Buffalo, NY - Company Cited for House Flipping Scheme
Buffalo, NY - An investment company that allegedly defrauded investors in real estate transactions has been shuttered through a court order obtained by the state Attorney General’s office.
The order is said to be the first of its kind in the region, according to the AG’s office.
According to court documents, East Coast Capital LLC and its operator, Norman Dansker, bought more than 50 residential properties and had investors provide mortgages that exceeded the distressed properties’ market value.
Investigators said Dansker told investors that the company sold the properties to contractors for rehabilitation and that they would receive a high return from the resale of the renovated property. East Coast Capital then provided short-term bridge loans to the contractors with the investors’ money, based on the supposed worth of the property, the AG’s office said.
The company is said to have paid $1,074,700 for 53 properties in the Buffalo area, and then received private investor mortgages totaling $2,901,500.
The company and Dansker may not purchase investment property nor issue, promote or sell securities in the state unless they post a $1 million performance bond. They also have a money judgment against them for more than $3 million in restitution to be paid to the defrauded investors.
Actions are still pending against consulting firm IMA Equities Inc. and its owner Moshe Freidlander as well as JD Realty & Management Inc. owners Elizabeth Doucette and her children, Joshua Doucette and Jessica Doucette.
Over 40 of the properties owned by either East Coast Capital or Jessica Doucette were cited for various building code violations. Doucette failed to appear at multiple court appearances and was briefly imprisoned last year.
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