NEW YORK CITY—Attorney General Eric T. Schneiderman has announced a settlement agreement that bars developers Joseph Scarpinito and Shiraz Sanjana—and five affiliated entities they own and operate—from offering or selling securities, including condo and coop sales, in or from New York State.
The agreement is the result of an investigation by the Attorney General's real estate finance bureau into allegations of fraud by the developers of the Mirada, an eight-story Harlem condominium. The agreement further provides for binding arbitration with the condo purchasers for alleged construction defects, and requires the developers to pay $500,000 in penalties and fines to New York State.
The investigation began after homebuyers at the Mirada complained to the Attorney General about water leaks and other serious construction defects in the tower, located at 161 E. 110th St. The Attorney General found that Scarpinito and Sanjana, acting through their lawyer, Harold L. Gruber, allegedly concealed their involvement in the development by filing false documents with the bureau. In the filings, the developers named Scarpinito's elderly mother as the project developer and did not disclose their own involvement, thereby avoiding the requirement that they disclose Scarpinito's prior federal felony conviction for bank fraud in the condominium offering plan.
“Our laws protect purchasers of real estate securities, including condominiums and co-operatives, by requiring sellers to make important disclosures to investors,” says Attorney General Schneiderman. “The identities and business backgrounds of the people who make or take part in developing and selling a condo is a material fact that a purchaser has a legal right to know. There is one set of rules for everyone, and my office will protect the rights of purchasers and punish unscrupulous developers.”
GlobeSt.com reached out to defense attorney Gruber for comment but did not receive a response by press time.
Under the settlement agreement, Scarpinito is permanently barred from the securities industry and Sanjana is barred for sixteen months. They are required to submit to binding arbitration with the board of managers of the Mirada concerning the alleged construction defects, as well as disputes with the board concerning unpaid rent and common charges, and to pay any amount the arbitrator awards to the condominium's board. Scarpinito and Sanjana, and the entities under their control, must pay $500,000 in civil penalties, costs, and fees to New York state.
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
