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Robert Nardoza (718) 254-6323 |
FOR IMMEDIATE RELEASE September 16, 2005
PRESS RELEASE
THREE CHARGED IN SCHEME TO DEFRAUD IMMIGRANT FAMILIES SEEKING SUBSIDIZED HOUSING
Victims' Losses Estimated at Between $500,000 and $1,000,000
ROSLYNN R. MAUSKOPF, United States Attorney for the Eastern District of New York, and MARK J. MERSHON,
Assistant Director-in-Charge of the Federal Bureau of Investigation, New York Field Office, today announced the filing of
federal charges against YELENA LITVAK, ALLA MARKOV, and RACH BABANOV for their participation in a scheme
to defraud immigrants from the former Soviet Union by promising them subsidized apartments in the Trump Village III
apartment complex on West 5th Street in Brooklyn.
LITVAK and BABANOV were arrested in Las Vegas on September 7, and at their initial appearances this afternoon in U.S. District Court in Brooklyn, United States Magistrate Judge Marilyn D. Go ordered them released on $100,000 bonds. MARKOV surrendered to the FBI in New York on Tuesday, September 13, and at her initial appearance before Magistrate Go was ordered released on $100,000 bond.
The investigation resulting in the charges was conducted by the FBI's Joint Eurasian Organized Crime Task Force and the New York City Police Department, and coordinated by the United States Attorney's Office.
Trump Village III, a 1,700 unit cooperative housing complex formed in the early 1960s pursuant to New York State's Mitchell-Lama law, provides incentives to landlords to develop low-and middle-income housing. Because of the Mitchell-Lama subsidies, units in Trump Village III are available at rates substantially less than the current market price. For example, a one-bedroom unit in Trump III typically sells for approximately $30,000, rather than the market price of approximately $150,000. As a result, there is a long waiting list to purchase apartments in Trump Village III.
According to the complaint, the defendants introduced LITVAK to potential victims as someone with connections in Trump Village and claimed that she could help them obtain apartments in return for an up-front cash deposit, usually ranging from $7,000 to $10,000, and on occasion up to $50,000. After receiving the deposit, LITVAK would typically write each victim a letter on phoney Trump Village letterhead purporting to confirm the victims' place on the waiting list and requesting the balance of the purchase price for the apartments. In order to prevent exposure of the scheme, LITVAK told the victims that the purchase price for the apartment would be less if they paid her by blank money order, rather than by paying Trump Village with a certified check. After receiving the money order, LITVAK usually told her victims that the apartments were not yet ready and that they would have to make another payment.
Eventually, when victims realized that they had been defrauded and demanded their money back, LITVAK often failed to return their calls or told victims that if they complained to law enforcement authorities they would never get their money back. The complaint charges that LITVAK and BABANOV laundered the proceeds of the scheme through the Foxwoods and Mohegan Sun gambling casinos in Connecticut.
Between December 2003 and the present, LITVAK, MARKOV, and BABANOV defrauded at least 30 victims of amounts ranging from approximately $7,000 to $50,000. The FBI estimates that total amount of money lost by victims is between $500,000 and $1,000,000.
"The Mitchell-Lama law was designed to ensure safe and affordable housing for persons of low and moderate income," stated United States Attorney MAUSKOPF. "The defendants exploited the program for their own personal financial gain and victimized immigrants hoping to become homeowners. We will continue to protect the integrity of state and federal programs from those who aim to take advantage of them for criminal purposes." Ms. MAUSKOPF thanked the Brooklyn District Attorney's Office for its assistance, and stated that the investigation is continuing.
FBI Assistant Director-in-Charge MERSHON stated, "Home ownership is part of the American Dream, and the Mitchell-Lama program was designed to make that dream attainable by people of low and moderate incomes. To line their own pockets, these deceitful defendants exploited the hopes of numerous immigrant would-be homeowners, dashing those hopes in the process. The FBI will always stand ready to police such predatory conduct."
If convicted, the defendants face a maximum sentence of 20 years imprisonment, three years supervised release, a $250,000 fine (or twice the gross gain or loss as a result of the offense), and an order of restitution with regard to each count of conviction.
The government's case is being prosecuted by Assistant United States Attorneys Thomas Firestone and Jeffrey A. Goldberg.
The Defendants:
Name: YELENA LITVAK
Residence: Brooklyn, New York
DOB: 5/19/62
Name: RACH BABANOV
Residence: Brooklyn, New York
DOB: 6/8/56
Name: ALLA MARKOV
Residence: Brooklyn, New York
DOB: 7/15/55