After years of waging a legal fight over $16 million in escrow funds, buyers at The Rushmore Condominium On Riverside Boulevard learned that an imposter pretending to work for Extell Development gained access to personal information stored in those same escrow accounts at Bank of America, The Real Deal has learned.
Stroock, Stroock & Lavan, the Manhattan-based law firm, and escrow agent for the Rushmore, warned buyers in a November 14 letter that the fake employee got a copy of the master account statement, which contained the amount of the individual deposits and the last four digits of the buyers’ social security numbers or tax ID numbers. “We learned last week that a copy of the current statement of the bank master account for the Rushmore was provided to an imposter using the name of an actual employee of Extell Development Co.,” Stroock attorney Bruce Schneider wrote.
The letter, a copy of which was obtained by The Real Deal, stated that the Federal Trade Commission, the New York State Attorney General’s office and other law enforcement authorities were notified of the breach. The letter said that no unauthorized disbursements have taken place, and that the numbers of the master account and sub-accounts have been changed.
Buyers were told to beware of personal mail, email or telephone scams from anyone trying to get personal information, and said any correspondence from Stroock would come on letterhead that was manually signed by an attorney.
More than 40 buyers have been battling Extell and Carlyle Realty Partners in a long-running court dispute over whether the developer missed a deadline to close its first apartment sale in 2008; those buyers are seeking to get their deposits refunded.
“Had the down-payment monies been returned to the buyers back in April 2010, when the Office of the Attorney General ordered the Developer to do so for breach of contract, this theft of personal data would not have occurred,” said attorney Marc Held, who represents at least one couple that sued the developers over the escrow funds. “Due to this failure, the buyers’ could be facing potentially dire consequences for having their personal information stolen.”
Stroock, the firm that wrote the original offering plan, has claimed that it made a typographical error with the wrong date, however more than four state and federal court judges have ordered the deposits be refunded to buyers. Coincidentally, a state appellate court was scheduled to hear oral arguments this afternoon on the appeal of State Supreme Court Judge Anil Singh’s decision to back former Attorney General (and current New York Governor) Andrew Cuomo, who ordered the developer to return the condo down payments in 2010.
Attorney Andrew Weltchek said the liability for the breach would likely not fall directly on Stroock, but on Bank of America, which was responsible for the escrow accounts. “Unless the bank could demonstrate that this was due to some failure on Stroock’s part, then the liability would seem to me to stop at the bank,” Weltchek told The Real Deal.
Extell declined to comment, through a spokesperson. New York State Attorney General Eric Schneiderman declined to comment. Schneider was not immediately available for comment. A Bank of America spokesman was not immediately available for comment.