Heights man one of 32 parties accused of HUD fraud

0
644
My Ideal Property, a real estate company where a Roslyn Heights man allegedly worked while taking part in a mortgage fraud scheme, was said to be headquartered at Suite 206 of 116-55 Queens Boulevard in Forest Hills, Queens. (Photo courtesy of Google Maps)

A Roslyn Heights man is one of several individuals named in a federal lawsuit that alleges they took part in a mortgage fraud scheme and filed millions of dollars in fraudulent claims to a program run by the U.S. Department of Housing and Urban Development (HUD).

Michael Konstantinovskiy, of Roslyn Heights, is named in the suit, as are Iskyo Aronov of Middle Village, Queens, and Ron Borovinsky of Hollis Hills, Queens, along with 29 separate LLCs and incorporated businesses, the U.S. attorney’s office for the Eastern District of New York announced Monday.

The office said that the three men, operating as part of a realty business called My Ideal Property, took part in HUD’s Pre-Foreclosure Sale Program. Under the program, qualifying homeowners with defaulted Federal Housing Administration-insured mortgages may sell their properties in a “short sale” for less than the balance of the mortgage if the sale is for the fair market value of the property.

If a homeowner obtains approval for a short sale, the lender releases the mortgage after the short sale and submits an FHA insurance claim to HUD to cover the outstanding mortgage balance less the short sale proceeds, plus approved costs and interest. HUD, in turn, pays the lender’s claim from federal funds.

The complaint claims that Aronov was recognized as the founder, CEO and president of My Ideal Property Inc., My Ideal Property Group LLC, and MIP Management Inc., and also controlled other affiliated corporate entities that the court alleges he established to help him fraudulently acquire residential properties.

A 2019 federal case claims that My Ideal Property was founded by Aronov in 2012 and was headquartered at Suite 206 of 116-55 Queens Blvd. in Forest Hills, Queens.

Borovinsky allegedly identified himself as a co-founder of the company, and Konstantinovskiy allegedly worked as an agent for My Ideal Property, where the complaint  alleges he conspired with others to fraudulently obtain properties.

According to the complaint, from at least 2013 through 2016, the defendants defrauded HUD by manipulating the short sale process to acquire residential properties from numerous distressed homeowners for below-fair market value prices in non-arm’s-length transactions.

“The individual defendants used various corporate entities in furtherance of the fraudulent scheme,” the complaint reads. “In the process, defendants made a host of material misrepresentations in critical transaction documents. As a result, defendants not only acquired the properties for below-fair market value prices, but obtained broker fees in the transactions and induced lenders to release the FHA-insured mortgages at a loss. In turn, HUD paid the lenders’ claims for FHA insurance from federal funds. These payments by HUD were artificially inflated as a result of the defendants’ fraudulent conduct.”

“As alleged, these defendants fraudulently obtained homes at depressed prices at the expense of a taxpayer-funded program designed to assist borrowers seeking the American Dream of homeownership,” said acting U.S. Attorney Seth DuCharme. “This office is committed to protecting the integrity of the FHA insurance program from those who try to enrich themselves through predatory mortgage fraud schemes.”

“The defendants allegedly engaged in a scheme of wholesale deception when they provided false, misleading, and incomplete information to lending institutions, homeowners, and the Federal Housing Administration (FHA) causing millions of dollars in damages to the FHA, which typically results in higher premiums being charged to future first-time homeowners. In addition, the artificial devaluation of residential properties will slow the recovery of market values at a time of economic challenge when affordable housing is at a premium,” said Christina Scaringi, special agent-in-charge for the HUD office of inspector general.

The government’s complaint intervenes in a 2019 lawsuit originally brought under the qui tam provisions of the False Claims Act. Under the act, private citizens with knowledge of fraud against the government can bring a lawsuit on behalf of the United States and share in the recovery, with the government permitted to intervene in such actions.

The 2019 suit alleges that Konstantinovskiy and Aronov, among others, defrauded Fannie Mae, Freddie Mac and smaller lenders by providing them with false, misleading and incomplete information to induce them to execute short sales at fraudulently depressed prices, a scheme similar to this one.

The government’s case is being handled by Assistant United States Attorney Michael J. Castiglione, with assistance from Michael Gambrell, an auditor. Attorneys for the defendants have not yet been named.

LEAVE A REPLY

Please enter your comment!
Please enter your name here