a full service real estate investing/real estate sales/property management/construction company located in Niagara Falls New York (sic).” He also claimed, “We have access to all of the great deals, because of our reputation in the area of Niagara Falls and Buffalo New York (sic).” There is no such company, and Furan does not own any business. Plus, his “access” came from the same multiple listing service which is generally available to any real estate agent.
In a separate ad, Furan claimed another company, R.E. Investing Properties, had over 30 years combined experience in real estate. Again, no such company exists and Furan is inexperienced in real estate matters.
After reviewing all of Furan’s postings, the Attorney General’s Office issued a subpoena, which was originally ignored. Furan complied only after a motion was filed, and then falsely testified in a sworn statement that he owned two of the posted properties. In actuality, Furan lost the properties through foreclosure in 2006. Attorney General Cuomo said Furan’s scheme is symptomatic of an expanding trend of real estate scams – luring out-of-state buyers into making house purchases – sight unseen – with deals that often appear too good to be true.
“Unfortunately, most of the time these deals are indeed too good to be true, and many buyers are left making no profit and owing even more,” said Attorney General Cuomo. “Thanks to the coordinated efforts between my office and the Mayor’s Anti-Flipping Task Force, we are going after individuals who attempt to prey on unsuspecting buyers for selfish profit. Schemes involving fraudulent house-flipping are serious matters that bring blight and urban decay to cities, and my office continues to work with the city to root out the problem.”
Buffalo Mayor Byron Brown said, “With the combined efforts of the Anti-Flipping Task Force and Attorney General Andrew Cuomo’s office, another flipping scheme has been averted. We have seen in the past the devastating effect that fraudulent flipping has had on Buffalo, and now we are catching people before they have the opportunity to cause similar damage. Also, the public has been tremendous in helping the AFTF in our efforts to stop fraudulent flipping. I am confident this momentum will continue, and that together we can put an end to fraudulent flipping in Western New York and continue the work of rebuilding our neighborhoods into safe and livable environments for our residents.”
AFTF Coordinator Kathleen Lynch said, “We applaud Attorney General Andrew Cuomo and his Assistant Attorney General Jim Morrissey for their tenacious pursuit of legal actions that target fraudulent real estate scam artists. Aggressive law enforcement is key to ending destructive flipping practices that destabilize our communities and we are privileged to partner with the Attorney General in this effort.”
Assemblyman Sam Hoyt, Co-Chairman of the AFTF said, “I applaud Attorney General Cuomo for taking a strong stance against house-flipping. As a founder of theAnti-Flipping Task Force and a leader in the Legislature on this issue, I understand how house-flipping devastates neighborhoods and kills economic development. Showing ‘flippers’ that what they are doing is illegal, and that there are serious consequences, is an important step in halting this ruinous practice.”
Senator William Stachowski, Co-Chairman of the AFTF said, “The Attorney General has proven himself once again to be a strong partner in our effort to end illegal property flipping in the City of Buffalo and Western New York. Through the hard work of the AFTF and Andrew Cuomo and his staff we’ve brought to a halt another scheme designed to defraud investors and destroy neighborhoods. I hope we’ll continue to see the Attorney General make announcements like this in the months to come.”
Assemblywoman Francine DelMonte said, “People who engage in house flipping contribute to a community’s decay. I appreciate Attorney General Cuomo’s aggressive action on this particular matter and applaud Mayor Brown’s Anti-Flipping Task Force for bringing it to his attention.”
Senator Antoine Thompson said, “I appreciate Attorney General Cuomo’s strong leadership and efforts to crack down on property investors that contribute to the destruction of neighborhoods within Western New York.”
Senator George Maziarz (R-C, Newfane) said, “Reinvesting in older houses can often have a positive result, but as in any area of business, there are unscrupulous individuals out there just looking to make a quick buck. I commend the Buffalo officials and the Attorney General’s office for recognizing this problem and taking action. We need to do all we can to protect homebuyers and taxpayers, and that starts with rooting out the shady dealings of people like Mr. Furan.”
Michele Johnson, a housing court liaison, community activist and cofounder of the AFTF, said, “Buffalo will not be known as the city where you can scam and flip properties. It doesn’t matter where you hail from – whether it be Buffalo or abroad – if you participate in the fraudulent flipping of properties, we will come after you.”
The case was handled by Assistant Attorney General James M. Morrissey of the Buffalo Regional Office under the supervision of Assistant Attorney General In-Charge Russ Ippolito.