Behind agent’s glamour, a litany of financial and legal troubles

Megamansion seller Shawn Elliott has been fending off lawsuits and regulators for years

New York /
Aug.August 20, 2021 07:00 AM
 Nest Seekers’ Shawn Elliott

Nest Seekers’ Shawn Elliott

Three years ago, in a promotional video for a $250 million spec mansion he was selling in Bel Air, agent Shawn Elliott noticed an unusual element as they toured the extravagant property. “What’s going on with these champagne bottles?” he asked the developer, Bruce Makowsky. “They look like fire extinguishers.”

“They are,” replied the builder, who like Elliott was nattily attired in a dark sport jacket and sunglasses. “In case you have a fire in the house, we think you should put it out with champagne.”

Elliott agreed. But behind the glamour and prestige of selling homes to billionaires, he was fighting conflagrations in his own house that no amount of slick marketing could douse. Many began with a debt that would be pocket change for his clients, but blew up because he allegedly lied to creditors, dodged regulators and ignored court orders.

In a typical example, as Elliott was showing off the helicopter-equipped California megamansion, New York state regulators were investigating the broker for alleged fraudulent practices over a $17,845 loan balance.

State regulators had been notified that Elliott failed to repay a $107,000 advance on a sale he brokered. According to the complaint, Elliott “repeatedly and falsely” told his lender the sale had not closed, but when the lender unearthed the transferred deed, Elliott began paying him back. After three years he still owed the $17,845, plus interest, so the lender, identified in public documents as Lawrence Helfant, reported it.

Carol Brimmer, an investigator for the Department of State, began reaching out to Elliott but the broker would not give her documents or be interviewed. It was all a misunderstanding, he insisted. “Call Larry Helfant he promised me he would drop the claim,” Elliott emailed Brimmer in 2018.

After more than a year of being stonewalled, New York revoked Elliott’s broker license in late 2019 for “demonstrated untrustworthiness,” saying he misrepresented a transaction and failed to cooperate with the investigation. Elliott was fined $1,000 and ordered to pay $21,000 to Helfant, who did not respond to a request for comment.

A few months later, in February 2020, the state received confirmation that Elliott had paid and granted him a new license. But it was far from his only incident of that sort.

Court records in New York show a trail of more than 30 legal disputes, mostly related to Elliott’s unpaid bills. He has been found in contempt of civil court orders at least three times. And this summer, two clients accused Elliott is misrepresenting their transactions.

In an email to The Real Deal, Elliott downplayed the cases as part of the ordinary state of real estate brokerage.

“I deal with thousands of buyers, sellers, developers, and vendors across the world and disagreements take place, that’s business,” he wrote. “This is just a silly inquiry.”

Big spender

After founding an eponymous brokerage in 2002 to sell luxury homes on Long Island’s Gold Coast, Elliott made a name for himself by throwing lavish open-house parties at listings, opening an office in a Rolls-Royce dealership and offering his most prolific agents a Mercedes, according to reports and his own disclosure on the networking site Who’s Who in Luxury Real Estate.

He published a quarterly magazine featuring his listings and branched out to luxury markets across the country.

At the end of 2017, Elliott sold his firm, Shawn Elliott Luxury Homes and Estates, to Nest Seekers, becoming a marketing employee at the brokerage and leading its “Ultra Luxury Division,” though he still works as an agent on some deals. He has appeared on most of the big real estate reality shows, including NBC’s “Open House” and Netflix’s “Selling Sunset,” and in 2019 hosted a miniseries in the U.K. on the world’s most luxurious homes.

Meanwhile, court cases piled up. They range from agents alleging Elliott withheld a portion of their commissions to a landlord claiming Elliott reneged on a settlement and owed him about $174,000. A law firm sued for more than $226,000 in unpaid fees and damages, and a commission advance firm was chasing him for $450,000. His personal residences have been in foreclosure three times.

An examination of the bevy of lawsuits suggests that Elliott does not feel compelled to participate in the judicial system or comply with court orders.

Proceedings have ended in most of the cases, and the records do not show if Elliott paid what the courts ordered. TRD attempted to contact firms that tried to recover money from him in New York and found mixed results.

In the $226,000 case, involving Long Island-based law firm the Weinstein Group, lead attorney Lloyd Weinstein said the matter was “amicably resolved.”

But Elliott’s former company still owes $15,112 plus interest to National Arbitration & Mediation, which ran a session for his old brokerage over a commission dispute. Robert Goldhaber, the attorney trying to collect the debt, said Elliott did not pay even after being ordered to by a judge and being found in contempt of court.

In a 2019 suit by Commission Express to recover a $450,000 advance from Elliott, who acknowledged owing the money in a 2016 affidavit, a judge slapped him with a $5,500 penalty and found him and Nest Seekers in contempt.

Elliott did not comment on any specific cases. Commission Express did not respond to requests for comment.

In one of the active cases, Itria Ventures has for years tried to collect $116,160 from Elliott and the brokerage he sold to Nest Seekers.

Elliott does not contest the debt. Nassau County Supreme Court records show he signed an affidavit of confession of judgment a year before Itria sued. But he still hasn’t paid the full sum nor has he appeared for a court examination despite being subpoenaed and being found guilty of civil contempt.

A process server in the case described a series of calls over a four-day stretch last January in which Elliott said he didn’t want to be personally served “because he did not want to be publicly embarrassed at his home or place of business.” But when offered a waiver of service, Elliott did not return it by the deadline. He was ultimately served at Nest Seekers’ Beverly Hills office.

A case filed by Lali Associates, which owned an office rented by Elliott’s former firm, dragged on for 11 years. After taking Elliott to trial over a 2009 lease violation and winning, Lali agreed to settle in 2016. Elliott was to repay Lali under a monthly plan, but in 2017 he defaulted.

That summer the landlord obtained a confession of judgment for $174,109 but its collection efforts were frustrated when Elliott sold his brokerage to Nest Seekers later that year. Lali sued them both in 2019, alleging the deal was a “fraudulent scheme” to sidestep creditors. Late last year the court awarded Lali just under $250,000. Nest Seekers appealed and the parties settled in May.

Eddie Shapiro, CEO of Nest Seekers, declined to discuss the specifics of the cases and said to the best of his knowledge, all disputes have been “settled and resolved.”

“None of these are active or relevant, nor did they ever have anything to do with Nest Seekers,” he said.

Elliott, pointing to the low number of active cases, said he has always been on top of resolving problems.

“One hundred percent of these issues as always have been settled, resolved or are in the process of being resolved,” he said in a statement.

Client complaints

Beyond lingering debts, feedback from two of Elliott’s recent clients raise more questions about conduct.

Last month, commodities trader Steven Berkson filed a complaint with the state against Elliott, fellow Nest Seekers agent Dylan Eckardt and the firm’s CEO Eddie Shapiro. The buyer was upset that his $16.5 million purchase of land in Amagansett had been portrayed in a local paper as a $50 million deal. His complaint blamed the trio for revealing his identity and “grossly” misrepresenting the sale. All three denied wrongdoing.

Meanwhile, Cindy Habberstad was trying to get out of a contract she signed to buy a new condo in Woodbury, New York, from Domus Group.

Habberstad accused Elliott, who was leading marketing at the property, and one of his associates of understating its annual tax burden by $10,000 and subsequently offering her a questionable arrangement to reduce it.

That is, the $1.7 million price would be artificially reduced by $300,000, lowering the property taxes, but Habberstad would pay $300,000 for custom upgrades, known as “extras.” Emails and a letter from Habberstad’s lawyer to Domus’ legal team viewed by TRD corroborate her account.

Extras are typically 5 to 10 percent of the purchase price, said Romer Debbas attorney Michael Romer, who was not involved in the deal. In this case, that would be $70,000 to $140,000.

“But to the tune of $300,000, I don’t see that,” said Romer. “That certainly would be a red flag.”

Addressing the practice generally, attorney Neil Garfinkel, who sits on the state’s Board of Real Estate, said a deed price that underreports what a buyer actually pays is illegal.

“That, to me, is fraud,” he said. “The government isn’t going to get what it’s supposed to get.”

The state’s Department of Taxation and Finance can audit transactions and pursue sellers and buyers for improperly recording a deed, according to Romer. It’s unclear how often it does so. The agency did not respond to a request for information.

Elliott denied any involvement in negotiating the terms of Habberstad’s purchase, saying it was handled by Domus’ attorneys. But Howard Stein, who leads the real estate group at Certilman Balin and represented Domus in the deal, said he had no knowledge of that.

“I was not involved in that negotiation whatsoever,” he said. Stein said the dispute between Habberstad and Domus has been resolved and that a non-disclosure agreement bars either party from discussing it.

That likely gets Elliott off the hook because state regulators only investigate agents when a complaint is filed — and complaints are only made public if the state pursues a case. Even in those cases, making sense of them is difficult for non-professionals. The system is largely used to settle disputes among peers more than to protect and inform the public, according to Stephen Brobeck, a senior fellow and former executive director at the Consumer Federation of America.

Brobeck said the Board of Real Estate is the only state commission where public members account for a majority, yet it still struggles to break out from under the industry’s thumb. Though it can propose rules and regulations, the secretary of state must approve them, and the commission has no role in regulating licensees.

“If New York state cannot regulate this broker adequately, there is little hope for any other state to do so,” Brobeck said of Elliott.

Some time after New York revoked Elliott’s broker license in 2019, Florida and California opened their own investigations. He held broker licenses in both states and their regulatory agencies required Elliott to inform them of the New York case, which he had not. (The agencies were likely tipped off by someone; state licensing authorities do not systematically share information.)

Neither state’s decision has hit public records, but Elliott said California fined him $1,000 and preserved his broker license. Florida’s initial decision went against him, but Elliott appealed and said he has been told he will get his license back.

Whether Elliott’s current and past cases will affect his career is not clear, but in a cutthroat industry where people work on commission, a rule of thumb is that anyone who can sell will always find work.

Ben Bacal, the agent who brought the eventual buyer to Makowsky’s Bel Air estate, said he had some ups and downs working with Elliott during the process but felt he was a sincere person and a hard worker.

Speaking generally, Bacal said any unethical or illegal practices must be stopped, but a peer’s conduct can be hard to judge from a distance.

“If I’ve been wronged first-hand, then there’s not a second chance,” he said. “But I would have to experience it myself.”





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