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NYC developers barred from selling condos as part of fraud settlement

By Ashley Perry | Oct 15, 2014

Attorny general eric t schneiderman
New York State Attorney General Eric T. Schneiderman | The Office of Attorney General Eric T. Schneiderman

Attorney General Eric T. Schneiderman reached a settlement on Tuesday with developers Joseph Scarpinito and Shiraz Sanjana, and their five collective companies, that bans them from selling securities, including condos and co-ops, in or from New York state.

Scarpinito and Sanjana will also pay $500,000 in penalties and fines to the state.

The settlement agreement was reached following an investigation into fraud allegations and complaints at the Mirada condominium complex in Harlem of water leaks and construction defects. The developers and their attorney, Harold L. Gruber, Esq., allegedly hid their involvement in the development of the property by filing misleading documents with the Real Estate Finance Bureau. The documents stated that Scarpinito's mother was the developer to avoid disclosing Scarpinito's prior federal felony conviction for bank fraud as required by state law.

“Our laws protect purchasers of real estate securities, including condominiums and co-operatives, by requiring sellers to make important disclosures to investors,” Schneiderman said. “The identities and business backgrounds of the people who make or take part in developing and selling a condo is a material fact that a purchaser has a legal right to know. There is one set of rules for everyone, and my office will protect the rights of purchasers and punish unscrupulous developers.”

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New York Attorney General