Brooklyn man admits to deed and mortgage fraud

A Clinton Hill man pleaded guilty to a deed fraud scheme in which he bagged $775,000, the Brooklyn district attorney said Wednesday.

Derrick Johnson, a.k.a. Jay Rendell, copped to grand larceny stemming from an indictment for a deed fraud scheme involving properties in Park Slope, Bushwick and Bedford-Stuyvesant.

“This defendant filed phony deeds and mortgage documents against multiple properties in a brazen real estate scheme that defrauded homeowners and lenders,” D.A. Eric Gonzalez said in a press release.

The D.A. said the plea “sends a strong message to any would-be fraudsters that we will vigorously pursue justice on behalf of fraud victims.”

But deed theft has been notoriously hard to prosecute because the criminals typically re-sell properties immediately to third and fourth buyers, making it hard for authorities to legally reverse the transactions without proving that all the parties were complicit.

Johnson did not do that. Instead, he borrowed money against the properties, in two cases by fraudulently transferring their titles to entities he controlled, the prosecutor said.

Gonzalez said the investigation found that on Nov. 25, 2020, Johnson fraudulently obtained a mortgage on an apartment building at 349 17th Street in Park Slope by using fake documents to induce a commercial lender to issue him a mortgage of $337,825, which he stole.

Over two weeks in June 2021, acting with an indicted alleged accomplice, Johnson fraudulently transferred title to 1517 Broadway in Bushwick to a shell corporation and induced a different commercial lender to issue them a mortgage of $107,607, the D.A. said.

According to the release, they divided the proceeds, with Johnson taking $50,000 and the rest going to his partner.

The following month, authorities said, Johnson fraudulently transferred title to an apartment building at 323 Malcolm X Boulevard in Bedford-Stuyvesant to a shell corporation that he controlled and induced a third commercial lender to issue a mortgage of $329,332, which Johnson pocketed.

Deed fraud complaints are trending downward citywide, particularly in Brooklyn, which Gonzalez credited to a special effort by his office. Deed fraud complaints in Brooklyn fell from 318 in 2015 to 72 in 2021 to 31 last year. Only four were recorded in the first half of this year.

Deed thefts often require a closing, which typically involves skilled operators and unwitting real estate professionals, according to the press release. It was not clear from the release if authorities are training real estate pros and lenders to recognize fraudulent transactions.

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