The U.S. Department of Housing and Urban Development (HUD) said Tuesday it has charged a group of businesses and individuals in a scheme to deceive financially distressed homeowners into forfeiting the titles to their homes.
The Charge of Discrimination filed by HUD’s Office of Hearings and Appeals accuses seven businesses or organizations and six individuals of discriminating against New York City homeowners on the basis of race, color, or national origin, in violation of the federal Fair Housing Act.
The defendants include Homeowner Assistance Services of New York (HASNY); Springfield Realty of New York; Martin Development and Management LLC; Launch Development LLC; 272 Milford Street LLC; Advill Capital LLC; and Petermark II LLC, as well as Amir Meiri; Herzel Meiri; Ron Meir;, Rajesh Maddiwar; Yudhamann Prashad; and Jacob Samra.
The charge was filed on behalf of seven homeowners whose names were withheld.
According to the charge, HASNY, which is owned by Amir and Herzel Meiri, and its associates targeted the homeowners for “fraudulent mortgage and foreclosure prevention assistance” by filing illegitimate liens and using telemarketing to convince them to engage with HASNY for refinance assistance. The company marketed itself as offering “foreclosure avoidance services,” the charge states.
“After the homeowners accepted their offer of assistance,” the charge states, “they used false promises of legal assistance, reassurances, and outright lies to convince the homeowners to sign documents that unknowingly sold their homes to Martin Development LLC and Launch Development LLC, which resulted, for most, in efforts by Herzel, Amir, and Ron Meiri to force them to vacate their homes.”
The charge continues, “HASNY’s actions were disproportionately concentrated in neighborhoods which had a high majority of persons of color, specifically persons who are Black and of Caribbean descent.”
The charge says HASNY also used “affinity marketing” to “gain the trust of elderly, vulnerable, and distressed homeowners by employing telemarketers who brought up their shared national origin and utilized cultural practices to build relationships and trust with the homeowners.”
The U.S. Department of Justice has previously filed criminal charges of bank and wire fraud against Herzel Meiri, Amir Meiri, Rajesh Maddiwar, and several other HASNY employees, stemming from the conduct alleged in the HUD charge. Herzel and Amir Meiri pleaded guilty, while Maddiwar was convicted after a jury trial and later disbarred for his involvement.
The Fair Housing Act prohibits entities and individuals involved in real estate-related transactions from discriminating in making available such transactions or in the terms and conditions of such transactions because of race, color or national origin, HUD said.
The act also prohibits anyone from making housing unavailable because of race, color, or national origin, and from coercing or interfering with individuals who are exercising their fair housing rights. That includes targeting individuals because of their race, color, or national origin for fraudulent mortgage and foreclosure prevention assistance to gain title to their homes, HUD said.
“It is imperative that we ensure hardworking families, regardless of racial and ethnic background, are protected against all acts of housing discrimination,” said HUD Secretary Marcia L. Fudge. “The Fair Housing Act is the law of the land — and [Tuesday’s] charges shows HUD’s commitment to rooting out these sorts of injustices across the country.”
“Perpetuating a coordinated discriminatory mortgage rescue scam is not only illegal, it is unconscionable,” added Demetria L. McCain, HUD’s principal deputy assistant secretary for fair housing and equal opportunity. “HUD will continue to hold those who prey on homeowners because of the color of their skin or the nation of their origin accountable for violating the Fair Housing Act.”
A U.S. administrative law judge will hear HUD’s charge unless any party to the charge elects to have the case heard in federal district court, HUD said.
If an administrative law judge finds, after a hearing, that discrimination has occurred, the judge may award damages to the homeowners for their losses as a result of the discrimination. The judge may also order injunctive relief and other equitable relief, to deter further discrimination, as well as payment of attorney fees. In addition, the judge may impose civil penalties to vindicate the public interest. If a federal court hears the case, the judge may also award punitive damages to the homeowners.
“The fraudulent and discriminatory actions of HASNY are wholly unacceptable,” said HUD’s General Counsel Damon Smith. “HUD will take action when companies or individuals conspire to defraud homeowners because of their race, color, national origin or other protected characteristic.”
