Case 1:21-cv-00984-FB-RML Document 1 Filed 02/23/21 Page 1 of 111 PageID #: 1
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF NEW YORK
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`
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`CIVIL ACTION NO.: _________________
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`
`
`
`
`
`
`COMPLAINT
`
`ALTISOURCE S.À R.L., ALTISOURCE
`ONLINE AUCTION, INC., and REALHOME
`SERVICES AND SOLUTIONS, INC.,
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`
`
`
`
`
`
`
`
`
`Plaintiffs,
`
`
`v.
`
`CHINAPEN A/K/A
`MADRAMOOTHU
`RICHIE CHINAPEN, VORO LLC, ROSA
`RAMGOBIN A/K/A ROSA CHINAPEN, 912
`EAST GROUP CORP, 14 POTTERS GROUP
`CORP, HORN LANE GROUP CORP,
`CANTERBURY DRIVE GROUP CORP,
`3537 DANIEL CRESCENT GROUP CORP,
`204 1ST AVENUE GROUP CORP, TWIN
`RIVER GROUP CORP, ROBBY LANE
`GROUP CORP, LINCOLN 155 GROUP
`CORP, 38 LELAND GROUP CORP, 25
`PARMA GROUP CORP, AMC83S GROUP
`CORP, NORTH SPUR GROUP CORP, 612
`MILLER
`AVE
`GROUP
`CORP,
`SEAFORD2221
`GROUP
`CORP,
`10
`HOLLYWOOD GROUP CORP, BOOTH11
`GROUP CORP, CHIPS COURT GROUP
`CORP, GREAT NECK12 GROUP CORP,
`OLDER2 GROUP CORP, SAVE144 GROUP
`CORP, 2068 ARTHUR GROUP CORP,
`LFA1880 GROUP CORP, AMC66P GROUP
`CORP, OSSI1138 GROUP CORP, OAKA26
`GROUP CORP, ROSE100 GROUP CORP,
`670 ELTON GROUP CORP,
`3722 63RD LLC, RAKHI SINGH SHELDON
`MAY & ASSOCIATES, P.C., ALYSSA
`NGUYEN, TUNG NGUYEN, NORMAN
`REMEDIOS, DAVID
`TORRES AND
`YVETTE MALILAY,
`
`
`
`
`Defendants.
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`

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`Case 1:21-cv-00984-FB-RML Document 1 Filed 02/23/21 Page 2 of 111 PageID #: 2
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`Altisource S.à r.l. (“Altisource”), Altisource Online Auction, Inc. (“AOA”) and
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`REALHome Services and Solutions, Inc. (“RHSS, ” collectively with Altisource and AOA,
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`“Plaintiffs”) by and through their undersigned attorneys, for their Complaint against Defendants
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`Madramoothu Chinapen a/k/a Richie Chinapen (“Chinapen”), and Voro LLC (collectively with
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`Chinapen, “Buying Agent Defendants”); Rosa Ramgobin a/k/a Rosa Chinapen (“Ramgobin”),
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`912 East Group Corp, 14 Potters Group Corp, Horn Lane Group Corp, Canterbury Drive Group
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`Corp, 3537 Daniel Crescent Group Corp, 204 1st Avenue Group Corp, Twin River Group Corp,
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`Robby Lane Group Corp, Lincoln 155 Group Corp, 38 Leland Group Corp, 25 Parma Group
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`Corp, AMC83S Group Corp, North Spur Group Corp, 612 Miller Ave Group Corp, Seaford2221
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`Group Corp, 10 Hollywood Group Corp, Booth11 Group Corp, Chips Court Group Corp, Great
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`Neck12 Group Corp, Older2 Group Corp, Save144 Group Corp, 2068 Arthur Group Corp,
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`LFA1880 Group Corp, AMC66P Group Corp, OSSI1138 Group Corp, Oaka26 Group Corp,
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`Rose100 Group Corp, 670 Elton Group Corp, defendant 3722 63rd LLC and Rakhi Singh
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`(collectively, “Buyer Defendants”); Sheldon May & Associates, P.C. (“Sheldon May”), Alyssa
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`Nguyen and Tung Nguyen (collectively with Sheldon May, “Closing Agent Defendants”);
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`Norman Remedios, David Torres and Yvette Malilay (collectively, “Conspiring Employee
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`Defendants”) (Buying Agent Defendants, Buyer Defendants, Closing Agent Defendants and
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`Conspiring Employee Defendants are collectively referred to herein as “Defendants”) state as
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`follows, on knowledge as to themselves and on information and belief as to all other matters,
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`which are likely to have evidentiary support after a reasonable opportunity for discovery:
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`2
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`

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`INTRODUCTION
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`1.
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`This matter arises out of Defendants’ criminal racketeering scheme to manipulate
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`plaintiff AOA’s online property marketing and auction platform, Hubzu, to allow the Buyer
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`Defendants to purchase properties throughout the State of New York at prices below fair market
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`value in exchange for kickback payments and other valuable consideration to the Conspiring
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`Employee Defendants and Closing Agent Defendants.
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`2.
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`During the disruption of ordinary business operations caused by the Covid-19
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`pandemic and resulting shelter-in-place orders, the Defendants executed their scheme by: (i)
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`disclosing confidential reserve prices established by property sellers; (ii) submitting fraudulent
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`bids well above fair market value to artificially inflate the bid amounts being placed on
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`properties and thereby drive away bona fide competing bidders; (iii) disregarding bona fide third
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`party bids on the pretext that they were harmful bidders; (iv) fraudulently inducing Plaintiffs’
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`seller clients to accept prices below fair market value to compensate for non-existent defects and
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`valuation concerns; and (v) providing excessive and unauthorized seller credits at closing to
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`reduce the price for the benefit of the conspiring Defendants.
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`3.
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`Defendants succeeded in fraudulently purchasing at least 33 properties through
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`their conspiracy, causing Plaintiffs and their seller clients to suffer extensive damages including,
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`among others: (i) the difference between the price that should have been paid for the properties
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`and the price the Buyer Defendants actually paid; (ii) reduced commissions and buyers’
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`premiums payable to Plaintiffs and their affiliates; (iii) interference with Plaintiffs’ business
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`relationships with sellers and participants in the Hubzu auction process; (iv) Plaintiffs’ loss of
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`reputation and good will and the damage caused to the Hubzu platform; and (v) the attorneys’
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`fees and other expenses Plaintiffs incurred as a result of Defendants’ conspiracy and misconduct.
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`3
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`

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`4.
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`Because Defendants utilized countless wire transmissions across state lines and
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`into foreign countries to carry out their conspiracy, Defendants are jointly and severally liable
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`under the federal Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961 et seq.
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`(“RICO”) for three times the damages suffered by Plaintiffs, as well as Plaintiffs’ attorneys’ fees
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`and costs.
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`PARTIES, JURISDICTION AND VENUE
`Plaintiff Altisource Solutions S.a r.l., is a limited liability company duly
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`5.
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`organized and existing under the laws of Luxembourg, with its principal place of business
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`located in Luxembourg.
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`6.
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`Plaintiff Altisource Online Auction, Inc. is a corporation duly organized and
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`existing under the laws of the State of Delaware, with its principal place of business located in
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`Atlanta, Georgia.
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`7.
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`Plaintiff REALHome Services and Solutions, Inc. is a corporation duly organized
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`and existing under the laws of the State of Florida, with its principal place of business located in
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`Atlanta, Georgia.
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`8.
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`Defendant Madramoothu Chinapen is a citizen of New York who resides in
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`Queens County, New York.
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`9.
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`Defendant Voro LLC is a limited liability company duly organized and existing
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`under the laws of the State of New York, with its principal place of business located at 404 Glen
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`Cove Avenue, Suite 202, Sea Cliff, New York, 11579. Voro LLC is an entity associated with
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`defendant Chinapen and Chinapen signed several property transaction documents on behalf of
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`Voro LLC.
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`10.
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`Defendant Rosa Ramgobin a/k/a Rosa Chinapen is a citizen of New York who
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`resides in Queens County, New York.
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`4
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`11.
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`Defendant 912 East Group Corp is a corporation duly organized and existing
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`under the laws of the State of New York, with its principal place of business located at 104-37
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`108 Street, S. Richmond Hill, New York, 11419.
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`12.
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`Defendant 14 Potters Group Corp is a corporation duly organized and existing
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`under the laws of the State of New York, with its principal place of business located at 177A E.
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`Main Street, Suite 176, New Rochelle, New York 10801.
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`13.
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`Defendant Horn Lane Group Corp is a corporation duly organized and existing
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`under the laws of the State of New York, with its principal place of business located at 104-37
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`108 Street, S. Richmond Hill, New York, 11419.
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`14.
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`Defendant Canterbury Drive Group Corp is a corporation duly organized and
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`existing under the laws of the State of New York, with its principal place of business located at
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`104-37 108 Street, S. Richmond Hill, New York, 11419.
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`15.
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`Defendant 3537 Daniel Crescent Group Corp is a corporation duly organized and
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`existing under the laws of the State of New York, with its principal place of business located at
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`87-58 111 Street, Richmond Hill, New York 11418.
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`16.
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`Defendant 204 1st Avenue Group Corp is a corporation duly organized and
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`existing under the laws of the State of New York, with its principal place of business located at
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`104-37 108 Street, S. Richmond Hill, New York, 11419.
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`17.
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`Defendant Twin River Group Corp is a corporation duly organized and existing
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`under the laws of the State of New York, with its principal place of business located at 104-37
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`108 Street, S. Richmond Hill, New York, 11419.
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`5
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`18.
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`Defendant Robby Lane Group Corp is a corporation duly organized and existing
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`under the laws of the State of New York, with its principal place of business located at 104-37
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`108 Street, S. Richmond Hill, New York, 11419.
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`19.
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`Defendant Lincoln 155 Group Corp is a corporation duly organized and existing
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`under the laws of the State of New York, with its principal place of business located at 104-37
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`108 Street, S. Richmond Hill, New York, 11419.
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`20.
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`Defendant 38 Leland Group Corp is a corporation duly organized and existing
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`under the laws of the State of New York, with its principal place of business located at 10437
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`108th Street, 1st Floor, S. Richmond Hill, New York 11419.
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`21.
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`Defendant 25 Parma Group Corp is a corporation duly organized and existing
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`under the laws of the State of New York, with its principal place of business located at 104-37
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`108 Street, S. Richmond Hill, New York, 11419.
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`22.
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`Defendant AMC83S Group Corp is a corporation duly organized and existing
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`under the laws of the State of New York, with its principal place of business located at 104-37
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`108 Street, S. Richmond Hill, New York, 11419.
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`23.
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`Defendant North Spur Group Corp is a corporation duly organized and existing
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`under the laws of the State of New York, with its principal place of business located at 104-37
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`108 Street, S. Richmond Hill, New York, 11419.
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`24.
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`Defendant 612 Miller Ave Group Corp is a corporation duly organized and
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`existing under the laws of the State of New York, with its principal place of business located at
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`104-37 108 Street, S. Richmond Hill, New York, 11419.
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`6
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`25.
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`Defendant Seaford2221 Group Corp is a corporation duly organized and existing
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`under the laws of the State of New York, with its principal place of business located at 104-37
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`108 Street, S. Richmond Hill, New York, 11419.
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`26.
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`Defendant 10 Hollywood Group Corp is a corporation duly organized and
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`existing under the laws of the State of New York, with its principal place of business located at
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`104-37 108 Street, S. Richmond Hill, New York, 11419.
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`27.
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`Defendant Booth11 Group Corp is a corporation duly organized and existing
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`under the laws of the State of New York, with its principal place of business located at 104-37
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`108 Street, S. Richmond Hill, New York, 11419.
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`28.
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`Defendant Chips Court Group Corp is a corporation duly organized and existing
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`under the laws of the State of New York, with its principal place of business located at 104-37
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`108 Street, S. Richmond Hill, New York, 11419.
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`29.
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`Defendant Great Neck12 Group Corp is a corporation duly organized and existing
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`under the laws of the State of New York, with its principal place of business located at 10437
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`108th Street, S. Richmond Hill, New York, 11419.
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`30.
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`Defendant Older2 Group Corp is a corporation duly organized and existing under
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`the laws of the State of New York, with its principal place of business located at 10437 108th
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`Street, S. Richmond Hill, New York, 11419.
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`31.
`
`Defendant Save144 Group Corp is a corporation duly organized and existing
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`under the laws of the State of New York, with its principal place of business located at 177A E.
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`Main Street, Suite 176, New Rochelle, New York 10801.
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`7
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`32.
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`Defendant 2068 Arthur Group Corp is a corporation duly organized and existing
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`under the laws of the State of New York, with its principal place of business located at 104-37
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`108 Street, S. Richmond Hill, New York, 11419.
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`33.
`
`Defendant LFA1880 Group Corp is a corporation duly organized and existing
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`under the laws of the State of New York, with its principal place of business located at 10437
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`108th Street, S. Richmond Hill, New York, 11419.
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`34.
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`Defendant AMC66P Group Corp is a corporation duly organized and existing
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`under the laws of the State of New York, with its principal place of business located at 104-37
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`108 Street, S. Richmond Hill, New York, 11419.
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`35.
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`Defendant OSSI1138 Group Corp is a corporation duly organized and existing
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`under the laws of the State of New York, with its principal place of business located at 10437
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`108th Street, S. Richmond Hill, New York, 11419.
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`36.
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`Defendant Oaka26 Group Corp is a corporation duly organized and existing under
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`the laws of the State of New York, with its principal place of business located at 10437 108th
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`Street, S. Richmond Hill, New York, 11419.
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`37.
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`Defendant Rose100 Group Corp is a corporation duly organized and existing
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`under the laws of the State of New York, with its principal place of business located at 104-37
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`108 Street, S. Richmond Hill, New York, 11419.
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`38.
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`Defendant 670 Elton Group Corp is a corporation duly organized and existing
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`under the laws of the State of New York, with its principal place of business located at 104-37
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`108 Street, S. Richmond Hill, New York, 11419.
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`8
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`39.
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`Defendant 3722 63rd LLC is a limited liability company duly organized and
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`existing under the laws of the State of New York, with its principal place of business located at
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`104-37 108 Street, S. Richmond Hill, New York, 11419.
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`40.
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`Defendant Rakhi M Singh is a citizen of New York who resides in Queens
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`County, New York.
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`41.
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`Defendant Sheldon May & Associates, P.C. is a professional corporation with its
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`principal place of business located at 255 Merrick Road, Rockville Centre, New York 11570.
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`42.
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`Defendant Allysa Nguyen is a citizen of New York who resides in Nassau
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`County, New York. Allysa Nguyen is a paralegal at Sheldon May.
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`43.
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`Defendant Tung Nguyen is a citizen of New York who resides in Nassau County,
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`New York.
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`44.
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`45.
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`New Jersey.
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`Defendant Norman Remedios is a citizen of Mumbai, India.
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`Defendant David Torres is a citizen of New Jersey who resides in Essex County,
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`46.
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`Defendant Yvette Malilay is a citizen of Georgia who resides in Fulton County,
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`Georgia.
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`47.
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`The Court has personal jurisdiction over each of the Defendants because they
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`have transacted business within the State of New York, including the transactions at issue in this
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`litigation, have committed tortious acts within the State of New York and all of the Defendants
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`with the exception of Norman Remedios, David Torres and Yvette Malilay reside in the State of
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`New York.
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`48.
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`The Court has subject matter jurisdiction over the RICO claims under 28 U.S.C. §
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`1331 and 18 U.S.C. § 1964(a), and over the related state-law claims under 28 U.S.C. § 1367.
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`9
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`49.
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`Venue is proper in this District under 28 U.S.C. § 1391(b)(1) because the majority
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`of the Defendants reside in this District and all of the Defendants with the exception of Norman
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`Remedios, David Torres and Yvette Malilay are residents of the State of New York where this
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`District is located. Venue is also proper in this District under 28 U.S.C. § 1391(b)(1) because a
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`substantial part of the events or omissions giving rise to the claims occurred here and a
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`substantial part of the properties that are the subject of this action are situated here.
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`GENERAL ALLEGATIONS
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`The Hubzu Online Property Marketing and Auction Platform
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`50.
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`Plaintiff Altisource is an integrated service provider and marketplace for the real
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`estate and mortgage industries. Altisource is the parent company of plaintiffs AOA and RHSS.
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`51.
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`Plaintiff AOA operates Hubzu, one of the largest online home auction marketing
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`platforms for licensed real estate brokers and sellers to market properties and manage bids for
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`those properties. Hubzu, which is hosted on the website www.hubzu.com, allows sellers to
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`market their inventory directly to serious buyers and investors, obtain and evaluate bids, and use
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`technology to streamline transactions.
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`52.
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`Sellers that desire to auction properties on Hubzu provide available information
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`regarding the property and set a starting bid price that is disclosed on the Hubzu platform. Sellers
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`also set a confidential reserve price that is disclosed to a limited number of employees who work
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`for Plaintiffs but is not disclosed to bidders or made publicly available in any way.
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`53.
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`In most cases – including with respect to all of the properties relevant to this
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`action –properties marketed on the Hubzu platform are also listed for sale on a multiple listing
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`service property database (“MLS”) accessible to real estate brokers and agents.
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`10
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`54.
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`Potential purchasers that desire to bid on a property through the Hubzu platform
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`register their contact information and then submit their bids electronically through the platform.
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`55.
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`A single auction “cycle” on the Hubzu platform typically lasts seven days unless
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`the seller specifically requests a different duration. It is not uncommon for a property to have
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`multiple auction cycles before the seller accepts a bid.
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`56.
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`A given auction cycle may conclude with no bids on the property, one or more
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`bids below the confidential reserve price, one or more bids above the confidential reserve price,
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`or a combination of the latter two.
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`57.
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`At the end of the auction cycle, the seller has the right, in its sole discretion, to
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`decide whether to invite a bidder to enter into a purchase and sale agreement (“PSA”). The
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`conclusion of the auction does not give the prevailing bidder a legal or contractual right to
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`purchase the property. A contract to purchase the property is created only if both the seller and
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`bidder execute a PSA.
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`58.
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`The seller has no obligation to accept a particular bid, including the highest bid.
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`The seller can also reject all bids and elect to place the property back into auction for another
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`auction cycle or remove the property from Hubzu altogether and explore alternative channels for
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`disposition of the property.
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`59.
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`If the bidder’s price exceeds the reserve price and satisfies other seller criteria,
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`then the bidder and seller may negotiate and execute a PSA.
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`60. With respect to the properties that are the subject of this action (the “Impacted
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`Properties,” as defined below), PHH Mortgage Corporation acted as the agent of the sellers and
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`signed the PSAs on their behalf.
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`11
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`61.
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`From time to time, a prevailing bidder may “fall out” if the bidder refuses to
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`honor its bid or fails to respond to enter into a PSA. The seller, at its sole discretion, can then
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`negotiate a PSA with a different bidder, place the property back into auction for another auction
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`cycle, or remove the property from Hubzu altogether and explore alternative channels for
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`disposition of the property.
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`62.
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`Plaintiff AOA, which operates the Hubzu platform, receives a “buyer’s premium”
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`for properties that are marketed on Hubzu in an auction marketing format which result in a
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`consummated sale. The buyer pays the buyer’s premium in addition to the purchase price for the
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`property.
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`63.
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`Plaintiff RHSS, as the listing broker for properties marketed on Hubzu, receives
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`all or a portion of the listing broker commission that is paid on consummated sales. The listing
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`broker commission is deducted from the proceeds of the sale.
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`64.
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`Prospective buyers who
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`register
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`to use
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`the Hubzu auction platform
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`unconditionally agree to Hubzu’s terms and conditions. A true and correct copy of Hubzu’s
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`terms and conditions is attached hereto as Exhibit A.
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`65.
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`Among other things, Hubzu’s terms and conditions require bidders to comply
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`with all applicable local, state, federal and international laws, statutes, ordinances and regulations
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`regarding their use of Hubzu and its affiliated websites.
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`66.
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`Prospective buyers also accept and agree to the following indemnification
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`obligation as a condition of bidding on the Hubzu platform:
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`You agree to indemnify, defend and hold the Seller, the Licensed Real Estate
`Agent, Altisource, AOA and their respective parents, subsidiaries, affiliates,
`officers, directors, agents, employees, and representatives harmless from any
`claim or demand, including a claim for attorneys’ fees, made by any third party
`due to, or arising out of, (a) your breach of any terms of this Agreement or any of
`the documents incorporated by reference herein, (b) your acts or omissions in
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`12
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`connection with your use of Hubzu, (c) your negligence, gross negligence, willful
`misconduct, (d) your violation of any law, rule or regulation or (e) your violation
`of the rights of a third party.
`
`
`Defendants’ Conspiracy to Manipulate Hubzu Auctions and Property Sales
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`67.
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`Beginning in or around January 2020, Defendants devised and initiated their
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`scheme to manipulate the Hubzu platform to purchase residential properties at prices below fair
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`market value that could not be obtained by ordinary and lawful participation in an auction
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`marketing format consistent with Hubzu’s governing terms and conditions.
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`68.
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`Specifically, the Buying Agent Defendants, the Buyer Defendants and the Closing
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`Agent Defendants conspired with at least three then-current (now former) employees of Plaintiffs
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`– Norman Remedios, David Torres and Yvette Maliliay – to manipulate the Hubzu platform and
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`defraud Plaintiffs and their seller clients.
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`69.
`
`Defendant Norman Remedios (“Remedios”), Senior Manager, Asset Management
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`- Settlement Oversight was one of the primary participants in the conspiracy. By virtue of his
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`position, Remedios had access to confidential information and operations that allowed him to,
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`among other things, access the reserve price, obtain bidders’ contact information, request
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`downward pricing adjustments, persuade sellers to accept artificially depressed prices, falsely
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`identify legitimate bidders as harmful, and request or approve seller credits, all of which
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`Remedios used to perpetrate the fraud described herein. Certain other Defendants paid illegal
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`kickback payments to Remedios for his participation in furtherance of their fraudulent
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`conspiracy and its objectives.
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`70.
`
`Defendant Yvette Malilay (“Malilay”), Asset Management Specialist and
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`Coordinator, introduced Remedios to certain of the Buying Agent Defendants and Buyer
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`Defendants. She also furthered Defendants’ conspiracy by helping to facilitate certain fraudulent
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`13
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`transactions and illegal kickback payments from one or more Buying Agent Defendants and
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`Buyer Defendants.
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`71.
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`In the ordinary course of her job duties, Malilay communicated with buyers and
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`their agents to address property deed issues that arose in connection with their transactions.
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`72.
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`On at least one occasion, after a buyer expressed dissatisfaction with Hubzu and
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`inquired whether there was any other way to purchase properties, Malilay instructed the buyer to
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`contact Remedios who would circumvent the normal process and negotiate the sale of properties
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`at below market prices using back channel methods.
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`73.
`
`Defendant David Torres (“Torres”), a senior broker for RHSS in New York, acted
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`as the intermediary between the Buying Agent Defendants, the Buyer Defendants, and the
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`Closing Agent Defendants, on the one hand, and Remedios, on the other hand, to share
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`confidential information and facilitate the fraudulent transactions. Behind the scenes, Torres
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`would communicate with Chinapen, directly or through one of Chinapen’s agents, Remedios and
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`other Defendants about their conspiracy by sharing confidential pricing information and
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`discussing ways to sell the properties to the Buyer Defendants at significantly discounted prices.
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`Torres would then try to make the fraudulent transactions look legitimate on the surface by
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`sending and receiving emails, purportedly on behalf of the seller, that would falsely suggest that
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`the terms of the transaction arose organically by ordinary means. For example, if Remedios and
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`Torres revealed the reserve price to Chinapen and told Chinapen during private conversations
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`that he could purchase the property for $1,000 over the reserve price, Chinapen would have one
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`of his agents send an “official” email to Torres stating that they would purchase the property for
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`the secretly negotiated price, and Torres would send follow-up emails internally at Altisource
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`and to Chinapen or one of Chinapen’s agents acting as if he thought the offer was legitimate.
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`14
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`Case 1:21-cv-00984-FB-RML Document 1 Filed 02/23/21 Page 15 of 111 PageID #: 15
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`74.
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`The Defendants employed several different tactics to execute their fraudulent
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`scheme:
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`
`
`
`
`
`
`
`
`a. The Buying Agent Defendants and Buyer Defendants would procure
`fraudulent and excessive bids that the particular bidder had no intention of
`ever paying, for the purpose of driving the price sufficiently high to
`discourage legitimate bidders from bidding on the property, thereby creating
`an opportunity for the Buyer Defendants to coordinate with the Conspiring
`Employee Defendants to purchase the property for less than fair market value
`when the fraudulent bidder inevitably “fell out” of the auction;
`
`b. The Conspiring Employee Defendants would disclose confidential property
`information to the Buying Agent Defendants, the Buyer Defendants and/or the
`Closing Agent Defendants, including reserve prices for the properties, to
`allow the Buyer Defendants to purchase properties at prices as close as
`possible to the reserve price;
`
`c. The Buying Agent Defendants, the Buyer Defendants and/or the Closing
`Agent Defendants would falsely identify a problem with a property that
`allegedly decreased its value. Remedios would then knowingly and
`intentionally misrepresent the existence of the issue to the seller to induce the
`seller to approve an unwarranted reduction in price;
`
`d. Remedios would apply excessive and unauthorized seller credits at closing to
`reduce the final sale price for the benefit of the Buyer Defendants and the rest
`of the conspirators; and
`
`e. Remedios would ignore higher auction bids in favor of the Buyer Defendants
`and/or the Buying Agent Defendants, thereby clearing the path for the Buyer
`Defendants to purchase the properties.
`
`Defendants’ Scheme Uncovered
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`75.
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`In or around July 2020, Plaintiffs received their first indication of Defendants’
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`fraudulent conduct when a third-party bidder (the “Third Party Bidder”) not associated with
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`Defendants emailed a RHSS broker to complain that defendant Chinapen was engaged in fraud
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`in connection with the auction and sale of a property located at 35 Chestnut Stump Road, Fort
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`Salonga, NY 11768 (the “35 Chestnut Property”).
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`15
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`

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`Case 1:21-cv-00984-FB-RML Document 1 Filed 02/23/21 Page 16 of 111 PageID #: 16
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`76.
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`The Third Party Bidder had submitted a bid on the 35 Chestnut Property in each
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`of five auction cycles between April 18, 2020 and June 15, 2020. None of his bids met the
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`seller’s confidential reserve price, but the Third Party Bidder was able to see that no other bids
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`were submitted for the property during those five cycles.
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`77.
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`Then, on June 17, 2020, defendant Chinapen called the Third Party Bidder and
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`told him that he had secured the contract to purchase the 35 Chestnut Property. Chinapen also
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`implied that the Third Party Bidder could buy the property from Chinapen.
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`78.
`
`The next day, defendant Ramgobin – who, on information and belief, is related to
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`defendant Chinapen and resides at the same address – incorporated Chestnut Stump Group
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`Corporation as a New York corporation for the purpose of purchasing the 35 Chestnut Property.
`
`79.
`
`Independent from the Hubzu platform, on June 23, 2020, the MLS listing price for
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`the 35 Chestnut Property was reduced to $1,100,000.
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`80.
`
`That same day another auction cycle started for the 35 Chestnut Property on
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`Hubzu. This time, the Third Party Bidder was not the sole bidder. Another bidder, defendant
`
`Singh, was now also vying for the 35 Chestnut Property.
`
`81.
`
`The Third Party Bidder submitted a bid for the newly-reduced MLS listing price
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`of $1,100,000, but Singh outbid the Third Party Bidder. A bidding war ensued, with Singh
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`eventually submitting the high bid for the auction at $1,304,000 before the auction closed on
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`June 30.
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`82.
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`Singh ceased all communication on the Hubzu platform following the conclusion
`
`of the auction and failed to follow through with the sale after having submitted numerous bids
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`above the MLS listing price to increase the auction price beyond the amount that the Third Party
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`Bidder was willing to pay.
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`16
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`Case 1:21-cv-00984-FB-RML Document 1 Filed 02/23/21 Page 17 of 111 PageID #: 17
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`83.
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`On July 4, 2020, only four days after the auction ended, defendant Ramgobin
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`executed a PSA on behalf of Chestnut Stump Group and scheduled the closing for July 30,
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`despite the fact that Ramgobin had not ever bid on the 35 Chestnut Property. The price
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`established by the PSA was $950,000 -- $354,000 less than Singh’s high bid and $150,000 less
`
`than the Third Party Bidder’s highest bid.
`
`84.
`
`On July 7, 2020, the Third Party Bidder contacted a RHSS broker and told him he
`
`believed that Chinapen had approached him on June 17 about flipping the 35 Chestnut Property,
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`despite the fact that it was not yet under contract and still listed for sale. The broker relayed the
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`notification to the appropriate compliance team at Altisource for further investigation.
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`85. Meanwhile, the closing for Chestnut Stump Group Corp’s purchase of the 35
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`Chestnut Property was pushed back to August 28, 2020, and then a second time to September 18.
`
`86.
`
`On August 29, 2020, Chinapen called the Third Party Bidder and told him that
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`Chinapen’s “client,” Chestnut Stump Group Corp, would sell the Third Party Bidder the rights to
`
`purchase the 35 Chestnut Property for $1,100,000 – the exact amount of the Third Party Bidder’s
`
`highest bid for the property.
`
`87.
`
`The Third Party Bidder accepted Chinapen’s offer and sent him contact
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`information for the Third Party Bidder’s counsel to draw up the requisite paperwork.
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`88.
`
`On September 9, Chinapen’s counsel sent the Third Party Bidder’s counsel the
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`July 2, 2020 purchase and sale agreement with the price redacted.
`
`89. When the Third Party Bidder’s counsel replied the next day asking for the
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`unredacted purchase and sale agreement, Chinapen’s counsel responded that the transaction was
`
`cancelled and then cut off further communication.
`
`17
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`

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`Case 1:21-cv-00984-FB-RML Document 1 Filed 02/23/21 Page 18 of 111 PageID #: 18
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`90.
`
`Indeed, while Singh’s “winning bid” was $1,304,000, the purchase and sale
`
`agreement provided a purchase price of only $950,000, which explains why Chinapen refused to
`
`send the Third Party Bidder an unredacted copy of the agreement.
`
`91.
`
`On September 17, the RHSS broker contacted by the Third Party Bidder advised
`
`his RHSS colleague, defendant Torres, about the Third Party Bidder’s complaint regarding the
`
`35 Chestnut Property.
`
`92.
`
`Torres tipped off Remedios via WhatsApp the following day and Remedios
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`promptly directed cancellation of the closing with de