NYC speculator ring accused of fraud in $10M flip business

Two brothers and their business partner are accused of buying up properties from underneath unsuspecting homeowners and flipping them for profits with maneuvers that are morally dubious at best and unlawful at worst.

Elliott and Joseph Ambalo, along with business partner Etai Vardim, appear to be targeting homeowners in Black and Latino neighborhoods with their speculation plans, some of which lead to possible fraud, The City reported. 

The business strategy sees the ring find heirs of property owners who died without a will, many of whom are so far removed that they don’t necessarily realize a property’s worth or value to the person living there. The Ambalos convince the heirs to sell their fractional ownership, gaining enough control to become primary owner and evict the tenant, only to then flip the home for big profits.

To do this, the ring is uses generically named limited liability companies, further obscuring their activities. This has allowed them to grab 119 properties across New York City, according to The City. About a third have been subject to eviction or removal notices, though the speculators sometimes failed to register ownership with the city prior to beginning eviction proceedings.

Overall, the ring has ponied up at least $4.8 million to buy fractional ownership of city properties. They’ve managed to flip those shares to new owners for a $9.5 million profit, not including other expenses.

“The purchase of fractional shares of properties is a long-standing, lawful business practice in the real estate industry,” Vardi told The City in an email, claiming the partners operate lawfully and ethically.

That’s debatable. On the website for their business, Premier Property GRP, the brothers claimed to be licensed brokers, a claim they later acknowledged in dispositions was false before it was ultimately removed from the site.

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They’ve also faced allegations of fraud or forgery from multiple heirs and notaries public. An assistant attorney general from Letitia James’ office has taken an interest in the accusations, which have also drawn the attention of the Queens County Public Administrator.

“Sadly many individuals are not prepared and the beneficiaries are not educated on the topic,” Compass broker Heather Domi told the outlet. “There should be education and awareness around these assets to protect these vulnerable individuals.”

— Holden Walter-Warner