HEPTA Complaint

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF QUEENS ----------------------------------------------------------------------------X JOHN CHARM, Index No.: ___________ Plaintiff, -againstCOMPLAINT STEVEN SHARP, SHARP GROUP LLC, JOHN DOE 1, JOHN DOE 2, NEW GROUP LLC, MARK SINTER and MATTHEW STRIKER, Defendants.

----------------------------------------------------------------------------X Plaintiff, JOHN CHARM (“Mr. Charm”), by and through the undersigned attorney, presents this Verified Complaint against the Defendants and alleges as follows: INTRODUCTION 1.

This is an action for relief pursuant to the provisions of New York Real Property Law Section 265-a, which is known as the Home Equity Theft Prevention Act (“HETPA”).

2.

In short, Defendants intentionally acted together to orchestrate a theft of the equity in Mr. Charm’s home, which is located in Queens, New York (the “Premises”), through the guise of offering “foreclosure relief.”

3.

The false and misleading statements, oral and written misrepresentations, deceit and intimidation of Mr. Charm by each of the individual Defendants (or their closely held corporate entities) in themselves constitute numerous violations of HETPA.

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4.

Taken collectively, the false and misleading statements, oral and written misrepresentations, deceit and intimidation of Mr. Charm by all of the Defendants constitutes a fraudulent scheme to steal Mr. Charm’s home equity—the most severe form of the fraud, deception and unfair dealing by home equity purchasers that HETPA was enacted to prevent.

5.

Certain Defendants’ deceit went so far as to present themselves as acting independent of the other Defendants, when in fact, they were all acting in concert.

6.

The Defendants colluded to Mr. Charm’s home equity through presenting alternating scenarios of disaster and catastrophe (on the one hand) and offers of relief from such disasters and catastrophe (on the other hand) relating to the outstanding mortgage and existing foreclosure action on Mr. Charm’s home.

7.

Defendants’ scheme was designed to accomplish a foreclosure rescue scam that violates HEPTA. PARTIES

8.

At all times relevant to this action, Mr. Charm was a resident of Queens County, State of New York.

9.

Defendant Steven Sharp (“Mr. Sharp”) is an individual with an unknown address. Upon information and belief, Mr. Sharp is the sole member, principal, director and/or officer of Defendant Sharp Group LLC.

10.

Defendant Sharp Group (“Sharp Group”) is a New York limited liability company with a registered address in Brooklyn, New York.

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11.

Defendants John Doe 1 and John Doe 2 are male individuals who participated with Defendants Mr. Sharp and Sharp Group in the events described here, but whose names and addresses are unknown to Mr. Charm.

12.

Defendant New Group LLC (“New Group”) is a New York limited liability company with a registered address in New York, New York.

13.

Defendant Mark Sinter (“Mr. Sinter”) is an individual with an unknown address. Upon information and belief, Mr. Sinter is a member, principal, director and/or officer of New Group.

14.

Defendant Matthew Striker (“Mr. Striker”) is an individual with an unknown address.

Upon information and belief, Mr. Striker is a member, principal, director and/or officer of New Group.

FACTS

15.

The facts underlying this Complaint demonstrate a concerted scheme by the Defendants to convince Mr. Charm that they could rescue him from what they described as a fraudulent mortgage and foreclosure action that would result in him losing everything.

16.

Defendants’ proposed rescue involved Mr. Charm’s signing over the deed of his home to them, effecting an illegal sale while a foreclosure action is pending.

Mr. Charm’s Mortgage & Foreclosure 17.

Mr. Charm purchased the Premises on August 24, 2006 for $599,000; the purchase was financed with a subprime home loan that was funded by Flushing Mortgage Funding, Inc. (“Flushing”), in whose favor Mr. Charm executed a mortgage (the “Mortgage”).

18.

The Mortgage was subsequently assigned to National Bank Fund (“National”).

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19.

On September 23, 2010, National commenced a foreclosure of the Mortgage by filing a summons and complaint against Mr. Charm.

Mr. Sharp’s Initial Conversations With Mr. Charm 20.

During the last week of May 2013, Mr. Charm received a call from an unknown number on his personal cell phone.

21.

When he answered, it was Mr. Sharp.

22.

Mr. Charm spoke briefly with Mr. Sharp but he hung up quickly because he did not know how Mr. Sharp had obtained his personal contact information.

23.

Several days later, three individuals approached Mr. Charm at his place of work: Mr. Sharp, John Doe 1 and John Doe 2.

24.

At that time, Mr. Sharp, John Doe 1 and John Doe 2 offered to buy the Premises.

25.

In the course of their conversation, Mr. Sharp, John Doe 1 and John Doe 2 stated to Mr. Charm that they “are in the business of buying homes.”

26.

Mr. Sharp also specifically stated that he was interested in buying the Premises from Mr. Charm because there was a “fraudulent mortgage” on it and he (Mr. Sharp) would like to help Mr. Charm save his home.

27.

Mr. Charm felt threatened by the initial call and conversation because Mr. Sharp seemed to know a lot of personal information about him.

28.

Most disturbing to Mr. Charm was Mr. Sharp’s statement’s about the “fraudulent mortgage.” Mr. Charm understood this statement to mean that he (Mr. Charm) was a guilty party in the fraudulent mortgage.

29.

Mr. Sharp, John Doe 1 and John Doe 2 offered to pay Mr. Charm $160,000 in cash for the Premises.

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30.

Mr. Charm refused their offer, but Mr. Sharp, John Doe 1 and John Doe 2 did not cease in their effort to convince him to sell his home to them.

Mr. Charm’s Conversations with Mr. Sinter and Mr. Striker 31.

Following the visit by Mr. Sharp and his comrades, Mr. Charm received a visit from Mr. Sinter and one of his partners, Mr. Striker.

32.

Mr. Sinter and Mr. Striker asserted that they were members of New Group and they were also interested in buying Mr. Charm’s home.

33.

Similar to Mr. Sharp, Mr. Sinter and Mr. Striker told Mr. Charm that he was involved in a fraudulent mortgage and that he (Mr. Charm) could be criminally liable for it.

34.

Mr. Sinter and Mr. Striker also offered to buy the Premise and said that they would “beat any price” by paying “more than what anybody has offered.”

Mr. Sharp, Mr. Sinter and Mr. Striker Alternately Pressure Mr. Charm 35.

A short time after Mr. Sinter and Mr. Striker first appeared, Mr. Charm was approached

by Mr. Sharp again.

36.

From their conversation, Mr. Charm understood that Mr. Sharp had has conversations with Mr. Sinter and Mr. Striker.

37.

Mr. Sharp stated that what Mr. Sinter and Mr. Striker said was a lie; he also promised that he (Mr. Sharp) only wanted to help Mr. Charm save his home.

38.

After that conversation, Mr. Sharp appeared at Mr. Charm’s home every few days and urged him to sell the Premises to him for $160,000 “in cash.”

39.

During this time, Mr. Sinter and Mr. Striker also contacted Mr. Charm to convince him to sell the Premises to them.

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40.

Mr. Charm was confused and worried because he understood from the three gentlemen— Mr. Sharp, Mr. Sinter and Mr. Striker—that he must either sell his home or face criminal charges relating to the Mortgage.

41.

After several visit, Mr. Charm began to trust Mr. Sharp because he consistently stated that he wanted to help Mr. Charm save the Premises.

42.

A few days later, Mr. Sinter and Mr. Striker appeared again and told Mr. Charm that it would be best if Mr. Charm made an agreement with them.

43.

Mr. Charm was afraid and refused their offer.

44.

Then, Mr. Sharp appeared again and told Mr. Charm that the best option was to sell the Premises to him (Mr. Sharp) because he had Mr. Charm’s best interests at heart.

45.

A few days later, Mr. Sharp once again visited Mr. Charm. At that time, he told Mr. Charm to “forget those other guys and trust me [Mr. Sharp] on this.”

Mr. Sharp Convinces Mr. Charm to Sell 46.

After all of the pressure, Mr. Charm agreed again to accompany Mr. Sharp to his office.

47.

Mr. Sharp drove Mr. Charm to his office. Along the way, though, Mr. Sharp picked up John Doe 1 and John Doe 2.

48.

Throughout the car ride, Mr. Sharp and the other men were discussing the supposed “fraudulent mortgage” and how beneficial it would be for Mr. Charm to sell the Premises.

49.

Mr. Charm felt ambushed and very nervous.

50.

When they arrived at his office, Mr. Sharp once again stated that Mr. Charm was involved in a fraudulent mortgage and that he could be prosecuted for a crime.

51.

Mr. Sharp repeated that he would pay Mr. Charm $160,000 for the Premises “in cash.”

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52.

Then, Mr. Sharp handed Mr. Charm two sheets of paper and urged Mr. Charm to sign them quickly.

53.

Mr. Charm signed some papers, although he is unaware of what papers he signed because he did not have any opportunity to read them.

54.

Then Mr. Sharp handed Mr. Charm a bag with a large amount of cash.

55.

Mr. Charm had no idea how much money was in the bag as he did not count the amount before leaving Mr. Sharp’s office.

56.

The entire event left Mr. Charm feeling intimidated, flustered and tricked.

57.

When Mr. Charm returned home and counted the money he discovered that there was only $25,000 in the bag.

The Sale Documents 58.

The documents placed before Mr. Charm for his signature were: (1) a Residential Contract of Sale (“Purchase Contract”); (2) a promissory note; and (3) a deed.

59.

The other signature on the Purchase Contract, promissory note and deed was “Mr. Sharp —Member Sharp Group.”

60.

The Purchase Contract is dated “July ____ 2013” with no specific day indicated; it also specifies a purchase price of $175,000 and a closing date of “on or about November 10, 2014.”

61.

The Purchase Contract does not contain numerous provision required by RPL § 265a(4), including, inter alia: a.

The telephone number of the purchaser;

b.

A complete description of the terms of payment; and

c.

A notice of the right to cancel the contract.

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62.

The Purchase Contract also was not accompanied by a form Notice of Cancellation as required by RPL § 265-a(6).

63.

The promissory note is dated July 31, 2013 and indicates a face amount of $110,000 payable to Mr. Charm. It specifies that Sharp Group will pay Mr. Charm the amount of $110,000 in full “only if [Mr. Charm’s] mortgage…is vacated by the Court.”

64.

The deed is dated August 1, 2013 and reflects a transfer of the Premises from Mr. Charm to Sharp Group.

FIRST CAUSE OF ACTION VIOLATION OF RPL § 265-a THE HOME EQUITY THEFT PROTECTION ACT

65.

Mr. Charm repeats and reiterates each and every allegation contained in the preceding paragraphs as though fully set forth here.

66.

Mr. Charm is an “equity seller” within the meaning of RPL § 265-a(2)(f), the Home Equity Theft Protection Act (“HETPA”).

67.

Mr. Sharp and Sharp Group are each an “equity purchaser” within the meaning of RPL § 265-a(2)(e).

68.

New Group, Mr. Sinter, Mr. Striker, John Doe 1 and John Doe 2 are each a “representative” within the meaning of RPL § 265-a(2)(j).

69.

Mr. Charm’s sale of the Premises to Mr. Sharp and Sharp Group was a “covered contract” within the meaning of RPL § 265-a(2)(c).

70.

The Purchase Contract violates RPL § 265-a(4) in that it is facially defective and does not contain the required terms, provisions and accompanying notices described in the preceding paragraphs.

71.

Each of the Defendants, individually and acting together, violated RPL § 265-a(7)(b-d).

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72.

Specifically, the Defendants enacted a scheme to pressure, harass and intimidate Mr. Charm into selling the Premises and throughout the scheme they each separately: a.

Made false and misleading statements regarding the foreclosure action;

b.

Made particular false and misleading statements about the terms of the Purchase Contract, Mr. Charm’s rights and obligations incident to the sale transaction, and the nature of the documents Mr. Charm signed;

73.

c.

Represented that they were acting on Mr. Charm’s behalf and in his interest;

d.

Represented that they were assisting Mr. Charm to save his home; and

e.

Took unconscionable advantage of Mr. Charm.

Defendants’ collective and individual violations of RPL § 265-a constitute a “theft of equity” within the meaning of HETPA.

74.

By reason of Defendants’ collective and individual violations of RPL § 265-a, Mr. Charm has been damaged in an amount to be determined at trial.

75.

By reason of Defendants’ collective and individual violations of RPL § 265-a, Mr. Charm is entitled to a statutory rescission of the Purchase Contract, and cancellation of the deed.

76.

The home equity theft scheme orchestrated and conducted by Defendants’ collective and individual violations of RPL § 265-a is so outrageous that Mr. Charm is entitled to treble damages, attorneys fees and costs pursuant to RPL § 265-a(9).

SECOND CAUSE OF ACTION AIDING AND ABETTING VIOLATION OF RPL § 265-a

77.

Mr. Charm repeats and reiterates each and every allegation contained in the preceding paragraphs as though fully set forth here.

78.

Defendants Mr. Sharp and Sharp Group violated numerous provisions of HEPTA (RPL § 265-a).

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79.

Upon information and belief Defendants John Doe 1, John Doe 2, New Group, Mr. Sinter and Mr. Striker knew Mr. Sharp and Sharp Group’s actions and statements constituted violations of HEPTA.

80.

Upon information and belief Defendants John Doe 1, John Doe 2, New Group, Mr. Sinter and Mr. Striker substantially assisted Mr. Sharp and Sharp Group in the commission of the actions and statements that violated HEPTA.

81.

As such, Defendants John Doe 1, John Doe 2, New Group, Mr. Sinter and Mr. Striker are liable to Mr. Charm for damages arising from their aiding and abetting Mr. Sharp and Sharp Group’s violation of HEPTA in an amount to be determined at trial.

THIRD CAUSE OF ACTION COMMON LAW RESCISSION

82.

Mr. Charm repeats and reiterates each and every allegation contained in the preceding paragraphs as though fully set forth here.

83.

Mr. Sharp and Sharp Group entered into an agreement with Mr. Charm for the sale of the Premises while engaging in conduct that was procedurally unconscionable.

84.

Specifically, Mr. Sharp made numerous misrepresentations to Mr. Charm regarding the status of Mr. Charm’s foreclosure action, the harm that would befall Mr. Charm if he did not sell the Premises to Mr. Sharp, and the amount of money Mr. Sharp would pay Mr. Charm for the Premises.

85.

In addition, Mr. Sharp took advantage of Mr. Charm’s anxious disposition regarding the foreclosure action, his lack of knowledge about the foreclosure process and lack of understanding about the exact facts concerning his Mortgage in order to convince Mr. Charm to sell the Premises.

86.

Mr. Sharp’s conduct was nothing less than unconscionable.

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87.

Further, the Purchase Contract and promissory note contain terms that are substantively unconscionable.

88.

Specifically, the following terms are unconscionable: a. A purchase price of $175,000, when Mr. Charm was handed only $25,000 in cash and a contingent promissory note for $110,000; b. A promise to pay Mr. Charm $110,000 only if his Mortgage is “vacated by the Court.�

89.

Due to the procedural unconscionability surrounding the execution of the Purchase Contract, promissory note and deed, and the substantive unconscionability of the terms of the Purchase Contract and the promissory note, Mr. Charm is entitled to rescind the Purchase Contract, promissory note, deed and all other documents related to the sale of the Premises to Sharp Group.

90.

Mr. Charm is further entitled to a judgment canceling the deed transferring the Premises to Sharp Group, directing Sharp Group to execute and deliver to Mr. Charm a deed reconveying the Premises to Mr. Charm in fee simple and directing that Sharp Group and Mr. Sharp execute and provide all documents necessary to give effect to the judgment of this Court.

WHEREFORE, Mr. Charm demands judgment as follows: a.

On the First Cause of Action against each of the Defendants: i. Rescission of the Purchase Contract and cancellation of the deed transferring the Premises to Sharp Group; ii. Treble damages in an amount to be determined at trial; iii. Attorneys fees and costs;

b. On the Second Cause of Action against John Doe 1, John Doe 2, New Group, Mr. Sinter and Mr. Striker: 1

i. Actual, compensatory and punitive damages in an amount to be determined at trial; ii. Attorneys fees and costs; c. On the Third Cause of Action against Sharp Group and Mr. Sharp: i. Rescission of the Purchase Contract; ii. A judgment canceling the deed transferring the Premises to Sharp Group; iii. An order directing Sharp Group to execute and deliver a deed reconveying the Premises to Mr. Charm; and d. Such other and further relief as this Court deems just.

Dated: December 15, 2013 Queens, New York ________________________________ Your Law Firm Attorneys for Plaintiff

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