Police arrested nine people yesterday and are seeking two more who Queens prosecutors have charged with stealing houses from at least 10 people in a series of deed theft scams.

The arrests follow a grand jury's indictment of the 11 real estate professionals, as well as two real estate companies. District attorneys charge that the suspects preyed on the homeowners, half of them elderly, as they were deep in debt, promising to help them with their financial situations. Under the guise of setting up the legal framework for some sort of mutually beneficial bailout, the defendants allegedly presented the victims with documents to sign that transferred their deeds to the fraud ring while leaving the victims on the hook for the mortgages. The operation allegedly ran from 2012 to this year.

The investigation started in 2014 when the Queens District Attorney's Office received a series of complaints from homeowners about cold calls from the company Kings Development Group, wherein callers allegedly promised financial assistance. A description on the company's Facebook page reads in part, "Evolved from the 'ordinary' real estate business, Kings Development Group is compromised of several distinct fields that can facilitate all of your needs...Qualified to answer all of your questions and stay dedicated to you through the entire buying or selling process, your specialist will ensure that the process is smooth and stress-free."

Upon obtaining the deeds to those of the buildings that had tenants, the suspects allegedly told the renters they were the new owners and began collecting rents, sometimes through government subsidy programs, or, in at least one case, they allegedly evicted the current tenants and replaced them. Meanwhile, unpaid mortgages in the original owners' names allegedly mounted, along with legal fees for those victims who sought to challenge the taking of their properties.

In one instance, representatives for Kings Development Group allegedly visited their mark while he was hospitalized at a Veterans Administration facility in 2013 for a sickness that ultimately required an organ transplant. The accused shysters allegedly told the man and his wife that they should sign several documents to resolve their financial woes, knowing that in fact they were signing over their home. They allegedly told another victim, a single mother of five whose house was in foreclosure, that she would have to move out as part of the deal, but that they would provide her with another place. When the deal went through, they allegedly placed her in the home of a second victim. That man did not want tenants and evicted the woman and her kids, sending them into a homeless shelter for several months.


Three of the accused are lawyers. Two of them, Michael Herskowitz of Brooklyn and Yariv Katz of New Rochelle, face as many as 15 years in prison on fraud, grand larceny, and criminal facilitation charges. The third, Sanford Solny of Brooklyn, faces as many as 25 years in prison on similar charges, plus possession of stolen property, in this case, houses. The company Yisroel Services Corp. is also being charged.

Shandelle Solny of Brooklyn and Domingo Fernandez of Manhattan are still at large.

Court records show that this is not the first time some of the defendants have been accused of business malfeasance. Assaf Moshe of Queens is currently the target of five separate lawsuits by banks in state court.

In 2009, a federal class action lawsuit accused a man by Katz's name of taking part in a student-loan investment company defrauding its investors by hiding $150 million in debt and cooking up a fake $200 million securities transaction with Merrill Lynch to conceal its problems. A judge dismissed that case with prejudice in 2011.

Sanford Solny was reportedly the broker representing the shadowy owners of a troubled rent-stabilized building in Crown Heights, who were trying to undercut an attempt by activists to fix up the building and make it permanently affordable

Steinberg, a lawyer and Solny's nephew, is the subject of an ongoing state lawsuit by Anthony Dunn, a Brownsville man who claims that Steinberg and a company called Blue Realty & Services Group offered to help him avoid foreclosure by facilitating a short sale. Unaccompanied by an attorney, Dunn says he signed over the deed on his three-family building, got stuck with the mortgage, and only received $3,000, where the record memorializing the transaction shows a payment of $608,000.

The Department of Finance and its sister agency, the Sheriff's Office, have made fighting deed theft a priority since Mayor Bill de Blasio took office.

"No one is talking about it, but we're seeing this every day," Finance spokeswoman Sonia Alleyne told The Nation in 2015. "I don't think anyone realizes how big this story is."

Toby Cohen, a real estate lawyer who represented Dunn, said that at one point in the last few years, deed theft cases made up as much as 90 percent of his practice. He said that he has faced off with Sanford Solny and his associates in 10 or 15 such cases, "And that's just in Brooklyn. Brooklyn is huge, and I'm sure I'm only scratching the surface."

Cohen explained that he believes the Solnys to be the ringleaders of an operation that, like other similar businesses, have been taking advantage of homeowners underwater after the 2008 financial crisis. With all the rights offered by the deed and none of the headaches of making mortgage payments, deed thieves can rent out apartments in a stolen building for years before a bank finishes foreclosing, easily making $100,000 or $200,000 in the process.

"You just walk away making multiples of your investment of a few thousand dollars," Cohen said. "What happens is the original homeowner who took out the original mortgage for $800,000, they don't own the property anymore so they can't sell the property. A lot of times now the valuations of the property are higher than the amount they owe, but they can't sell to make it back, or collect rent to cover the payments."

Sanford Solny has been suspended from practicing law since 2012, for fraudulently obtaining power of attorney over his dying uncle, and transferring $600,000 of the uncle's money to himself to keep from having to split it with other heirs, according to court records. Steinberg tried to help Solny cover up the scheme by claiming to have witnessed the incapacitated uncle hold up a legal pad with the words "you have power of attorney," the records say.

The nine arrestees were arraigned in Queens on Wednesday. Bail for eight of them was set at $100,000-$350,000, and eight were ordered to surrender their passports. Two had posted bail by Wednesday evening. A judge released Nadia Khedu of Queens without bail and set a hearing on prosecutors' $100,000 bail request for today.

Attorneys for the suspects did not respond to messages left seeking comment. A phone number for Kings Development Group was out of service, and an email to the company bounced.

Update 6:20 p.m.:

Roger Stavis, a lawyer for Assaf Moshe, declined to comment on the charges, but said Moshe had posted bail of $350,000 today and been released.