Preview
FILED: QUEENS COUNTY CLERK 07/02/2024 02:46 PM INDEX NO. 713808/2024
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 07/02/2024
SUPREMECOURTOFTHESTATE OFNEWYORK
COUNTYOFQUEENS
__.....____-_______________________________________.....____________Ç
MMINCLLC and MARVINMATHIEU, Index No.:
Plaintiff,
SUMMONS
-against-
Plaintiff selects Queens County as
venue for trial of this action.
FLATIRONREALTYCAPITAL LLC,
TOORAKCAPITALPARTNERS, LLC, The basis of venue is the location
SPECIAL SERVICEAMERICALLC, of real property located in the
SSANEASSETSLLC and County of Queens.
NORTHEASTBANK,
Defendants.
__________________..____________________________________________.-x
TOTHEABOVE-NAMED
DEFENDANTS:
You are hereby summoned to answer the complaint in this action and to serve a copy of
your answer, or, if thecomplaint is not served with this summons, to serve a notice of appearance,
on the plaintiff s attorney(s) within twenty (20) days after the service of this summons, exclusive
of the day of service (or within thirty (30) days after service is complete if this summons is not
personally delivered to you within the State of NewYork); and in case of your failure to appear or
answer, judgment will be taken against you by default for the relief demanded herein.
Dated: July 1, 2024 Yours, etc.,
William J. Fallon, Esq.
By: /s/: William J. Fallon
William J.
Fallon, Esq.
Attorney for Plaintiffs
POBox 575
Rockville Centre, NY 11571
27 William Street, Suite 1205
NewYork, NY 10005
Tel: (212) 776-9219
Defendants'
Addresses: FLATIRON REALTYCAPITAL LLC: 150 GREATNECK ROAD,
GREATNECK,NY, 11561; TOORAK CAPITAL PARTNERS, LLC: 28 LIBERTY STREET,
NEWYORK, NY, 10005; SPECIAL SERVICE AMERICALLC: 15 CUTTERMILLRD., STE
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GREATNECK, NY, 11021; SSA NE ASSETSLLC: 15 CUTTERMILLRD., STE 270,
270,
GREATNECK, NY, 11021; and NORTHEASTBANK: 200 Berkeley Street, Boston,
Massachusetts, 02116
Nature of the Action: To discharge and declare null and void a Mortgage in the
cancel, set aside,
amount of $376,000.00, Assignment of Leases and Rent and subsequent assignments of the
Mortgage encumbering the premises known as 25-02 Mott Avenue, Far Rockaway, New York
11691, on the grounds of fraudulent inducement, fraud, conspiracy to defraud and pursuant to
RPAPLArticle 15, an award of monetary and compensatory damages for fraudulent inducement,
fraud and conspiracy to defraud, breach of fiduciary duty, promissory estoppel, and intentional
infliction of emotional, and special and punitive damages in the amount of $5,000,000.00, and
injunctive relief.
The relief sought: DECLARATORY,MONETARY,PUNITIVE, INJUNCTIVE. Upon your failure
to appear, judgment will be taken against you by default for amounts which exceed the
jurisdictional limits of all lower courts, with interest, together with the costs and disbursements of
this action.
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SUPREMECOURTOF THESTATEOF NEWYORK
COUNTYOF QUEENS
_______________-----___________________________________-----________Ç
MMINCLLC and MARVINMATHIEU, Index No.:
Plaintiff,
-against-
VERIFIED COMPLAINT
FLATIRONREALTYCAPITAL LLC,
TOORAK
CAPITAL PARTNERS,LLC,
SPECIAL SERVICE AMERICALLC,
SSANEASSETSLLC and
NORTHEASTBANK,
Defendants.
__________----------------------___________________________________Ç
PLEASETAKENOTICEthat Plaintiffs, MMINCLLC and MARVINMATHIEU,by their
attorney, William J. Fallon, Esq., as and for his Verified Complaint, respectfully alleges, upon
information and belief, as follows:
ANDBACKGROUND
PRELIMINARYSTATEMENT
1. This is an action to cancel, set aside, discharge and declare null and void a Mortgage
in the amount of $376,000.00 and interest, recorded in the Queens County Clerk's Office on August
8, 2019 in CRFN2019000252973, encumbering the premises known as 25-02 Mott Avenue, Far
Rockaway, New York 11691, and identified in the land records of the City of NewYork as Block
15670, Lot 0171 in the County of Queens, City and State of NewYork (hereinafter the "premises",
"property"
"Premises", or "Property") executed and delivered by Plaintiff, MMINCLLC (hereinafter
"MMINC"), to Defendant FLATIRONREALTYCAPITAL LLC (hereinafter "FLATIRON"), an
Assignment of Leases and Rents from MMINCto FLATIRONrecorded in the Queens County
Clerk's Office on August 8, 2019 in CRFN2019000252974, and subsequent assignments off the
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Mortgage encumbering the premises on the grounds of fraudulent inducement, fraud, conspiracy
to defraud and pursuant to RPAPLArticle 15.
2. Said mortgage was and subsequently assigned by FLATIRON to TOORAK
CAPITAL PARTNERS, LLC (hereinafter "TOORAK"), by Assignment of Mortgage on January
8, 2020, and recorded on January 29, 2020, in CRFN, 2020000036284, and by Confirmatory
Assignment of Mortgage between the same parties, dated August 27, 2019, and recorded on April
30, 2020, in CRFN2020000136591, and thereafter, assigned by TOORAK
to FLATlRON, by
Assignment of Mortgage, dated July 31, 2020, and recorded on September 14, 2020, in CRFN
2020000256350, and thereafter assigned by FLATIRON to Defendant, SPECIAL SERVICE
AMERICALLC (hereinafter "SPECIAL SERVICE"), by Assignment of Mortgage, dated August
21, 2020, and recorded on September 14, 2020, in CRFN2020000256351, and thereafter assigned
by SPECIAL SERVICE to Defendant, SSA NE ASSETSLLC (hereinafter "SSA NE"), by
Assignment of Mortgage, dated January 20, 2021, and recorded on February 12, 2021, CRFN
2021000054930.
3. Plaintiffs are also seeking and an award of monetary and compensatory damages
for fraudulent inducement, fraud and conspiracy to defraud, breach of fiduciary duty, promissory
estoppel, and intentional infliction of emotional distress in an amount that exceeds the jurisdiction
of the lower courts, and special and punitive damages in the amount of $5,000,000.00, in addition
to a preliminary and permanent injunction restraining and enjoining the Plaintiff in the foreclosure
action, Defendant herein, SSA NE, from taking any further action to foreclose the fraudulent
Mortgage encumbering the premises and obtain a deficiency judgment in its foreclosure action
presently pending before this Court against Plaintiffs under index number 715012/2021
(hereinafter the "foreclosure action"), and also enjoining and restraining SSA NE from further
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transferring or assigning the subject Mortgage secured by the subject premises and recorded with
the Queens County Clerk's Office, and also form further transferring, endorsing or selling the
representative Note.
4. MMINC is the owner of the premises and mortgagor. Plaintiff, MARVIN
MATHIEU(hereinafter "MATHIEU"), is the sole member of MMINCand guarantor of the loan
(MATHIEU and MMINChereinafter from title to time collectively referred to as "Plaintiffs").
FLATIRON, SPECIAL SERVICE and SSANE are controlled by the same principals, namely an
individual named Robert Talaszan (hereinafter "Talaszan"), whom, upon information and belief,
is a member of FLATIRON, SPECIAL SERVICE and SSA NE, and FLATIRON maintains a
substantial loan sale business relationship with TOORAK
buying and selling this loan and other
loans to and from each other The subject mortgage was pledged as collateral to Defendant,
NORTHEASTBANK (hereinafter "NORTHEAST") (FLATIRON, TOORAK, SPECIAL
SERVICE, SSA NE and NORTHEAST
hereinafter from title to time collectively referred to as
"Defendant"
or "Defendants"). a warehouse facility and lender to the other Defendants, whom,
upon information and belief, conspired with the other Defendants to defraud Plaintiffs and drive
Defendants'
them into insolvency or foreclose on the Property and or profited from the other
fraudulent activities and loan to MMINC, and other similarly situated entities and individuals.
PARTIES, JURISDICTION ANDVENUE
5. That at all relevant times, MMINCwas and remains a limited liability company
organized under the laws of the State of New York with its office and principal place of business
in the County of Kings, City and State of New York, and the owner of the subject premises and
mortgagor.
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6. That at all relevant times, MATHIEUwas and remains an individual residing in the
County of Kings, City and State of New York, the sole member of the LLC and guarantor of the
mortgage loan.
7. That at all relevant times, FLATlRONwas and remains a limited liability company
organized under the laws of the State of NewYork with an office in the County of Nassau, State
of NewYork, located at 150 GREATNECKROAD,GREATNECK,NY, 11561.
8. That at all relevant times, TOORAKwas and remains a foreign limited liability
company organized under the laws of the State of Delaware with an office in the County of New
York, State of NewYork, and doing business in the State of NewYork, with an office located at
28 LIBERTY STREET, NEWYORK, NY, 10005.
9. That at all relevant times, SPECIAL SERVICE, was and remains a limited liability
company organized under the laws of the State of NewYork with an office in the County of
Nassau, State of New York, located at 15 CUTTERMILLRD., STE 270, GREATNECK, NY,
11021.
10. That at all relevant times, SSANEwas and remains, upon information and belief a
foreign limited liability company, duly formed organization or association, with an office in the
County of Nassau, State of New York, located at 15 CUTTERMILLRD., STE 270, GREAT
NECK, NY, 11021, and doing business in the State of NewYork.
11. That, at all relevant times, NORTHEAST
was and remains a commercial bank
organized under the laws of the State of Maine, with its principal place of business located at 500
Canal Street, Lewiston, Maine, 04240, and with an office located at 200 Berkeley Street, Boston,
Massachusetts, 02116, and doing business in the State of New York.
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12. That in addition to those persons and entities set forth as Defendants herein, there
are likely other parties who may well be liable to Plaintiff but respecting whomPlaintiff currently
lacks specific facts to permit him to name such person or persons as a party defendant. By not
naming such persons or entities at this time, Plaintiffis not waiving her right to amendthis pleading
to add such parties, should the facts warrant adding such parties.
13. That Plaintiff is informed and believes, and based on that information and belief
alleges, that at all times mentioned in this Complaint, Defendants were the agents, servants,
representatives and or employees of the other Defendants and in doing the things alleged in this
Complaint were acting within the course and scope of such agency and employment.
14. That the transactions and events which are the subject matter of this Complaint all
occurred within the State of NewYork.
15. That the subject premises is located in the County of Queens, State of NewYork,
and, therefore, venue is proper pursuant to CPLR507.
BACKGROUND
ANDUNDERLYINGFACTS
16. That MMINCis fee owner of the premises, a legal two-family dwelling converted
from a one-family home, by virtue of a Deed from Midfirst Bank, dated July 31, 2019, and
recorded on August 8, 2019, with the Queens County Clerk, in CRFN2019000252973
17. That MMINCpurchased the property through Auction.com and MATHIEUmade
a downpayment in the amount of $23,500.00 at the closing on July 31, 2019, and in addition to
subsequently obtaining the Mortgage from FLATIRONto partially finance the purchase and paid
out of pocket $106,312.21 from his own funds to close the purchase of the property, including for
loan origination fees paid to FLATIRONwho did not provide a closing disclosure to Plaintiffs,
and in addition to $5,500.00 for flood and property insurance.
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I8. That prior thereto, MATHIEUwas solicited by Guy Shmuel (hereinafter "Guy"),
in January 2019 at a real estate investors event who explained to MATHIEUhe was an "Auction
Specialist"
and loan officer employed by FLATIRON, and, thereafter, Guy repeatedly contacted
MATHIEUon weekly basis to encourage him to invest in real estate.
19. That Guy promised MATHIEUhe can obtain a pre-approval letter for Plaintiff, a
closing attorney to represent MATHHIEU,an appraisal, financing to close on the purchase of the
Property, and additional financing to rehabilitate and repair the Property to make it marketable for
sale.
shop"
20. That Guy explained that he was essentially a "one stop who can provide
Plaintiffs with financing for the purchase of the property, funding for rehabilitation ofthe Property,
that was severely damaged and in disrepair because of Superstorm Sandy in 2012, and vacant for
almost ten (10) years, an attorney and a title company, and, noteworthy is the fact that his
FLATIRONbusiness card advertising "Up To 100 of Renovation Budget".
21. That, upon information and belief, Guy persuaded Plaintiffs into closing on the
purchase of the property through high pressure telephone tactics and leads to different properties,
flip"
as he sensed MATHIEUwas extremely ambitious to engage in the "fix and real estate
investment business but was likewise inexperienced in this business.
22. That Guy insisted MATHIEUform MMINCinstead of purchasing the property in
his own individual name for, upon information and belief, purposes of charging Plaintiffs a higher
interest rate than lawfully available to an individual in order to evade violating civil usury laws
and NYSpredatory lending laws, and to secure funding in the amount of $376,000.00 to close on
the purchase of the property.
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23. That Guy referred Plaintiffs to the Law Offices of Aaron L Katsman, PC
(hereinafter "Katsman") to represent Plaintiffs, but, upon information and belief, Katsman
appeared to represent both Plaintiffs and_FLATIRON in the transaction, and thus, Katsman had a
conflict of interest.
24. That Guy advised MATHIEUto contact Sharon Markowitz, Esq. from Katsman's
office to represent Plaintiffs on behalf of Katsman at the closing after Guy "informed her on
everything"
, however, Ms. Markowitz is not even a memberof the NewYork State Bar, but rather,
upon information and belief, is admitted only to practice law in Pennsylvania, and did not attend
the closing, but rather, upon information and belief, Katsamn's office sent attorney "Anna
Rovenskaya" "represent"
to Plaintiffs, and, upon information and belief, attomey Rovenskaya
either left the closing table prior to completion thereof or never even attended the closing.
25. That the fact that attorney present at the closing appeared to be representing both
Plaintiff and FLATIRON, made MATHIEUanxious, but he was led to believe by Guy and
Plaintiffs'
Katsman's office that they would be working in best interests.
26. That Plaintiffs were never represented by independent counsel during the loan
origination process, purchase of the Property and closing of the purchase of the Property.
27. That effective and competent counsel would have insisted that FLATIRONprovide
a written commitment that it would provide Plaintiffs with sufficient funds to rehabilitate and
restore the Property.
28. That despite Guy's promise and representation on behalf of FLATIRONto provide
rehabilitation funding, Plaintiffs were not provided any rehabilitation funding or a construction
loan at the closing of the purchase of the Property, and furthermore, FLATIRONalso represented
to Plaintiffs that they would assist in clearing 220 violations against the premises, but never did.
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29. That when Plaintiffs inquired about rehabilitation funding or a construction loan at
the closing, he was informed by FLATIRONthat funding would be provided post-closing, which
was memorialized in text messagesand voice mail recordings, and as a first-time, novice real estate
investor and lay person, MATHIEUaccepted this response under the guise this was customary.
30. That the Property was in disrepair and, upon information and belief, required a
minimum investment of $250,000.00 to repair it and restore it to market value, so that Plaintiffs
could market it for sale, and FLATIRONwas aware that Plaintiffs did not have capital reserves to
make the repairs and restore the Property without rehabilitation funding or a construction loan.
31. That, upon information and belief, FLATIRON obtained a false and misleading
appraisal valuing the market value of the property as $655,000.00.
32. That the Mortgage Note has an interest rate of 10.5% rising to 23.99% in the event
of any default under the promissory note or mortgage.
33. That Guy retracted his promise and FLATIRON never provided the additional
rehabilitation funds or construction loan necessary to repair and restore the Property and market it
sale.1
for
34. That when Plaintiffs contacted FLATIRON to inquire on the status of the
rehabilitation funding or construction loan, Plaintiffs were advised that FLATIRON had already
sold the loan and was not going to secure additional financing for Plaintiffs so that they could
repair and restore the property, improve and sell it for market value.
'
That, upon information and belief, Guy is no longer employed by FLATIRON and advised
Plaintiffs that FLATIRON's lending practices are unscrupulous and designed to cause financial
harm to consumers and investors, such as Plaintiffs herein.
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35. That the Mortgage in the amount of $376,000.00 and interest executed and
delivered by MMINCto FLATIRONat the closing was recorded in the Queens County Clerk's
Office on August 8, 2019, in CRFN2019000252973.
36. That an Assignment of Leases and Rents from MMINCto FLATIRON executed
and delivered at the closing was recorded in the Queens County Clerk's Office on August 8, 2019,
in CRFN2019000252974.
37. That because FLATIRONfailed as promised to provide Plaintiffs with financing to
rehabilitate and restore the property so that Plaintiffs could resell it at market values and because
FLATIRONsold the mortgage loan, MATHIEUused his retirement savings to begin to rehabilitate
and restore the property to marketable condition.
38. That after purchasing the Property and paying closing costs, Plaintiff was left with
$6,000.00 in his bank account, and once Plaintiff realized he had no budget available to repair and
restore the Property because FLATIRONbroke their promise to provide rehabilitation funding,
Plaintiff was forced to list the property for sale with a realtor, but the biggest offer he received was
$300,000.00, well below the alleged appraised value of $655,000.00, and as a result Plaintiff was
forced to invest his retirement investment savings and use other loans to attempt to rehabilitate and
restore the Property.
39. That after investing substantial monies into the Property, Plaintiffs again attempted
to sell the Property, but was unable to close on the sale thereof because the Property was still not
in marketable condition because of FLATIRON's failure to provide rehabilitation financing or a
construction loan to complete the rehabilitation project.
40. That without additional funding to complete the rehabilitation of the property and
inability to sell it because of the Covid-19 pandemic, Plaintiffs defaulted on the mortgage loan,
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but cured his default by making late mortgage payments for October, November and December
2019 payments.
41. That FLATIRONassigned the mortgage to TOORAK
by Assignment of Mortgage
on January 8, 2020, and recorded on January 29, 2020, in CRFN, 2020000036284, and by
Confirmatory Assignment of Mortgage between the same parties, dated August 27, 2019, and
recorded on April 30, 2020, in CRFN2020000136591.
41. That on or March 16, 2020, Plaintiffs notified TOORAK
that MATHIEUcontracted
Plaintiffs'
COVID-19 and was suffering from a hardship, that TOORAKacknowledged hardship
and placed the mortgage in forbearance for the next 6 months, ending on October 31, 2020, and
advised Plaintiffs the forbearance period may be extended beyond October 31, 2020.
42. That in addition to contracting COVID-19, MATHIEUalso became unemployed in
2020 because of the pandemic, and several potential buyers of the property never closed because
of the pandemic.
43. During the forbearance period, Plaintiffs attempted to find a buyer and satisfy the
mortgage loan, but his efforts were mostly unsuccessful as the buyer pool was limited due to
COVID-19 pandemic.
44. That Plaintiffs marketed the Property at an asking price of $550,000.00 but could
not find a buyer despite FLATIRON's previous appraisal of the property for $650,000.00.
45. That the Mortgage was assigned by TOORAKto FLATIRON, by Assignment of
Mortgage, dated July 31, 2020, and recorded on September 14, 2020, in the Queens County Clerk's
office in CRFN2020000256350.
46. That on or about August 24, 2020, Plaintiffs received a letter from Friedman Vartolo
LLP informing me that Plaintiffs were in default and requested that Plaintiffs "...bring your
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account current by paying the reinstatement amount no later than September 8, 2020", even though
the mortgage loan was still in the forbearance period granted by TOORAK.
47. That the aforesaid notice did not provide Plaintiffs with an amount that was required
to reinstate the loan, while loan was in forbearance.
48. That the Mortgage was assigned by FLATIRONto Defendant, SPECIAL SERVICE
AMERICALLC (hereinafter "SPECIAL SERVICE"), by Assignment of Mortgage, dated August
21, 2020, and recorded on September 14, 2020, in the Queens County Clerk's office in CRFN
2020000256351.
49. That in September 2020, Plaintiffs contact TOORAK,who had previously advised
him that he may be able to extend the forbearance period, but to resume making monthly payments,
and at that time was advised by TOORAKthat it was no loner serving the loan and to contract
FLATIRON.
50. That Plaintiffs followed TOORAK'sadvice and attempted to contact FLATIRON,
and after three weeks FLATIRON's representative herself as
"Amy" advised
(3) identifying
Plaintiffs that the loan was transferred to SPECIAL SERVICES.
51. That Plaintiffs contacted SPECIAL SERVICESwho advised him that he could not
resume monthly payments and reinstate the loan, but rather Plaintiffs could only payoff and satisfy
the entire loan
Preview
FILED: QUEENS COUNTY CLERK 07/02/2024 02:46 PM INDEX NO. 713808/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 07/02/2024 SUPREMECOURTOFTHESTATE OFNEWYORK COUNTYOFQUEENS __.....____-_______________________________________.....____________Ç MMINCLLC and MARVINMATHIEU, Index No.: Plaintiff, SUMMONS -against- Plaintiff selects Queens County as venue for trial of this action. FLATIRONREALTYCAPITAL LLC, TOORAKCAPITALPARTNERS, LLC, The basis of venue is the location SPECIAL SERVICEAMERICALLC, of real property located in the SSANEASSETSLLC and County of Queens. NORTHEASTBANK, Defendants. __________________..____________________________________________.-x TOTHEABOVE-NAMED DEFENDANTS: You are hereby summoned to answer the complaint in this action and to serve a copy of your answer, or, if thecomplaint is not served with this summons, to serve a notice of appearance, on the plaintiff s attorney(s) within twenty (20) days after the service of this summons, exclusive of the day of service (or within thirty (30) days after service is complete if this summons is not personally delivered to you within the State of NewYork); and in case of your failure to appear or answer, judgment will be taken against you by default for the relief demanded herein. Dated: July 1, 2024 Yours, etc., William J. Fallon, Esq. By: /s/: William J. Fallon William J. Fallon, Esq. Attorney for Plaintiffs POBox 575 Rockville Centre, NY 11571 27 William Street, Suite 1205 NewYork, NY 10005 Tel: (212) 776-9219 Defendants' Addresses: FLATIRON REALTYCAPITAL LLC: 150 GREATNECK ROAD, GREATNECK,NY, 11561; TOORAK CAPITAL PARTNERS, LLC: 28 LIBERTY STREET, NEWYORK, NY, 10005; SPECIAL SERVICE AMERICALLC: 15 CUTTERMILLRD., STE 1 of 49 FILED: QUEENS COUNTY CLERK 07/02/2024 02:46 PM INDEX NO. 713808/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 07/02/2024 GREATNECK, NY, 11021; SSA NE ASSETSLLC: 15 CUTTERMILLRD., STE 270, 270, GREATNECK, NY, 11021; and NORTHEASTBANK: 200 Berkeley Street, Boston, Massachusetts, 02116 Nature of the Action: To discharge and declare null and void a Mortgage in the cancel, set aside, amount of $376,000.00, Assignment of Leases and Rent and subsequent assignments of the Mortgage encumbering the premises known as 25-02 Mott Avenue, Far Rockaway, New York 11691, on the grounds of fraudulent inducement, fraud, conspiracy to defraud and pursuant to RPAPLArticle 15, an award of monetary and compensatory damages for fraudulent inducement, fraud and conspiracy to defraud, breach of fiduciary duty, promissory estoppel, and intentional infliction of emotional, and special and punitive damages in the amount of $5,000,000.00, and injunctive relief. The relief sought: DECLARATORY,MONETARY,PUNITIVE, INJUNCTIVE. Upon your failure to appear, judgment will be taken against you by default for amounts which exceed the jurisdictional limits of all lower courts, with interest, together with the costs and disbursements of this action. 2 of 49 FILED: QUEENS COUNTY CLERK 07/02/2024 02:46 PM INDEX NO. 713808/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 07/02/2024 SUPREMECOURTOF THESTATEOF NEWYORK COUNTYOF QUEENS _______________-----___________________________________-----________Ç MMINCLLC and MARVINMATHIEU, Index No.: Plaintiff, -against- VERIFIED COMPLAINT FLATIRONREALTYCAPITAL LLC, TOORAK CAPITAL PARTNERS,LLC, SPECIAL SERVICE AMERICALLC, SSANEASSETSLLC and NORTHEASTBANK, Defendants. __________----------------------___________________________________Ç PLEASETAKENOTICEthat Plaintiffs, MMINCLLC and MARVINMATHIEU,by their attorney, William J. Fallon, Esq., as and for his Verified Complaint, respectfully alleges, upon information and belief, as follows: ANDBACKGROUND PRELIMINARYSTATEMENT 1. This is an action to cancel, set aside, discharge and declare null and void a Mortgage in the amount of $376,000.00 and interest, recorded in the Queens County Clerk's Office on August 8, 2019 in CRFN2019000252973, encumbering the premises known as 25-02 Mott Avenue, Far Rockaway, New York 11691, and identified in the land records of the City of NewYork as Block 15670, Lot 0171 in the County of Queens, City and State of NewYork (hereinafter the "premises", "property" "Premises", or "Property") executed and delivered by Plaintiff, MMINCLLC (hereinafter "MMINC"), to Defendant FLATIRONREALTYCAPITAL LLC (hereinafter "FLATIRON"), an Assignment of Leases and Rents from MMINCto FLATIRONrecorded in the Queens County Clerk's Office on August 8, 2019 in CRFN2019000252974, and subsequent assignments off the 3 of 49 FILED: QUEENS COUNTY CLERK 07/02/2024 02:46 PM INDEX NO. 713808/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 07/02/2024 Mortgage encumbering the premises on the grounds of fraudulent inducement, fraud, conspiracy to defraud and pursuant to RPAPLArticle 15. 2. Said mortgage was and subsequently assigned by FLATIRON to TOORAK CAPITAL PARTNERS, LLC (hereinafter "TOORAK"), by Assignment of Mortgage on January 8, 2020, and recorded on January 29, 2020, in CRFN, 2020000036284, and by Confirmatory Assignment of Mortgage between the same parties, dated August 27, 2019, and recorded on April 30, 2020, in CRFN2020000136591, and thereafter, assigned by TOORAK to FLATlRON, by Assignment of Mortgage, dated July 31, 2020, and recorded on September 14, 2020, in CRFN 2020000256350, and thereafter assigned by FLATIRON to Defendant, SPECIAL SERVICE AMERICALLC (hereinafter "SPECIAL SERVICE"), by Assignment of Mortgage, dated August 21, 2020, and recorded on September 14, 2020, in CRFN2020000256351, and thereafter assigned by SPECIAL SERVICE to Defendant, SSA NE ASSETSLLC (hereinafter "SSA NE"), by Assignment of Mortgage, dated January 20, 2021, and recorded on February 12, 2021, CRFN 2021000054930. 3. Plaintiffs are also seeking and an award of monetary and compensatory damages for fraudulent inducement, fraud and conspiracy to defraud, breach of fiduciary duty, promissory estoppel, and intentional infliction of emotional distress in an amount that exceeds the jurisdiction of the lower courts, and special and punitive damages in the amount of $5,000,000.00, in addition to a preliminary and permanent injunction restraining and enjoining the Plaintiff in the foreclosure action, Defendant herein, SSA NE, from taking any further action to foreclose the fraudulent Mortgage encumbering the premises and obtain a deficiency judgment in its foreclosure action presently pending before this Court against Plaintiffs under index number 715012/2021 (hereinafter the "foreclosure action"), and also enjoining and restraining SSA NE from further 4 of 49 FILED: QUEENS COUNTY CLERK 07/02/2024 02:46 PM INDEX NO. 713808/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 07/02/2024 transferring or assigning the subject Mortgage secured by the subject premises and recorded with the Queens County Clerk's Office, and also form further transferring, endorsing or selling the representative Note. 4. MMINC is the owner of the premises and mortgagor. Plaintiff, MARVIN MATHIEU(hereinafter "MATHIEU"), is the sole member of MMINCand guarantor of the loan (MATHIEU and MMINChereinafter from title to time collectively referred to as "Plaintiffs"). FLATIRON, SPECIAL SERVICE and SSANE are controlled by the same principals, namely an individual named Robert Talaszan (hereinafter "Talaszan"), whom, upon information and belief, is a member of FLATIRON, SPECIAL SERVICE and SSA NE, and FLATIRON maintains a substantial loan sale business relationship with TOORAK buying and selling this loan and other loans to and from each other The subject mortgage was pledged as collateral to Defendant, NORTHEASTBANK (hereinafter "NORTHEAST") (FLATIRON, TOORAK, SPECIAL SERVICE, SSA NE and NORTHEAST hereinafter from title to time collectively referred to as "Defendant" or "Defendants"). a warehouse facility and lender to the other Defendants, whom, upon information and belief, conspired with the other Defendants to defraud Plaintiffs and drive Defendants' them into insolvency or foreclose on the Property and or profited from the other fraudulent activities and loan to MMINC, and other similarly situated entities and individuals. PARTIES, JURISDICTION ANDVENUE 5. That at all relevant times, MMINCwas and remains a limited liability company organized under the laws of the State of New York with its office and principal place of business in the County of Kings, City and State of New York, and the owner of the subject premises and mortgagor. 5 of 49 FILED: QUEENS COUNTY CLERK 07/02/2024 02:46 PM INDEX NO. 713808/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 07/02/2024 6. That at all relevant times, MATHIEUwas and remains an individual residing in the County of Kings, City and State of New York, the sole member of the LLC and guarantor of the mortgage loan. 7. That at all relevant times, FLATlRONwas and remains a limited liability company organized under the laws of the State of NewYork with an office in the County of Nassau, State of NewYork, located at 150 GREATNECKROAD,GREATNECK,NY, 11561. 8. That at all relevant times, TOORAKwas and remains a foreign limited liability company organized under the laws of the State of Delaware with an office in the County of New York, State of NewYork, and doing business in the State of NewYork, with an office located at 28 LIBERTY STREET, NEWYORK, NY, 10005. 9. That at all relevant times, SPECIAL SERVICE, was and remains a limited liability company organized under the laws of the State of NewYork with an office in the County of Nassau, State of New York, located at 15 CUTTERMILLRD., STE 270, GREATNECK, NY, 11021. 10. That at all relevant times, SSANEwas and remains, upon information and belief a foreign limited liability company, duly formed organization or association, with an office in the County of Nassau, State of New York, located at 15 CUTTERMILLRD., STE 270, GREAT NECK, NY, 11021, and doing business in the State of NewYork. 11. That, at all relevant times, NORTHEAST was and remains a commercial bank organized under the laws of the State of Maine, with its principal place of business located at 500 Canal Street, Lewiston, Maine, 04240, and with an office located at 200 Berkeley Street, Boston, Massachusetts, 02116, and doing business in the State of New York. 6 of 49 FILED: QUEENS COUNTY CLERK 07/02/2024 02:46 PM INDEX NO. 713808/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 07/02/2024 12. That in addition to those persons and entities set forth as Defendants herein, there are likely other parties who may well be liable to Plaintiff but respecting whomPlaintiff currently lacks specific facts to permit him to name such person or persons as a party defendant. By not naming such persons or entities at this time, Plaintiffis not waiving her right to amendthis pleading to add such parties, should the facts warrant adding such parties. 13. That Plaintiff is informed and believes, and based on that information and belief alleges, that at all times mentioned in this Complaint, Defendants were the agents, servants, representatives and or employees of the other Defendants and in doing the things alleged in this Complaint were acting within the course and scope of such agency and employment. 14. That the transactions and events which are the subject matter of this Complaint all occurred within the State of NewYork. 15. That the subject premises is located in the County of Queens, State of NewYork, and, therefore, venue is proper pursuant to CPLR507. BACKGROUND ANDUNDERLYINGFACTS 16. That MMINCis fee owner of the premises, a legal two-family dwelling converted from a one-family home, by virtue of a Deed from Midfirst Bank, dated July 31, 2019, and recorded on August 8, 2019, with the Queens County Clerk, in CRFN2019000252973 17. That MMINCpurchased the property through Auction.com and MATHIEUmade a downpayment in the amount of $23,500.00 at the closing on July 31, 2019, and in addition to subsequently obtaining the Mortgage from FLATIRONto partially finance the purchase and paid out of pocket $106,312.21 from his own funds to close the purchase of the property, including for loan origination fees paid to FLATIRONwho did not provide a closing disclosure to Plaintiffs, and in addition to $5,500.00 for flood and property insurance. 7 of 49 FILED: QUEENS COUNTY CLERK 07/02/2024 02:46 PM INDEX NO. 713808/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 07/02/2024 I8. That prior thereto, MATHIEUwas solicited by Guy Shmuel (hereinafter "Guy"), in January 2019 at a real estate investors event who explained to MATHIEUhe was an "Auction Specialist" and loan officer employed by FLATIRON, and, thereafter, Guy repeatedly contacted MATHIEUon weekly basis to encourage him to invest in real estate. 19. That Guy promised MATHIEUhe can obtain a pre-approval letter for Plaintiff, a closing attorney to represent MATHHIEU,an appraisal, financing to close on the purchase of the Property, and additional financing to rehabilitate and repair the Property to make it marketable for sale. shop" 20. That Guy explained that he was essentially a "one stop who can provide Plaintiffs with financing for the purchase of the property, funding for rehabilitation ofthe Property, that was severely damaged and in disrepair because of Superstorm Sandy in 2012, and vacant for almost ten (10) years, an attorney and a title company, and, noteworthy is the fact that his FLATIRONbusiness card advertising "Up To 100 of Renovation Budget". 21. That, upon information and belief, Guy persuaded Plaintiffs into closing on the purchase of the property through high pressure telephone tactics and leads to different properties, flip" as he sensed MATHIEUwas extremely ambitious to engage in the "fix and real estate investment business but was likewise inexperienced in this business. 22. That Guy insisted MATHIEUform MMINCinstead of purchasing the property in his own individual name for, upon information and belief, purposes of charging Plaintiffs a higher interest rate than lawfully available to an individual in order to evade violating civil usury laws and NYSpredatory lending laws, and to secure funding in the amount of $376,000.00 to close on the purchase of the property. 8 of 49 FILED: QUEENS COUNTY CLERK 07/02/2024 02:46 PM INDEX NO. 713808/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 07/02/2024 23. That Guy referred Plaintiffs to the Law Offices of Aaron L Katsman, PC (hereinafter "Katsman") to represent Plaintiffs, but, upon information and belief, Katsman appeared to represent both Plaintiffs and_FLATIRON in the transaction, and thus, Katsman had a conflict of interest. 24. That Guy advised MATHIEUto contact Sharon Markowitz, Esq. from Katsman's office to represent Plaintiffs on behalf of Katsman at the closing after Guy "informed her on everything" , however, Ms. Markowitz is not even a memberof the NewYork State Bar, but rather, upon information and belief, is admitted only to practice law in Pennsylvania, and did not attend the closing, but rather, upon information and belief, Katsamn's office sent attorney "Anna Rovenskaya" "represent" to Plaintiffs, and, upon information and belief, attomey Rovenskaya either left the closing table prior to completion thereof or never even attended the closing. 25. That the fact that attorney present at the closing appeared to be representing both Plaintiff and FLATIRON, made MATHIEUanxious, but he was led to believe by Guy and Plaintiffs' Katsman's office that they would be working in best interests. 26. That Plaintiffs were never represented by independent counsel during the loan origination process, purchase of the Property and closing of the purchase of the Property. 27. That effective and competent counsel would have insisted that FLATIRONprovide a written commitment that it would provide Plaintiffs with sufficient funds to rehabilitate and restore the Property. 28. That despite Guy's promise and representation on behalf of FLATIRONto provide rehabilitation funding, Plaintiffs were not provided any rehabilitation funding or a construction loan at the closing of the purchase of the Property, and furthermore, FLATIRONalso represented to Plaintiffs that they would assist in clearing 220 violations against the premises, but never did. 9 of 49 FILED: QUEENS COUNTY CLERK 07/02/2024 02:46 PM INDEX NO. 713808/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 07/02/2024 29. That when Plaintiffs inquired about rehabilitation funding or a construction loan at the closing, he was informed by FLATIRONthat funding would be provided post-closing, which was memorialized in text messagesand voice mail recordings, and as a first-time, novice real estate investor and lay person, MATHIEUaccepted this response under the guise this was customary. 30. That the Property was in disrepair and, upon information and belief, required a minimum investment of $250,000.00 to repair it and restore it to market value, so that Plaintiffs could market it for sale, and FLATIRONwas aware that Plaintiffs did not have capital reserves to make the repairs and restore the Property without rehabilitation funding or a construction loan. 31. That, upon information and belief, FLATIRON obtained a false and misleading appraisal valuing the market value of the property as $655,000.00. 32. That the Mortgage Note has an interest rate of 10.5% rising to 23.99% in the event of any default under the promissory note or mortgage. 33. That Guy retracted his promise and FLATIRON never provided the additional rehabilitation funds or construction loan necessary to repair and restore the Property and market it sale.1 for 34. That when Plaintiffs contacted FLATIRON to inquire on the status of the rehabilitation funding or construction loan, Plaintiffs were advised that FLATIRON had already sold the loan and was not going to secure additional financing for Plaintiffs so that they could repair and restore the property, improve and sell it for market value. ' That, upon information and belief, Guy is no longer employed by FLATIRON and advised Plaintiffs that FLATIRON's lending practices are unscrupulous and designed to cause financial harm to consumers and investors, such as Plaintiffs herein. 10 of 49 FILED: QUEENS COUNTY CLERK 07/02/2024 02:46 PM INDEX NO. 713808/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 07/02/2024 35. That the Mortgage in the amount of $376,000.00 and interest executed and delivered by MMINCto FLATIRONat the closing was recorded in the Queens County Clerk's Office on August 8, 2019, in CRFN2019000252973. 36. That an Assignment of Leases and Rents from MMINCto FLATIRON executed and delivered at the closing was recorded in the Queens County Clerk's Office on August 8, 2019, in CRFN2019000252974. 37. That because FLATIRONfailed as promised to provide Plaintiffs with financing to rehabilitate and restore the property so that Plaintiffs could resell it at market values and because FLATIRONsold the mortgage loan, MATHIEUused his retirement savings to begin to rehabilitate and restore the property to marketable condition. 38. That after purchasing the Property and paying closing costs, Plaintiff was left with $6,000.00 in his bank account, and once Plaintiff realized he had no budget available to repair and restore the Property because FLATIRONbroke their promise to provide rehabilitation funding, Plaintiff was forced to list the property for sale with a realtor, but the biggest offer he received was $300,000.00, well below the alleged appraised value of $655,000.00, and as a result Plaintiff was forced to invest his retirement investment savings and use other loans to attempt to rehabilitate and restore the Property. 39. That after investing substantial monies into the Property, Plaintiffs again attempted to sell the Property, but was unable to close on the sale thereof because the Property was still not in marketable condition because of FLATIRON's failure to provide rehabilitation financing or a construction loan to complete the rehabilitation project. 40. That without additional funding to complete the rehabilitation of the property and inability to sell it because of the Covid-19 pandemic, Plaintiffs defaulted on the mortgage loan, 11 of 49 . . FILED: QUEENS COUNTY CLERK 07/02/2024 02:46 PM INDEX NO. 713808/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 07/02/2024 but cured his default by making late mortgage payments for October, November and December 2019 payments. 41. That FLATIRONassigned the mortgage to TOORAK by Assignment of Mortgage on January 8, 2020, and recorded on January 29, 2020, in CRFN, 2020000036284, and by Confirmatory Assignment of Mortgage between the same parties, dated August 27, 2019, and recorded on April 30, 2020, in CRFN2020000136591. 41. That on or March 16, 2020, Plaintiffs notified TOORAK that MATHIEUcontracted Plaintiffs' COVID-19 and was suffering from a hardship, that TOORAKacknowledged hardship and placed the mortgage in forbearance for the next 6 months, ending on October 31, 2020, and advised Plaintiffs the forbearance period may be extended beyond October 31, 2020. 42. That in addition to contracting COVID-19, MATHIEUalso became unemployed in 2020 because of the pandemic, and several potential buyers of the property never closed because of the pandemic. 43. During the forbearance period, Plaintiffs attempted to find a buyer and satisfy the mortgage loan, but his efforts were mostly unsuccessful as the buyer pool was limited due to COVID-19 pandemic. 44. That Plaintiffs marketed the Property at an asking price of $550,000.00 but could not find a buyer despite FLATIRON's previous appraisal of the property for $650,000.00. 45. That the Mortgage was assigned by TOORAKto FLATIRON, by Assignment of Mortgage, dated July 31, 2020, and recorded on September 14, 2020, in the Queens County Clerk's office in CRFN2020000256350. 46. That on or about August 24, 2020, Plaintiffs received a letter from Friedman Vartolo LLP informing me that Plaintiffs were in default and requested that Plaintiffs "...bring your 12 of 49 FILED: QUEENS COUNTY CLERK 07/02/2024 02:46 PM INDEX NO. 713808/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 07/02/2024 account current by paying the reinstatement amount no later than September 8, 2020", even though the mortgage loan was still in the forbearance period granted by TOORAK. 47. That the aforesaid notice did not provide Plaintiffs with an amount that was required to reinstate the loan, while loan was in forbearance. 48. That the Mortgage was assigned by FLATIRONto Defendant, SPECIAL SERVICE AMERICALLC (hereinafter "SPECIAL SERVICE"), by Assignment of Mortgage, dated August 21, 2020, and recorded on September 14, 2020, in the Queens County Clerk's office in CRFN 2020000256351. 49. That in September 2020, Plaintiffs contact TOORAK,who had previously advised him that he may be able to extend the forbearance period, but to resume making monthly payments, and at that time was advised by TOORAKthat it was no loner serving the loan and to contract FLATIRON. 50. That Plaintiffs followed TOORAK'sadvice and attempted to contact FLATIRON, and after three weeks FLATIRON's representative herself as "Amy" advised (3) identifying Plaintiffs that the loan was transferred to SPECIAL SERVICES. 51. That Plaintiffs contacted SPECIAL SERVICESwho advised him that he could not resume monthly payments and reinstate the loan, but rather Plaintiffs could only payoff and satisfy the entire loan