A quartet of investors say they’re only helping the dispossessed get what’s due. But their actions have exploited family divisions — and relatives on both sides of the deals say they’ve been ripped off.
BY GEORGE JOSEPH AND SAMANTHA MALDONADOAPR 17, 2023, 5:00AM EDT
Four years ago, Deborah Thomas got a call from an unknown number.
The stranger on the line introduced himself as Eddie Doran and informed her that he was a new co-owner or soon to be co-owner of her home — a two-story brownstone just blocks away from the upscale restaurants and bars that gentrification had brought to Bedford-Stuyvesant’s Malcolm X Boulevard.
Doran’s announcement seemed ridiculous to the 56-year-old Thomas and her husband, Aston Smith, a retired Jamaican-born municipal truck driver. Smith bought the house in 1995, paid taxes on it and co-owned it with Thomas and his mother, who had recently passed away.
But Doran and his co-investors had found Aston Smith’s estranged brother, Raymond Smith, in North Carolina. After their mother’s death, Raymond had inherited half of her real estate holdings, including 16.66% of the Brooklyn brownstone. The investors were urging him to sell them that minority share — a transaction that, through the intricacies of New York state law, would soon threaten Smith and Thomas’ ability to stay in their home.
By law, anyone with any fractional interest in a property can go to court and demand that a judge order its sale, splitting the proportional proceeds among its recognized shareholders.
Three months after scooping up Smith’s brother’s inheritance stake, the investors did just that.
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“They want to come and say, ‘We want our share now. So if you don’t have any money, we’re going to take you to court and sue you,’” Thomas said.
In order to avoid litigation that could have forced a sale of the home in which they were living, Thomas and her husband wound up paying Doran and his two co-investors $235,000 to buy the share the Doran operation had picked up from the estranged sibling for $65,000.
In an interview with THE CITY, Doran explained that the looming forced sale of the house triggered the eventual agreement with the couple.
“We were gonna squeeze them and sell [the property] at auction, and then we decided to settle,” he recalled.
Ingenious Business Model
Deborah Thomas and Aston Smith aren’t alone.
An investigation by THE CITY found that a group of investors — Doran, Jonathan Marcus, Vincent Longobardi and Earl Davis — have acquired or attempted to acquire fractional stakes in more than 50 properties, mostly in Brooklyn’s gentrifying historically Black and Latino neighborhoods, in some cases enriching themselves many times more than the heirs they profess to help.
Their ingenious business model is rooted in finding far-flung heirs, leveraging family animosities and pushing or sweet-talking longtime Brooklyn residents into deals that some now say they regret or feel they had no choice but to make. One of the speculators is a convicted burglar. The other three were convicted for possession of stolen property.
Each spoke extensively with THE CITY, portraying themselves as crusaders, uplifting the downtrodden and furthering racial justice. They pointed out that comparisons between their fractional deed payments and what the properties are eventually sold for do not factor in the possible litigation or financial risk involved in each of these deals.
“I’m giving voiceless people options where they didn’t have any. I’m trying to work something out with the other owners in a way that’s positive for everyone,” said Marcus, expressing a view the other three echoed.
“I’m not looking to steal generational wealth from families. But I also didn’t create the situation where you and your other co-owners are at such odds with each other that there are irreconcilable differences,” he continued.
While such real estate transactions have been scrutinized at times by courts and city officials, much of it is in fact legal through a little known but historically fraught legal tenet called “partition,” which speculators have used to extract wealth from generations of Black and Latino families across the country.
In New York City today, the opportunities for profit through such maneuvers are especially ripe in neighborhoods where real estate is rapidly appreciating and longtime homeowners often die without wills, which can leave a scattering of heirs whose fractional interests speculators can pursue for purchase. Even when homeowners do have wills, they may be written in a vague manner, opening the door to fractious family disputes over what the deceased intended.
This vulnerable state of affairs prompted state lawmakers to pass a law in 2019 intended to curtail predatory partition activity. Today, lawmakers are mulling a bill which would bolster New York’s consumer protection rules, which experts say could protect residents approached for their fractional deed interests.
Deed plays are nothing new in Brooklyn. Vincent Longobardi, the son of a Fort Greene grocer, said he first got wind of the business model back in the eighties, when he was a young entrepreneur lapping up knowledge of the real estate business from the “old-timers” at foreclosure auctions. Now an old-timer himself, Longobardi has worked with Marcus and Doran for more than two decades. Longobardi said Doran brought Davis into the fold more recently, though Doran prefers to call him an “associate” rather than a “partner.”
“Vinnie lends and I do the litigation. The other people just find,” said Doran, referring to Marcus and Davis. “So if they find it, there’s a finder fee, or they become partners.” Dozens of the deed maneuvers involving Doran, Longobardi, Marcus and Davis have resulted in litigation, much of which is still pending. Two recent cases reflect the substantial amounts of money at stake in these deals and the share that the real estate operators can siphon off.
In 2019, Davis bought up the interests of a Bedford-Stuyvesant brownstone after agreeing to pay its five apparent heirs at least $448,500 for each of their 20% stakes in the property, according to city deed records. Three days after securing the last of these interests, allowing him to claim 100% of the property, Davis’ firm sold the shares for $880,000 to another firm — nearly double the amount promised to the heirs in the deed filings.
And at least one of those heirs, Leonard Pressley, alleges Davis only paid him $15,000, a small fraction of what he promised him. Davis claims he paid him much more, but did not provide evidence of this to THE CITY, despite promising to do so. Davis also claimed he only made about $10,000 on the deal, asserting that the title company listed errantly low sale prices in the city deed records.
In 2017, Longobardi and Doran, through an associated company, paid $275,000 to another company for half the ownership of a Crown Heights rowhouse in a historic district. The home had been purchased in 1978 and left to six heirs, three of whom had sold their shares to that separate company for $150,000 total. In 2019, Longobardi and Doran paid $30,000 to a fourth heir for her share of the property, bringing the investors’ ownership to two-thirds of the home. Two sisters, who both live out of state, own the other one-third.
After a court battle, the parties determined the house should be put on the market for an initial $2 million, per a March 2023 settlement. If it sells for that, Longobardi and Doran could make $1.3 million before fees — $995,000 more than they spent on the purchase. (In a statement, the businessmen noted the highest offer received has been $1.1 million, significantly lowering their potential earnings.)
Want to talk with a reporter about your own property? Has a partition action affected your family’s home? Get in touch with THE CITY’s investigative reporter George Joseph at gjoseph@thecity.nyc or 929-486-4865.
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Our people have been going through it forever man. I glad those men and women who poured blood sweat and tears into being able to buy that land all over the country aren’t here to see what happened to it
