Woman Allegedly Stole from Williamsburg Low-Income Tenants

In a scheme spanning several years, a Florida resident allegedly orchestrated a fraudulent takeover of a low-income housing cooperative in Brooklyn, stealing hundreds of thousands of dollars while leaving the building in financial distress.

New York Attorney General Letitia James filed a lawsuit yesterday against Jessica Vargas for falsely claiming control over the Housing Development Fund Corporation at 13 Scholes Street in Williamsburg. The building was established in 1996 as affordable housing for low-income New Yorkers.

According to investigators, the scheme began after all original resident shareholders of the cooperative had passed away. Vargas, the daughter of a former shareholder, allegedly exploited the situation, despite having no legal claim to the property.

Although Vargas was once the administrator of her late father’s estate, it never contained any assets related to the building and was closed in 2021. Despite this, Vargas began representing herself as the cooperative’s president, secretary, treasurer and sole shareholder.

To solidify her fraudulent control, Vargas allegedly created false stock certificates and filed misleading ownership information with city agencies. She then established an invalid lease agreement with a private company, through which she collected at least $442,000 in rent payments that should have gone to the cooperative.

While diverting these funds for personal use, Vargas neglected the building’s financial obligations, according to the complaint, failing to pay over $40,000 in property taxes and more than $3,000 in water bills. This left the once-stable affordable housing cooperative in significant debt.

Vargas then attempted to sell the entire building to generate additional personal profit, despite having no legal right to do so, according to the complaint.

Attorney General James is seeking to remove Vargas from her fraudulently claimed position, ban her from conducting any business related to the property and recover the misappropriated funds.

“Jessica Vargas declared herself president of a building she had no claim to, exploiting New Yorkers for her personal gain while living over a thousand miles away,” James said in a statement. “What was meant to be affordable housing for New Yorkers has now been manipulated into a Floridian’s personal piggy bank. That is unacceptable.”