The New York Department of State, the agency that licenses and oversees real estate brokers, opened an administrative investigation today into Marcus & Millichap Real Estate Investment Services, in response to accusations of fraudulent and sham sales in a lawsuit filed in California earlier this month.
The investigation was a preliminary action to determine whether there was cause for bringing any formal charges against the California-based company or its brokers, said Daniel Shapiro, the department’s first deputy secretary of state.
“An investigative file was opened today… against the licensee, which is the company,” he said but would not provide more detail. According to the Department of State, a brokerage company itself is licensed, as are individual brokers and salespersons.
An investigation could determine there was no wrongdoing, or it could find that punishments ranging from license suspension, revocation, reprimand or a fine up to $1,000 were warranted, Shapiro said.
The Real Deal reported on Monday that New York-based Glen Kunofsky, senior vice president of investments, was one of 10 Marcus & Millichap brokers accused in a California civil lawsuit of conducting fraudulent sales in New York and three other states. The lawsuit also names the company and two other businessmen.
Y. David Scharf, an attorney acting as personal counsel for Kunofsky, said he was not aware of the Department of State investigation, but said the California lawsuit was baseless.
“We believe it has no merit and will be subject to dismissal. Mr. Kunofsky expects to vigorously defend each of the real estate transactions,” he said.
An official with Marcus & Millichap did not immediately respond to a call for comment.