NY AG pushes to criminalize deed theft

Fraud notoriously hard to prosecute, as victims often sign legally enforceable documents

Commercial Real Estate, Crime, Deed Theft
New York AG Letitia James (Getty)

The New York Attorney General wants deed theft labeled an explicit crime, strengthening officials’ ability to nab fraudsters in the property schemes.

Officials from Letitia James’ office last week proposed criminalizing deed theft in the state penal code, City Limits reported. The deputies discussed the proposal during a Senate hearing in Manhattan, which also included strengthening laws around identifying the owners behind limited liability companies to better hold them accountable.

Alleged deed theft can take many shapes. Sometimes, it’s a straightforward case of forged documents. Other times, it’s more ambiguous, with fraudsters tricking homeowners into handing over their deed in exchange for an offer to settle the debt on a home. The debt doesn’t get paid and the owners are saddled with it, leading to foreclosure.

Claims of deed theft are notoriously difficult to prosecute, as intent needs to be shown and victims often sign legally enforceable documents. Defendants, therefore, can claim their actions were simply business deals gone bad.

Additionally, prosecutors are often unable to take action due to the statute of limitations, which can expire before victims even know they’ve been scammed. Prosecutors often resort to other charges like grand larceny, which don’t necessarily capture the scale of the deception.

Sign Up for the undefined Newsletter

Read more

Civil lawsuits are the best chance for a victim to reclaim their title. The preponderance of alleged thefts in poorer neighborhoods, however, makes lawsuits an uphill climb for those who can’t afford representation.

In Brooklyn, the borough’s DA has indicted 27 cases of deed fraud since 2014. All of those cases are either pending or resulted in convictions.

The scale of the problem is less known in other boroughs, but there were more than 3,300 deed theft complaints from July 2014 to this February, according to the Department of Finance. James’ office claimed to be investigating “dozens” of cases in the state, but doesn’t have the bandwidth to tackle more intensive probes.

Sometimes, the city is lending a helping hand to alleged deed thieves. Former Brooklyn attorney Stanford Solny profits from a 19-property portfolio acquired via disputed means. City agencies are contributing to his profit, subsidizing the rent at some of those properties, including through affordable housing vouchers.

Holden Walter-Warner