Attorney General James Secures Over $6 Million for Brooklyn Homebuyers Cheated by Condo Developer

NEW YORK – New York Attorney General Letitia James today delivered more than $6 million in restitution and purchase credits to New Yorkers who provided down payments on apartments in a Brooklyn condominium building but were left without their homes or money for years. An investigation by the Office of the Attorney General (OAG) found that 425 Marcy, LLC and its principal, Ezra Unger, unlawfully sold units and collected down payments from purchasers at 427 Marcy Avenue in Williamsburg before OAG had accepted the building’s required offering plan for filing. The developer then illegally used buyers’ down payments to pay for various expenses instead of keeping the money in escrow, as required by law. As a result of Attorney General James’ investigation, Unger has agreed to repay buyers, who can either receive their full down payments back with added interest or apply that money toward purchasing their original units once construction is completed under a new offering plan and by a new developer. Unger will also pay $824,000 in penalties and is barred from selling securities in New York for six years.

“When New Yorkers hand over their hard-earned savings for a down payment on a home, that money is not a piggy bank for developers to raid,” said Attorney General James. “This developer broke the law by taking money from families before it was legally allowed to sell these homes, then left them waiting for years with nothing to show for it. My office will continue to hold developers accountable and fight to get New Yorkers their money back.”

Under New York's Martin Act, condominium developers must submit an offering plan to OAG and have it accepted for filing before they can market or sell units. The law also requires developers to place buyers’ down payments in a separate escrow account and keep the money there until the sale is completed. These protections help ensure that buyers can get their money back if a condominium project does not move forward.

The OAG launched its investigation after receiving a complaint that the developer had entered into contracts with buyers even though OAG had never accepted the building’s offering plan for filing. The investigation found that the developer had entered into contracts for 17 residential units, three commercial units, and three residential parking spaces, and collected a total of $6.715 million in down payments from the residential buyers. None of the down payments were placed in a required escrow account. Instead, the developer used the money for construction and other purposes.

The project was further complicated by a series of legal and financial problems. The developer was sued by other parties who alleged, among other things, that it did not own the building and had defrauded the building’s true owners. In January 2023, a bankruptcy case was filed against the developer. As part of the bankruptcy proceeding, Unger lost his ownership interest in the company, and the building was ultimately sold to 33 Walton Holdings, LLC, the new developer of the condominium. The bankruptcy case was completed in April 2025.

Under the settlement secured by Attorney General James, buyers of the residential units can choose to walk away from the purchase and receive a return of their original down payment plus interest, or apply that amount as a credit toward the purchase of the same unit once the new offering plan is accepted for filing. Buyers who remain interested in purchasing their unit will also receive additional protections if the new purchase price is higher than the price in their original contract. The new developer is required to either repay or provide the credit to buyers within seven business days after OAG accepts the new offering plan for filing.

In addition, Unger must pay up to $824,000 in penalties: $324,000 for selling units and parking spaces before the offering plan was accepted for filing and $500,000 for failing to place buyers’ down payments in escrow. Unger is also barred from marketing, offering for sale, or selling securities in or from New York for six years. Unger has also acknowledged that he violated the Martin Act and Executive Law 63(12).

This matter was handled by Chief of Enforcement of the Real Estate Finance Bureau Louis M. Solomon and former Assistant Attorney General Michelle M. Yong. The Real Estate Finance Bureau is led by Bureau Chief Jacqueline Dischell and is part of the Division for Social Justice, which is overseen by First Deputy Attorney General Meghan Faux.