Attorney General James Announces Lawsuit Against Managing Agent For Allegedly Defrauding Elderly Residents of Co-op

Suit Seeks Compensation for the Cooperative of More Than Half a Million Dollars and a Court Order to Remove Defendants as Managing Agent

NEW YORK -- Attorney General Letitia James today announced a lawsuit against Joshua Prottas, Working Realty, Ltd., and Midwood Coop Group, LLC, for abusing his position as the managing agent of a cooperatively-owned apartment building in Midwood, Brooklyn (the “Cooperative”) to defraud the primarily elderly shareholders on the sale of seven of the Cooperative’s apartments to Prottas and his entities. Joshua Prottas, doing business as Working Realty, Ltd., is the longtime managing agent of the Cooperative.    

“Taking advantage of elderly New Yorkers is particularly egregious,” said Attorney General Letitia James. “Instead of acting in the best interests of the Cooperative and its residents, the defendants allegedly scammed these individuals and used the funds for personal gain. We will never tolerate that behavior in our state.”

The suit alleges that Prottas – who wielded total control over the Cooperative’s finances and who the Cooperative’s elderly board members trusted and relied on – orchestrated a sale of the Cooperative-owned apartments to Midwood Coop Group, an entity controlled by him, for his own profit, in flagrant violation of his duties to the Cooperative as its managing agent. The complaint alleges that Prottas was able to obtain a below-market sale by withholding material information from and misrepresenting details about the transaction to the elderly board members. The Attorney General’s investigation also revealed that Prottas allegedly hid a $100,000 commission that he collected from the sale. He attempted to conceal his fraud by manufacturing false documents, which he passed off as legitimate to the Cooperative’s accountant, and also filed false documents with the New York City Office of the Register. 

The complaint also alleges that Prottas exploited the Cooperative for his own financial benefit in other ways, such as by lending to the Cooperative at predatory interest rates and taking an unauthorized increase in his management fee.       

In its filing, the Attorney General seeks restitution and damages for the Cooperative, disgorgement from the Defendants, an order enjoining Prottas and Working Realty from acting as the Cooperative’s managing agent or broker, and other appropriate injunctive and equitable relief.   
  
This matter is being handled by Assistant Attorney General Hanna Baek and Enforcement Section Chief Louis M. Solomon in the Real Estate Finance Bureau. The Real Estate Finance Bureau is led by Bureau Chief Brent Meltzer and overseen by the First Deputy Attorney General Jennifer Levy.  

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