It’s collection time for accused fraudster Tomer Dafna.
More than two years after the investor and developer was indicted for participating in a mortgage fraud scheme, the industry players Dafna borrowed money from are coming out of the woodwork to recover funds they claim they’re owed.
Two of Dafna’s creditors filed a petition for his involuntary Chapter 7 bankruptcy last week, citing $1.3 million in claims, court records show. But that number could balloon to more than $20 million if the parties behind numerous lawsuits and outstanding judgments against Dafna become creditors.
Dafna and his lawyer did not respond to requests for comment.
Dafna started his career in Brooklyn and Queens a few years before the Great Recession buying homes out of foreclosure and flipping them. Between 2014 and 2019, he and his associates participated in short sales of those underwater properties, documents show.
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According to court records, the developer ran his business through a collection of entities — including Exclusive Homes Realty Group Inc., Homeowners Solutions Group LTD and 5 Borough Construction Management LLC — and often worked with three partners, Isaac Aronov, Avraham Tarshish and Michael Herskowitz.
But in 2019, all four, plus a fifth man, were indicted by the U.S. Attorney in the Eastern District of New York for two counts of conspiracy to commit wire and bank fraud, and five additional counts of wire fraud, for allegedly defrauding homeowners and their mortgage lenders, including Fannie Mae and Freddie Mac. The conspirators allegedly agreed to handle the short sales of homes in foreclosure, but instead sold them to entities they controlled at “fraudulently depressed prices” before fixing them up and reselling the properties at substantial profits.
A 2017 BuzzFeed investigation into the investors’ practices found that in a sample of 31 properties, the vast majority sold for more than four times the price the investors paid. Their success was bolstered by wealthy New Yorkers searching for low-priced homes in up-and-coming neighborhoods and, in part, the marketing efforts of broker Ryan Serhant, who handled sales for 100 of the homes in Bed-Stuy and Bushwick. He documented some of those sales on “Million Dollar Listing New York.” Serhant told BuzzFeed at the time that he didn’t know the homes were bought out of foreclosure.
The case against Dafna and his co-defendants is ongoing. Each man faces a $1 million fine and up to 30 years in prison if convicted.
In the meantime, private lenders are coming after Dafna to recoup funds they say he never repaid.
The creditor who initiated the Chapter 7 petition is Saddak Funding LLC, a Nassau County-based lender that gave Dafna a $400,000 mortgage in 2015 for the redevelopment of a two-story home in Bed-Stuy. Dafna personally guaranteed the loan but never repaid it, the lender claims. Saddak’s lawyer Leo Jacobs said the firm is now owed $800,000.
Jacobs said he’s aware of six other potential creditors, including Brooklyn landlord David Israeli. Court records show that Israeli is seeking over $19 million from Dafna in connection with a lawsuit filed in Kings County Supreme Court in November and a 2019 judgment. Israeli’s lawyer did not respond to requests for comment.
Other potential creditors include developer Joseph Freund, bridge lender Bayport Funding, and lender Amida Financial, which loaned money to Dafna through its fund Amida Special Opportunity Investments, according to ongoing lawsuits and judgments filed against Dafna . Representatives for the companies did not respond or were not available for comment.