A home in Douglaston, Queens, estimated to be worth more than a million dollars, has become the focal point of a showdown between city officials and a trio of real estate speculators accused of predatory practices and fraud.
Through an LLC called The Queens Foundation, one of those speculators had acquired interests in the property for a few thousand dollars. But this summer, a Queens Surrogate Court judge nullified the deed sales through which the operators claimed partial ownership of the house. The judge sided with the borough’s Public Administrator who argued that the speculators bought the house from two relatives who were only distantly related to the house’s deceased owner and who were not the true inheritors to the property.
A lawyer for the speculators said they would not appeal the decision.
Even so, the counsel to the Queens Public Administrator, which manages the estates of people who die without wills, told THE CITY that his office has decided to keep the case open. As it assesses whether the estate suffered any damages as a result of the actions of the speculators, the public administrator plans to conduct depositions next month to delve into allegedly forged signatures that were used in the sale of the Queens house and of other properties.
In July, shortly before the judge’s decision to vacate the deeds, THE CITY published an investigation revealing how the ring of real estate investors behind The Queens Foundation and many other generically named LLCs operate.
Targeting rapidly gentrifying neighborhoods, the speculators scoop up homes left by owners who died, usually without wills, often paying well below market value to out-of-state heirs, who may not know the value of their relative’s properties. In many cases, the investors — Etai Vardi and brothers Elliot and Joseph Ambalo — go to court to evict tenants living there and flip the properties, often for many times what they paid the heirs. THE CITY found over 100 properties acquired in whole or in part by the trio’s companies and eviction filings by their LLCs naming 160 residents.
In the speculators’ deed sale filings, THE CITY’s investigation also found six signatures that were attributed to five notaries and one heir in states across the country. But all six signatures appeared almost identical. Four of those notaries told THE CITY they did not sign or recognize these signatures.
In a phone call, Gerard Sweeney, counsel to the Queens Public Administrator, said that unless his agency resolves the case, his team intends to depose the businessmen about these six apparent forgeries.
According to court documents, the Queens Public Administrator is scheduled to hold its first deposition on the morning of Nov. 8, and must serve subpoenas for non-party witnesses, such as notaries or title company employees, for examinations that must take place before Nov. 15.
Darlene Wong, a California-based notary who previously told THE CITY that her signature had been forged, said the judge’s July order vacating the deed sales felt like vindication.
“Knowing that the judicial system has stepped in, they did set this aside, it makes me vindicated, it makes me feel good,” she said. “These guys can’t do this stuff. They can’t get away with it.”
Reached by phone, Etai Vardi, one of the speculators, declined to comment, but his associate Elliot Ambalo denied that he, his brother or Vardi fabricated the signatures.
“I guarantee you that none of us did any fraud, caused any fraud to be done, none of that,” he said on a phone call.
For the first time in his communications with THE CITY, Ambalo also named and blamed a former associate, who he claimed had recorded the documents with the apparent forgeries.
That former associate did not respond to a request for comment about Ambalo’s allegations left in a note with his wife at his home in Brooklyn.
The Queens Public Administrator says it is now preparing the Douglaston house in for sale. Real estate listings show the house is under contract, as of earlier this month.
Another Push To Vacate Deeds
The Queens Public Administrator is pursuing another case in surrogate court against QN 48 LLC, a company run by Elliot Ambalo and Vardi, that could result in more vacated deeds.
In that case, the public administrator alleges that the LLC claimed ownership to a property based on “fraudulent deeds.”
According to deed documents, the speculators bought several shares of a three-story, six-unit building located in Astoria, assessed at over a million dollars by the city.
The businessmen paid less than $300,000 to more than two dozen of the deceased home owner’s family members living in Germany, France, Brazil and upstate New York.
But, the administrator alleges, those people were not the proper heirs and did not have the right to sell their share of the deeds.
Edward Vincent, a lawyer representing the investors and the LLC they used to make the purchases, filed papers moving to dismiss. He declined to comment on the pending litigation.
The investors conducted meticulous research to locate the rightful heirs, Elliot Ambalo said, but acknowledged how complicated that can be.
“This is very, very complex stuff,” he said. “It’s not so clear cut.”
Several law enforcement agencies also appear to have taken interest in the fraud allegations stemming from Vardi and the Ambalo brothers’ real estate dealings.
In July, shortly after THE CITY reached out the New York Attorney General’s Office for comment, a prosecutor there contacted an attorney representing the woman in California whom Vardi’s LLC paid claiming she was an heir to the house in Douglaston.
In an interview the same month with THE CITY, Daniel Ifraimov, the CEO of a title company listed as having worked with the businessmen in deed paperwork, said he had been contacted by the FBI “on some of” the transactions that Elliot Ambalo “has done.”
The New York Attorney General’s Office and the FBI’s New York field office did not respond to requests for comment for this story.
In a phone call this month, Elliot Ambalo said he had not heard about the FBI reaching out to Ifraimov.
“I operate to the letter, to the T,” he said. “Everything I do is within the law, 100% legal.”