New York Attorney General Letitia James has filed a lawsuit against Jessica Vargas, a resident of Florida, for allegedly attempting to fraudulently claim control over the Housing Development Fund Corporation (HDFC) at 13 Scholes Street in Williamsburg, Brooklyn. The investigation by the Office of the Attorney General (OAG) revealed that Vargas created false documents to assume control of the corporation and collected at least $442,000 in rent intended for the cooperative. She is also accused of trying to sell the building for personal gain.
"Jessica Vargas declared herself president of a building she had no claim to, exploiting New Yorkers for her personal gain while living over a thousand miles away," stated Attorney General James. "What was meant to be affordable housing for New Yorkers has now been manipulated into a Floridian’s personal piggy bank. That is unacceptable."
The 13 Scholes HDFC was established in 1996 as an affordable housing cooperative for low-income residents. All original shareholders have since passed away, and Vargas, who is the daughter of a former shareholder, allegedly exploited this situation. The OAG claims that Vargas falsely presented herself as holding multiple positions within the corporation and aimed to deceive various parties into believing she had ownership rights.
Despite being an administrator of her late father's estate, which held no assets related to 13 Scholes and closed in 2021, Vargas reportedly claimed roles such as President and sole shareholder without legal standing. She allegedly fabricated stock certificates and misreported ownership details to city agencies.
Attorney General James' lawsuit seeks to remove Vargas from any position within 13 Scholes HDFC and impose a permanent ban on her conducting business related to the property or company. Additionally, it aims to recover all misappropriated funds amounting to at least $442,000.
This legal action is part of Attorney General James' broader efforts toward ensuring fair housing practices. Recent initiatives include returning apartments in New York City to rent stabilization and addressing issues with illegal rent increases.
The case is managed by Senior Enforcement Counsel Rachel Hannaford under Housing Protection Unit Chief Brent Meltzer's supervision.