Three years ago on a wintry afternoon, JJ was sitting in bed in her Bushwick apartment when she heard a boom at the door. It sounded like an intruder was trying to kick his way in.
JJ, who is Black, peered through the peephole and saw three white men in suit jackets. She was afraid. They looked like detectives.
“I opened my door, and I’m like, ‘How can I help you?’” recalled the 42 year-old mother of two, who agreed to speak on the condition of anonymity, citing safety concerns.
That’s when, she said, one of the men introduced himself as “the new owner of the building.”
“I’m like, what? Excuse me?” recalled JJ, who had moved in about seven years earlier and previously paid rent to the relative of a friend living upstairs.
The man told JJ she had a few months to move out. As she stood by bewildered, his two associates were already at work putting new locks on her door.
What JJ didn’t know was that months earlier a group of strangers had indeed acquired title to the house, just a short walk away from the bars and clubs popular with Bushwick’s newcomers. They’d found five far-flung heirs of the property’s deceased owner and convinced them to sell their fractional inheritances for a grand total of $35,500, according to city deed records.
JJ’s home was not their only target. A new investigation by THE CITY has found 119 properties across the five boroughs acquired in part or in whole by companies operated by two brothers, Elliot and Joseph Ambalo, and their business partner Etai Vardi. This crew of speculators nab properties in gentrifying Black and Latino neighborhoods, where many homes are ripe for the taking because their original owners died without wills, leaving a network of dispersed inheritors who may not know the value of their partial shares.
As THE CITY previously reported,
similar rings amass partial shares to shake down longtime homeowners
for money or to profit from forced home sales. But the Ambalo brothers
and Vardi often capitalize on another method: using generically named
LLCs like The Queens Foundation and Jackie 42, they find small,
multi-family homes with minimal tenant protections, take over the
properties by paying heirs low sums, then rush to evict the residents,
clearing the path to flip the properties for many times what they paid.
This ring’s maneuvers, which have displaced dozens of longtime city residents, are largely legal. But in some of their transactions, THE CITY found evidence of possible fraud. One notary public based in California believes that her signature was forged on a deed-related affidavit that Vardi also signed. Four other notary publics across the country said they did not sign or recognize their purported signatures that appear in paperwork signed by Vardi or one of the two Ambalo brothers.
The Ambalo brothers and Vardi rebuffed THE CITY’s attempts to interview them at length in person and on the phone. In response to a detailed set of questions sent to them ahead of publication, Vardi shared a brief statement in an email on behalf of the ring.
“The purchase of fractional shares of properties is a long-standing, lawful business practice in the real estate industry,” Vardi wrote. “We have always and will continue to operate within the law and in an ethical manner.”
Of the 119 properties THE CITY identified, 34 have been the subject of eviction or removal petitions filed by the investors’ LLCs, which named 160 residents they wanted out of their newly acquired properties, according to court records. In 19 of these cases, the speculators failed to register their ownership with city authorities, a violation of New York City’s Housing Maintenance Code, before moving to evict tenants.
In 29 of the 119 properties, city deed records show the investors completed a flip of partial home shares or entire properties. In all, they paid heirs and other property-holders nearly $4.8 million then subsequently sold the shares to new buyers for $14.3 million — a $9.5 million difference.
In many cases, the flips and displacement went hand-in-hand.
Limited Liability Companies Associated with Joseph and Elliot Ambalo and Etai Vardi
135 STREET INVESTORS LLC
153 FOCH LLC
1847 NEREID LLC
19138 115 ROAD ASSOCIATES LLC
229 CLIFTON PLACE LLC
76 ROCKAWAY BLVD LLC
ACTION NO 37 LLC
ACTION NO 53 LLC
BERGEN STREET MANAGING PARTNERS LLC
BK 146 LLC
BK 950 LLC
BK AUTUMN 701 LLC
BK BEVERLEY LLC
BK DEVOE LLC
BK DEVOE STREET LLC
BK MACON LLC
BK ROSEDALE LLC
BK SARATOGA LLC
BK SHEFFIELD LLC
BLACKROCK EQUITY GROUP LLC
BLACKROCK REAL ESTATE GROUP LLC
BLACKSTONE REAL ESTATE GROUP LLC
BROOKLYN GATES LLC
BX 1076 LLC
BX 1331 LLC
BX MULINER LLC
BX ROSEDALE LLC
EAST NEW YORK RLTY LLC
GILLESPIE AVENUE DEVELOPMENT LLC
GREEN BAMBA LLC
JACKIE 42 LLC
KINGS COUNTY FOUNDATION LLC
MACDONOUGH STREET DEVELOPMENT LLC
MANHATTAN FOUNDATION LLC
MN W 152 LLC
NEW YORK ASSET RECOVERY FOUNDATION LLC
NEW YORK ASSET RECOVERY GROUP LLC
NORTH BRONX VENTURES LLC
NORTH BUSHWICK VENTURES LLC
NORTH QUEENS VENTURES LLC
ONE EIGHTEEN 204 HOLDINGS LLC
ONE THREE SEVEN 24 HOLDINGS LLC
ONE TWENTY TWO HOLDINGS LLC
ONE ZERO FIVE 39 HOLDINGS LLC
QN 147 VENTURES LLC
QN 204 LLC
QN 48 LLC
QN NAMEOKE LLC
QN ST ALBANS HOLDINGS LLC
SOUTH BRONX VENTURES LLC
SOUTH JAMAICA HOLDINGS LLC
SOUTH JAMAICA HOLDINGS 2 LLC
STATEN ISLAND VENTURES LLC
THE BROOKLYN FOUNDATION LLC
THE EASTERN AND ATLANTIC FOUNDATION LLC
THE QUEENS FOUNDATION LLC
THE QUEENS FOUNDATION MMXX LLC
