New York, NY (PRWEB) August 13, 2014
In a recent state investment fraud case, the Securities and Commercial Litigation Group at Napoli Bern Ripka Shkolnik LLP obtained an $8.4 million judgment on behalf of two companies that had invested millions of dollars that was supposed to be used to develop several pieces of commercial real estate. Instead, court documents show the defendants used that money as a personal piggy bank and refused to repay the investors, relying on a web of companies they had set up to shield them from any personal liability.
According to the lawsuit, the defendants are a family headed by Yehuda Lieb Puretz and include his wife, Tertza Puretz, and his children, Malka Blau and Aron Puretz. The defendants also included the YLPF Trust (initialed after Yehuda, the leader of the scheme) and their fraudulent realty companies – St. Marks Homes Realty, LLC, St. Marks Homes One Realty, LLC and St. Marks Homes Two Realty, LLC – which were the alter egos of the YLPF Trust.
As shown in court documents, the defendants solicited $4 million from the plaintiffs in return for two mortgaged promissory notes, which the defendants refused to repay when the notes became due. The lawsuit alleged that the St. Marks companies were sham companies and set up only to shield the individual defendants from personal liability for the amounts they borrowed from the plaintiffs. Court documents stated that the St. Marks companies were undercapitalized, had not maintained any bank accounts, and had no bank records since at least 2007 when the plaintiffs invested the $4 million in the fraudulent scheme. The plaintiffs’ investment was filtered through the St. Marks companies to the YLPF Trust, with the individual defendants as the beneficiaries of the YLPF Trust.
The judgment entered in the case shows that the defendants cannot hide behind corporate entities to avoid repaying the money they borrowed. The $8.4 million judgment includes not only the $4 million borrowed but substantial interest for not having repaid the loan for over six years.
The case – NCC Capital, LLC et. ano. v. St. Marks Home Realty, et. al., Index No. 501264/2013 – was decided by the Honorable David Schmidt of the New York State Supreme Court, Kings County.