Sheriff's deputies arrested a man on Wednesday for allegedly stealing a woman's house in Canarsie with fraudulent paperwork, then flipping it to unsuspecting investors.
Hillary Kerman, a retired Board of Education administrator, was in Florida last spring around the time when Kenneth Pearson, 56, allegedly first set eyes on her house on East 85th Street. There was a fire at the two-family house in the early 2000s, and since then it has sat vacant, with Kerman waiting for the right time to sell, she told Gothamist. When she returned to New York—she winters in Florida and now lives elsewhere in Brooklyn—she noticed that she hadn't received the tax bill she usually gets mailed each May.
"I happened to be downtown for something else. so I went over to the Department of Finance to print [the bill]," she said. "I was even going to pay it online and it wasn't letting me go into my account. It was saying, 'Invalid.'"
A clerk told her to try looking up the tax bill in a public-facing database and just mail in a check. But when she went to a computer, the owner of the building was listed as Jean Swilling LLC. She pointed this out to another DOF worker, who in turn directed her to another floor in the agency's office building. From there, she was told to go to the Brooklyn District Attorney's Office. It was late afternoon on the Friday before Memorial Day weekend, so she ran.
Soon it became clear that someone, whoever was behind this LLC, had stolen her house by filing fraudulent paperwork saying that she had sold it for $65,000 that May. The Sheriff's Office and Department of Finance have made fighting deed fraud a priority under Mayor de Blasio. But despite a series of measures put in place in 2015 to increase scrutiny of deed transactions, Kerman says that Finance failed to notice that the name on the transfer, "Hillary Sherman," didn't match hers.
At first, as prosecutors and a Sheriff's Office detective worked to piece together the case, Kerman was out at the house nearly every day to check on it. As they were preparing subpoenas, in June, though, she went out of town. Around the Fourth of July, she says she went to check the mail at the house and found dumpsters sitting out front. It was nighttime, and after fumbling to download the flashlight app for her phone, she peered in. The entire inside of the house had been gutted.
"They knocked out all the walls," she said. "It's a nightmare."
The fire had not done a huge amount of damage, and afterwards Kerman had been too busy with work to sort out all of her belongings, so she did it little by little, staying with a friend and an aunt before finding her own place, and leaving a lot of vital documents in the old house indefinitely. Now everything she had stored inside was missing.
"It was, like, bare," she said. "Everything I owned in my life was gone."
"I had my wedding album, my grandparent's wedding album, all my parents' possessions," she continued. "Everything was boarded up and locked. I was the only one who had a key."
Looking around, she saw that someone had also torn out the trees and rosebushes. The two beat-up cars she had parked out back were also gone.
Prosecutors, she said, were surprised the thief had moved so quickly. As the Brooklyn DA's Office says they discovered, Pearson sold the house to would-be flippers just two months after stealing it, for $265,000. The buyers, investors from Long Island's North Shore, bought it without looking inside, according to Kerman. It came cleaned out, Kerman says they said, and they knocked down all the walls to make an open floor plan.
With the property in limbo, Kerman has run all over trying to sort out frustrating details like how to start getting her mail again—it took a signed letter from Brooklyn DA Ken Thompson. The investigation stalled when Thompson died last year and the assistant district attorney assigned to her case left, she said. The investors, meanwhile, are having difficulty getting money from their title insurance company, according to Kerman. One of the buyers, Mark Shahravan, declined to comment, saying he was too busy.
After a grand jury that stretched from February into March, cops finally nabbed Pearson, a resident of Nassau County, on Wednesday. He faces four felony counts, of grand larceny, possession of a forged instrument, and falsifying records. Jean Swilling LLC is being charged with the same offenses. The most serious charge, filing a false instrument, carries 7 1/2 to 15 years in prison. Pearson was arraigned on Wednesday, and a judge set bail at $75,000 or $25,000 cash.
Pearson's lawyer did not return a call seeking comment.
Sorting out the title alone is going to be a costly headache, Kerman predicts.
"It's going to cost me a fortune of money, that I don't have, hiring lawyers to get it back in my name," she said. "I don't even have the deed. It was in a metal box in the bedroom."
Asked what she wants to see come out of Pearson's criminal prosecution, she said, "I'd like to see him get the death penalty but I don't think that's going to happen. I've not been the same since." Thinking about it further, she amended that to say that she hopes he has some money so that she can recoup her losses in civil court.
Deed theft is rampant in New York, in part thanks to rocketing real estate values prompting quick, no-questions-asked sales, as well as online public records databases that allow anyone to research the ownership and finances of properties. Deed thieves often target elderly, absentee, and mentally disabled owners who are behind on their mortgages and taxes. A Department of Finance spokeswoman said the agency has investigated over 1,700 cases of possible deed fraud since the summer of 2014, and is currently looking into 200 cases. Pearson's arrest is the 32nd deed fraud arrest since 2014, she said.
Kerman said she was up to date on all of her payments and doesn't have the foggiest idea how she came to be targeted.
For years, Kerman's neighbors had asked to buy the house at prices she thought were too low. Before news of the fraud had traveled, when her neighbors saw her on the block, they had a common query, she said: "Why did you sell to this random guy? You could have sold to me."