Andrew Cuomo (D)
BUFFALO, N.Y. (Legal Newsline) -- New York Attorney General Andrew Cuomo has obtained a court order shutting down an investment company accused of operating an illegal house-flipping scheme in Buffalo.
East Coast Capital LCC and its owner, Norman Dansker, have been banned from purchasing investment property or issuing, promoting or selling securities tot he public in New York unless they post a $1 million performance bond.
Dansker allegedly solicited private investors by telling them his company bought distressed properties and quickly sold them to rehabilitation contractors. Investors were led to believe that they would receive a high return from the resale of the property.
Cuomo said ECC paid $1.07 million for 53 properties in the Buffalo area and then received private investor mortgages totaling $2.9 million for the same properties. The company would then default on the inflated mortgages.
Ultimately, ECC made hundreds of thousands of dollars while its investors lost large sums of money.
"This company engaged in a scheme that swindled millions of dollars from unsuspecting investors at the expense of Buffalo neighborhoods," Cuomo said. "My office shut Dansker down to prevent him from preying on more investors and this case sends a clear message to those who try to illegally capitalize on urban blight."
There is also a money judgment against ECC for more than $3 million in restitution owed to multiple investors.
The case was brought to Cuomo's office by Buffalo Mayor Byron Brown's Anti-Flipping Task Force (AFTF).
"Norman Dansker and his company have no place in our community, and we are relieved that he is no longer permitted to do business in the state," said Kathleen Lynch, coordinator of the AFTF. "Attorney General Cuomo understands that fraudulent house flipping is not a victimless activity and worked with our office to ensure that the City of Buffalo's housing market is kept solvent."