Company Allegedly Solicited And Overcharged Dozens Of Homeowners For Forwarding Tax Exemption Applications To Nassau County Assessor’s Office
Schneiderman: Pernicious Scams Targeting Unsuspecting Homeowners Will Not Be Tolerated By My Office
MINEOLA – (RealEstateRama) — Attorney General Eric T. Schneiderman today announced a lawsuit against STAR Exemption Advisor, YCA Corp. and its business owner Arie Gal, for allegedly scamming thousands of new homeowners out of at least $1.5 million by charging them excessive fees to enroll them in the Basic STAR Exemption Program, which is otherwise free. The lawsuit, filed in Nassau County Supreme Court, seeks to provide full restitution to all those affected, and a complete accounting to identify all consumers who are entitled to such refunds. The lawsuit also seeks additional costs, damages, and to permanently enjoin the respondents from marketing any Basic Star rebate or property tax reduction services within the State of New York. The Attorney General’s office also secured a temporary restraining order enjoining the defendants from continuing doing business in New York State, to pay full restitution and damages to all injured consumers and to render a full accounting of all victims to the office. The temporary restraining order also froze all of the defendants’ assets.
“Home ownership is challenging enough. Preying on and deceiving New Yorkers by manipulating the STAR program – one of the few forms of financial relief available to homeowners – is shameful and illegal,” said Attorney General Schneiderman. “These kinds of pernicious scams targeting unsuspecting homeowners will not be tolerated by my office.”
The New York State School Tax Relief (“STAR”) Program provides a partial exemption from school property taxes for primary residences that are owner-occupied with a total household income of $500,000 or less. To receive the exemption, new homeowners must file an application with their local assessor’s office by January 2 in order for the exemption to be applied to the upcoming and subsequent years’ tax bills.
Attorney General Schneiderman’s Office commenced an investigation of Mr. Gal and his business after receiving numerous complaints from homeowners who alleged that his company had substantially overcharged them for filing an otherwise free application that the homeowners completed themselves. Moreover, homeowners were unaware that they were doing business with a private company as they believed they were sending their Nassau County application forms to the County, not an intermediary.
Mr. Gal used an official-sounding name like “Star Exemption Advisor” to scam thousands of homeowners out of tax savings that rightfully belonged to them. His company allegedly sent misleading mailers that looked like official government agency documents that tricked homeowners into signing up with them to apply for the Basic STAR exemption for a fee. It is charged they used official-looking envelopes to make homeowners think that the mailers were coming from a government agency. Moreover, the company charged homeowners a fee that was 100% of the total tax savings for the first year even though applying for Basic STAR exemption costs nothing and can be accomplished without professional help.
Once homeowners were approved for the exemption the company sent them invoices. If payment was not remitted immediately or homeowners disputed the charges, Mr. Gal allegedly sued them in Small Claims Court. Mr. Gal even allegedly sued homeowners for applications the homeowners had personally filed with the Department of Assessment. Upon receiving a Small Claims Court notice from Mr. Gal, most homeowners settled to avoid litigation. Homeowners who went to their scheduled court date were shocked to see so many other homeowners in the same predicament.
The Office of the New York State Attorney General thanks Acting County Assessor James E. Davis, Deputy County Attorney Robert Mehran, and the staff of the Nassau County Assessor’s Office.
The investigation was handled by Valerie Singleton, Assistant Attorney General in Charge of the Nassau Regional Office; Assistant Attorney General Christina H. Bedell, Supervising Investigator Paul Matthews, and Senior Consumer Frauds Representative Adam Levin, with assistance from Director of Research & Analytics Lacey Keller and Analyst John Ferrara. The Nassau Regional Office is part of the Division of Regional Affairs, led by Marty Mack, Executive Deputy Attorney General for Regional Offices.
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