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AG Urges New York Officials to Make ‘Deed Theft’ an Explicit Crime

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AG Urges New York Officials to Make ‘Deed Theft’ an Explicit Crime

Under current law, state and county prosecutors are bound by statutes of limitations and forced to rely on charges, like grand larceny, that do not take into account the magnitude of the crime, officials say.

Adi Talwar

Homes on Tomlinson Avenue in Morris Park, The Bronx.

Attorney General Letitia James’ office is calling on New York lawmakers to make “deed theft” an explicit crime in the state penal code to ease the prosecution of pernicious property thieves.

James’ top deputies discussed the deed theft proposal at a Senate hearing in Manhattan Thursday, where a host of lawyers and victims described the way fraudsters have used deception, forgery and tangled webs of shadow companies to steal homes and evict the rightful owners—overwhelmingly people of color in New York City’s gentrifying neighborhoods.

A “standalone crime of deed theft” would show real estate scammers that the state intends to hold them accountable, said Meghan Faux, the chief deputy attorney general for social justice.

The charge would be an “important signaling device to demonstrate the legislature’s intent that this conduct be treated criminally and not hope that prosecutorial creativity will suffice.”

Under current law, state and county prosecutors are bound by statutes of limitations and forced to rely on charges, like grand larceny, that do not take into account the magnitude of the crime, Faux said.

“Although property value is important, there are other factors, such as whether the home was the victim’s primary residence, whether the victim was a vulnerable person, which should decide the severity of the crime,” Faux said in a prepared testimony.

The Attorney General’s Office is currently investigating “dozens” of cases statewide, but does not have capacity to take on many more of the work-intensive probes, Faux said. The New York Times reported in July that the office was only prosecuting three cases.

Strengthening other existing laws, like revealing the owners behind opaque limited liability companies, will also help hold scammers accountable, officials said.

Rod Murphy, the chief of the attorney’s general’s Public Integrity Bureau and Real Estate Enforcement Unit, recommended bolstering rules for notaries—“the first line of defense with respect to combating deed theft”—by forcing them to compile more information from buyers when signing for property transfers. Murphy also urged the legislature to require courts to freeze evictions when there is a pending investigation or lawsuit alleging deed theft.

“Doing so not only limits the potential damage of deed theft, it also puts the homeowner in a better position to assert their rights and stay housed,” he said.

Deed theft is particularly prevalent in Brooklyn, where speculators who exploit owners in tough financial straits can flip homes for enormous profits. The Brooklyn District Attorney’s Office has indicted 27 deed fraud cases, some of which included multiple properties or defendants, since 2014. All have ended in a conviction or are still pending, according to office data.

Deed theft cases that feature forged documents provide a clear-cut example of fraud, but perpetrators often use more ambiguous practices, like misrepresentation or offering to settle an owners’ debts without following through. Many cases can be difficult to prove because the transfers involve multiple family members, because there is no paper trail or because some money was exchanged, said Brooklyn DA Eric Gonzalez.

“We comprehensively investigate every allegation we receive using every tool at our disposal, but in most cases, there is insufficient evidence to prove a crime,” Gonzalez said. 



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