An NYPD cop who prosecutors have accused of stealing a townhouse in Bedford-Stuyvesant through a fraudulent deed transfer is striking back, announcing her plans to sue the city for false arrest after a judge threw out some but not all of the charges against her.

Police arrested veteran NYPD beat cop Blanche O'Neal, 46, last year on charges of possessing and filing forged documents, grand larceny, and perjury, alleging that she carried out the bogus purchase of the abandoned property from one of the heirs to the deceased owner, claiming he was the "sole heir," and later lied to a grand jury by saying she was the owner of the house. In March, a judge threw out three of the four charges against her, leaving only the perjury charge, which stems from a grand jury proceeding where she testified as a prosecution witness against a burglar.

In a suit claiming misconduct by the city, O'Neal's lawyer Eric Sanders emphasizes that she is African American and a resident of Bedford-Stuyvesant, which the notice, the prelude to a lawsuit, describes as an area "undergoing significant gentrification with African-Americans and other persons of color losing their homes to unscrupulous Jewish investors."

Sanders said that, given the United States's history of denying property rights to African Americans and sanctioning discrimination against them in all levels of housing, race is very relevant to the issue at hand.

"That’s what they’re doing in the neighborhood," Sanders told Gothamist. "Jewish investors are going in and harassing. This is a legal issue about using government to steal property."

Sanders and O'Neal allege that the prosecution is actually an extension of the efforts of the people behind an LLC with a central Long Island address to take over the property by fraud. They claim that the company, 23A Vernon LLC, and its principal, Yotam Michaeli, have concocted fake heirs to the property, doctored a death certificate for its late owner, and improperly acquired a Sheriff's Office investigator's interview notes with O'Neal to bolster their civil case to take the property. The owners have also, O'Neal's lawyers claim, repeatedly sent men to harass O'Neal, at the three-story Vernon house, as well as at the 83rd Precinct where she works, and threatened her livelihood.

The men behind the LLC allegedly said, "'We have contacts with the NYPD and the DA's Office, and if you don't sell to us, it's going to cost you your job,'" Sanders said. "And there's a threat of that happening."

The owner of the building, Lillian Hudson, died in 1993, and O'Neal, who purportedly told an investigator she has lived on the block since 1990, says she began attending to the derelict property around 2003. She claims to have driven out drug dealers and prostitutes and put money into maintaining the place.

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An excerpt from NYPD Officer Blanche O'Neal's notice of claim with the city.

In the late 2000s, O'Neal sued Hudson's estate after tripping on a bicycle in the yard of the building and, she said, breaking her ankle. She had maintained as late as an interview with investigators last year that she was awarded a default judgment for $5 million in that case after a Connecticut man named Colie Gallman failed to appear in court, but it now seems that case was dismissed. Sanders said O'Neal actually reached an informal settlement with Gallman, Hudson's nephew, who O'Neal described in court papers and the deed transfer as Hudson's "sole heir." Under the terms of the purported settlement, Sanders said that she dropped the matter in exchange for buying the house for a token $10,000 in 2012.

"If anything, the lawyers she had then are to blame for not memorializing the settlement in a formal stipulation with the court," Sanders said. "If they had done that, none of this would be happening."

O'Neal has said she lived at the address since at least that year, and has formally evicted about six squatters since then, according to court papers by her lawyers.

The intrigue thickened in 2014, when 23A Vernon was legally registered with the state, and began filing what would become a series of four deed transfers with a series of purported heirs in South Carolina, Brooklyn, Connecticut, and Maryland, signing over fractions of the property for $10,000 each. In competing lawsuits seeking to clear the title, 23A Vernon has produced affidavits saying that O'Neal never spoke to Gallman, who the Sheriff's Office wrote was in his 70s when he died in 2014, but may have spoken to his son, Colie Gallman III, who had no right to sell the property.

In turn, O'Neal's lawyers have tracked down a will from South Carolina written by Hudson's late sister Maggie Gallman, which makes no mention of two of the alleged heirs named by the investors, among a mountain of other documents describing a "massive fraud" being helped along by the tacit or active assistance of people in the Department of Finance, Sheriff's Office, and Brooklyn District Attorney's Office.

Both sides are currently barred from going to the property while the civil case plays itself out. Prior to her arrest last October, O'Neal has said that she took three months off of work with the NYPD because of stress from the dispute, and the investors' representatives popping up on the block, and even at her church, according to her lawyers. She was suspended without pay when she was arrested, but is now back, on modified duty.

"This is a civil matter, not a criminal action," Sanders said. "The DA’s Office is overreaching."

Sanders said that the Brooklyn District Attorney Ken Thompson is afraid to drop the case because of all the fanfare surrounding his announcement of it last year.

"People are invested in their legal position. They won’t admit that they’re wrong on it," he said. "They walk her out in handcuffs, and embarrass the hell out of her. Thompson goes into office says I'm going into office going to clean everything up. Meanwhile, what happens: all the same things. Prosecutorial misconduct."

Reached by phone, Jay Markowitz, a lawyer for 23A Vernon, declined to comment because of the Rosh Hosannah holiday. "I'd be more than happy to talk to you, but not on the second-holiest holiday of the Jewish year," he said.

The Brooklyn DA's Office and Department of Finance declined to comment. 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 last year, right around the time of O'Neal's arrest. "I don't think anyone realizes how big this story is."

The floundering of the prosecution of O'Neal could be seen as demonstrating the difficulty of untangling ownership in such cases.

O'Neal's trial is set for October 19th. She faces as many as seven years in prison, not to mention the loss of her job, and of the house, which is easily worth more than a million dollars. The DA's Office is appealing the judge's decision to throw out her other charges.