Case 2:21-cv-01224 Document 1 Filed 03/08/21 Page 1 of 29 PageID #: 1
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`
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`John G. Balestriere
`BALESTRIERE FARIELLO
`225 Broadway, 29th Floor
`New York, New York 10007
`Telephone:
`(212) 374-5401
`Facsimile:
`(212) 208-2613
`john.balestriere@balestrierefariello.com
`Attorneys for Plaintiffs
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF NEW YORK
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`SILVER SANDS MOTEL INC, JEAN
`JURENZIA BURDEN, and RICHARD
`TERRY KEEFE IV,
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`LONG ISLAND CAPITAL
`MANAGEMENT, JERRY M. MIMS, ERIC
`FRIEDLANDER, PETER SCHEMBRI, and
`DOES 1–5,
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`Plaintiffs,
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`-against-
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`Docket No. _________________
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`COMPLAINT
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`JURY TRIAL DEMANDED
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`Defendants.
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`Plaintiffs, by their attorneys, Balestriere Fariello, for their Complaint against
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`Defendants respectfully alleges as follows upon information and belief, except as to
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`allegations concerning Plaintiffs, which are made upon personal knowledge, and except
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`as otherwise indicated herein:
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`
`
`John G. Balestriere
`BALESTRIERE FARIELLO
`225 Broadway, 29th Floor
`New York, New York 10007
`Telephone:
`(212) 374-5401
`Facsimile:
`(212) 208-2613
`john.balestriere@balestrierefariello.com
`Attorneys for Plaintiffs
`
`
`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF NEW YORK
`
`
`SILVER SANDS MOTEL INC, JEAN
`JURENZIA BURDEN, and RICHARD
`TERRY KEEFE IV,
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`
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`
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`LONG ISLAND CAPITAL
`MANAGEMENT, JERRY M. MIMS, ERIC
`FRIEDLANDER, PETER SCHEMBRI, and
`DOES 1–5,
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`Plaintiffs,
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`-against-
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`
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`Docket No. _________________
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`
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`COMPLAINT
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`JURY TRIAL DEMANDED
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`
`
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`
`
`
`
`
`
`Defendants.
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`
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`
`
`
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`Plaintiffs, by their attorneys, Balestriere Fariello, for their Complaint against
`
`Defendants respectfully alleges as follows upon information and belief, except as to
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`allegations concerning Plaintiffs, which are made upon personal knowledge, and except
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`as otherwise indicated herein:
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`Case 2:21-cv-01224 Document 1 Filed 03/08/21 Page 2 of 29 PageID #: 2
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`PRELIMINARY STATEMENT
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`1.
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`Silver Sands Motel Inc. (“Silver Sands”) is a motel on Long Island that was
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`defrauded out of at least $3 million dollars by Defendants who worked together to
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`fraudulently induce Silver Sands’s owner Jean Jurzenia Burden (“Jean Burden”), a legally
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`blind elderly woman, into signing seven mortgages on her business and residential
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`properties and into transferring multiple properties out of her deceased mother’s estate
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`(Estate of Florence Jurzenia (“Estate of Florence”)) for the purposes of converting such
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`mortgage proceeds into profits for Defendants and other non-parties.
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`2.
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`In so doing, Defendants are liable to Plaintiffs under the Racketeer
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`Influenced and Corrupt Organizations Act (“RICO Act”) 18 U.S.C. § § 1962(c) and (d).
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`Under 18 U.S.C. § 1962(c), it is unlawful for any person employed or associated with any
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`enterprise to conduct, directly or indirectly, in the conduct of the enterprise’s affairs
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`through a pattern of racketeering activity. Under 18 U.S.C. § 1962(d), it is unlawful for
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`any person to engage in a RICO conspiracy.
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`3.
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`Jerry Mims (“Mims”), Jean Burden’s attorney, who learned of Jean Burden’s
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`apparent wealth and vulnerabilities, used the information which he gained through his
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`confidential relationship with Jean Burden to set up so-called hard money loans on Jean
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`Burden’s personal and commercial properties.
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`4.
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`Mims would secure these hard money loans through non-party Anthony
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`Galeotafiore (“Galeotafiore”), a broker who connected Mims to hard money lender such
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`as Defendant Eric Friedlander (“Friedlander”), and Friedlander’s company Defendant
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`Long
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`Island Capital Management
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`(“LI Capital”), Defendant Peter Schembri
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`2
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`Case 2:21-cv-01224 Document 1 Filed 03/08/21 Page 3 of 29 PageID #: 3
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`(“P Schembri”), non-party Philip Solomon (“P Solomon”), and non-party Richard Olivo
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`(“Olivo”).
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`5.
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`After securing the connections with the hard money lenders through
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`Galeotafiore, Mims would fraudulently induce Jean Burden either by force, such as where
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`he physically pushed Jean Burden into a room and told her that if she did not sign a
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`mortgage she would lose everything, or by duping Jean Burden into signing mortgages
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`which she did not understand.
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`6.
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`Mims then forced her to sign subsequent mortgages in order to pay off
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`existing mortgages on both her personal and commercial properties, increasing hers and
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`all Plaintiffs’ damages over time.
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`7.
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`Upon receiving Jean Burden’s signature on the fraudulently induced
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`mortgages, Mims, Galeotafiore, and the hard money lenders would take portions or the
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`totality of the profits from the mortgages for their own personal gain and apply little or
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`nothing to the existing mortgages Jean Burden believed she was paying off, keeping
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`Plaintiffs in a state of constant obligation to Defendants.
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`8.
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`Defendant Friedlander, P Schembri, and non-party Galeotafiore were fully
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`aware of all of Mims’s conduct.
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`9.
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`This is just the beginning of the fraud perpetrated by Defendants, as
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`explained in further detail below.
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`10. Defendants knowingly targeted Plaintiffs, as well as other known and
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`unknown victims, with an intent to defraud them through their mortgage fraud
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`enterprise.
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`3
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`Case 2:21-cv-01224 Document 1 Filed 03/08/21 Page 4 of 29 PageID #: 4
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`11. As a result of Defendants and non-parties fraudulently inducing Jean
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`Burden into signing seven mortgages on her personal and commercial properties,
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`Plaintiffs have suffered more than $3 million in damages.
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`12.
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`These damages include the funds stolen by Mims and Friedlander in
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`various mortgages, the interest paid on the fraudulently obtained loans, and the jewelry
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`and other valuable sentimental items which Mims forced Jean Burden to give to him in
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`order to satisfy certain mortgages.
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`JURISDICTION AND VENUE
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`13.
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`This Court has subject matter jurisdiction over this action pursuant to
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`18 U.S.C. § 1964(a), which allows the district courts of the United States jurisdiction over
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`violations of the RICO Act, 18 U.S.C. § 1962.
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`14.
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`This Court has personal jurisdiction over the parties, as the actions which
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`constitute the violations of 18 U.S.C. § 1962(c) and (d) were conducted in relation to the
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`Silver Sands Motel, located at 1400 Silvermere Road, Greenport, New York 11944.
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`PARTIES
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`Plaintiffs
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`15.
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`Plaintiff Silver Sands is and was an authorized New York State Corporation
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`incorporated on March 10, 1961.
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`16.
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`Silver Sands was originally built in 1957 by Jean Burden’s family and
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`continues to operate to this day.
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`17.
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`Silver Sands is owned by the Estate of Edward Jurzenia (Jean Burden’s
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`brother), Jean Burden, and Richard Terry Keefe.
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`4
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`18.
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`Silver Sands Cottages are owned jointly by Jean Burden and the Estate of
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`Edward Jurzenia and are leased to Silver Sands.
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`19.
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`Plaintiff Jean Burden is and was a resident of Suffolk County, New York,
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`and is a 48.5% shareholder in Silver Sands.
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`20.
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`Plaintiff Richard Terry Keefe IV (“Keefe”) is a resident of Suffolk County,
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`New York, and is a 3% shareholder in Silver Sands.
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`Defendants
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`21. Defendant LI Capital is and, at all times hereinafter mentioned, was a
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`corporation duly incorporated in New York State.
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`22. Defendant Friedlander is and was a resident of New York State and is and
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`was the sole shareholder and President of LI Capital.
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`23.
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`Friedlander is a person under 18 U.S.C. § 1961(3).
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`24. Unless otherwise specified, every time that Friedlander is alleged to have
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`committed an action it is both in his individual capacity and on behalf of LI Capital.
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`25. Defendant Mims was a resident of New York State.
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`26. Mims is a person under 18 U.S.C. § 1961(3).
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`27.
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`P Schembri was a resident of New York State. P Schembri was a hard
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`money lender.
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`28. DOES 1–5 are other parties which Plaintiffs believe are unknown enterprise
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`co-conspirators who will be discovered in litigation.
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`5
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`Non-Parties
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`29. AJG Capital Group Associates, Inc. (“AJG”) was at all times hereinafter
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`mentioned, a corporation duly incorporated in New York.
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`30. Galeotafiore was a resident of New York State, and is and was the sole
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`shareholder of AJG. Unless otherwise specified, every time that Galeotafiore is alleged to
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`have committed an action it is both in his individual capacity, and on behalf of AJG.
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`31.
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`Plaintiffs are not naming Galeotafiore and AJG as defendants in this action
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`as the parties have reached a settlement, though they fully participated in the enterprise
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`as pleaded in this complaint.
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`32. Gross Family Holdings, LLC (“Gross Family”) is and, at all times
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`hereinafter mentioned, a corporation duly incorporated in the State of New York.
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`33.
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`Sal LoPiccolo (“LoPiccolo”) was a resident of New York State.
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`34.
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`Plaintiffs are not naming LoPiccolo in this action as the parties have reached
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`a settlement.
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`35.
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`Richard Olivo (“Olivo”) was a resident of New York State. Olivo was a hard
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`money lender.
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`36. Gail Schembri (“G Schembri”) was a resident of New York State.
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`G Schembri is P Schembri’s wife.
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`37.
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`Bonitch a/k/a Susan Sivillo (“Bonitch”) was a resident of New York State.
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`Bonitch was a mortgage broker.
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`38.
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`P Solomon was a resident of New York State. P Solomon was a hard money
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`lender.
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`6
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`39.
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`Rosemary Solomon (“R Solomon”) was a resident of New York State. R
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`Solomon is P Solomon’s wife.
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`40.
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`Plaintiffs are not naming P Solomon and R Solomon as defendants in this
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`action as the parties have reached a settlement.
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`41.
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`The Wheatley Harbor LLC (“Wheatley”) is and, at all times hereinafter
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`mentioned, a corporation duly incorporated in the State of New York.
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`STATEMENT OF FACTS
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`The Creation of the Enterprise
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`42.
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`In November 2007, Mims and Jean Burden met through Bonitch, a
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`mortgage broker who recommended that Mims handle the closing of Jean Burden’s
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`$300,000 loan with Precision Financial Services Inc. (the “Sivillo Mortgage”).
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`43.
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`The Sivillo Mortgage was on Jean Burden’s property at 1090 Cove Circle,
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`Greenport, New York (the “1090 Property”) and was taken to pay off a “slip and fall
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`judgment” on the Silver Sands Motel property by Cathy Alexander, a Silver Sands patron
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`who said she fell on the property.
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`44. While it is not clear if Mims engaged in any fraud in the Sivillo Mortgage,
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`it served as a launching pad for the creation of an enterprise aimed at defrauding
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`Plaintiffs out of multiple properties and over $3 million.
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`45.
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`In 2008, Mims approached Jean Burden about “investing” in a real estate
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`deal. Jean Burden told Mims that she was not interested but instead wanted to borrow a
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`negative pledge, as she regularly did to support Silver Sands during the winter. (A
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`7
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`negative pledge is a provision in a contract which prohibits a party to the contract from
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`creating any security interests over certain property specified in the provision.)
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`46. At that time, as Florence’s Estate had not yet been settled, Jean Burden
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`could not seek such a loan from a traditional bank.
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`47.
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`In response to Jean Burden’s request for a negative pledge, Mims told Jean
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`Burden that he could help her secure a loan with LI Capital. Mims told Jean Burden that
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`the negative pledge was for $300,000. In fact, it was a mortgage for $750,000 (the “2008 LI
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`Capital Mortgage”).
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`48.
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`The 2008 LI Capital Mortgage was on Jean Burden’s properties at 1100
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`Silvermere Road, Greenport, New York (the “1100 Property”) and 1135 Shore Road,
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`Greenport, New York (the “1135 Property”) and was secured with Mims acting as the
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`attorney, Galeotafiore as the mortgage broker, and Friedlander as the lender through
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`Friedlander’s LI Capital.
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`49.
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`Jean Burden suffers from ocular histoplasmosis. The condition severely
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`impairs her vision. As such, she is unable to read documents and therefore relies on
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`others, and had specifically relied on Mims, her attorney for several years, to read legal
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`documents for her. However, Mims either never read the documents to Jean Burden or
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`only summarized them and lied about their contents.
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`50. As a result, Jean Burden would sign anything Mims presented to her.
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`(Mims has since been suspended from the New York Bar for failing to maintain the
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`required bookkeeping records for his IOLA Account.)
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`8
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`51.
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`The 2008 LI Capital Mortgage was the first time—but not the last time—
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`that Mims, Friedlander, non-party Galeotafiore, and later P Schembri fraudulently
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`induced Jean Burden into signing a loan on her property.
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`Relationship of Members of the Racketeering Enterprise
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`52. Over the next three years, Mims, Friedlander, and non-party Galeotafiore
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`sought other hard money lenders, such as Defendant P Schembri, and non-parties P
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`Solomon, Olivo, Gross Family, and Wheatley, in order to continue to target Jean Burden
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`for their own economic gain.
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`53.
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`They fraudulently induced her into signing six more mortgages (seven
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`including the 2008 LI Capital Mortgage) by June 1, 2011, as discussed in further detail
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`below.
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`54. All involved hard money lenders benefited at Plaintiffs’ expense, but, at this
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`time, Plaintiffs are unaware of the extent to which the lenders outside of Galeotafiore,
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`AJG, Friedlander, LI Capital, and P Schembri knew that their profits came from an illegal
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`enterprise.
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`55.
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`This pattern of racketeering activity continued
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`throughout each
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`fraudulently obtained mortgage, of which there would be seven over four years.
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`56. Mims followed a similar pattern with each mortgage: he would
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`fraudulently induce Jean Burden into signing a mortgage on one of her commercial or
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`personal properties, dupe her into signing subsequent mortgages to satisfy previously
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`fraudulently induced mortgages, and at times put Jean Burden under physical duress.
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`9
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`57.
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`Specifically, on each occasion Jean Burden signed a new mortgage, Mims
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`would lie to Jean Burden and tell her that her previous mortgages were being foreclosed
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`and that, in order to save her property, she would need to sign an additional mortgage
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`on a second property. These assertions were false: the properties were not about to be
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`subject to foreclosure.
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`58. During one instance, in December 2009, Mims pushed a crying and legally
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`blind Jean Burden into a room and told her that she would lose everything if she did not
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`sign the mortgage he had prepared.
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`59. Mims continued, by either physically forcing Jean Burden to sign loans or
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`duping Jean Burden into believing that she needed to sign subsequent mortgages to pay
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`off previous ones until every property owned in part or in full by Jean Burden was
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`encumbered by a mortgage.
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`60. Many of the Silver Sands properties were still owned by the Estate of
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`Florence with Jean Burden and Edward Jurzenia as the executors of the Estate. As such,
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`Jean Burden was unable to transfer the properties out of the Estate and sign mortgages
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`on them without Edward Jurzenia.
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`61.
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`To overcome that hurdle, lawyer Mims drafted fraudulent deeds to transfer
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`properties out of the Estate of Florence and into the names of Edward Jurzenia and Jean
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`Burden individually. Mims did so at least nine times in or around June 2009 to June 2011.
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`62. As shown by handwriting experts, Edward Jurenzia’s signature was forged
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`on at least three deeds on June 15, 2009, and December 3, 2010.
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`63. After each time that Jean Burden executed a mortgage prepared by Mims,
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`Mims then worked with Galeotafiore, as his broker, to find hard money lenders for the
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`mortgages.
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`64. Galeotafiore received between $20,000 to $50,000, often through checks sent
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`by Mims, for each mortgage in which he was involved.
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`65.
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`Friedlander through LI Capital as well as indirectly through Galeotafiore
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`received proceeds of at times over $150,000 for the mortgages which Jean Burden was
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`fraudulently induced into signing.
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`66.
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`P Schembri only received profits through a mortgage which Jean Burden
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`was fraudulently induced into signing in 2011, discussed in further detail below,
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`however, knew and knowingly participated and executed Mims, Friedlander, and
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`Galeotafiore’s fraudulent acts
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`67. Galeotafiore, Friedlander, and P Schembri were aware, knowingly
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`participated, and profited off of Mims’s targeting of Jean Burden.
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`68. Mims, Friedlander, P Schembri, and non-party Galeotafiore continued to
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`target Jean Burden from May 2008 until at least December 2011 when Mims filed for
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`bankruptcy for Silver Sands on behalf of Jean Burden, without her knowledge.
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`69. Upon learning that Silver Sands’s properties were listed in a foreclosure
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`auction and that Silver Sands had filed for bankruptcy, Keefe returned to help his mother
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`and has since worked to defend his mother, their properties, and Silver Sands against the
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`damage caused by Defendants and the non-parties.
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`11
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`70. Mims, Friedlander, LI Capital, and P Schembri acted in association-in-fact
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`and each were fully aware that all of their acts were illegal.
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`71.
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`Below is a detailed account of every mortgage which Jean Burden was
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`fraudulently induced into signing. Unless stated otherwise, enterprise participants Mims
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`and Galeotafiore engaged in the fraudulent steps noted above with regard to each of the
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`below mortgages.
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`72.
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`If Friedlander and his LI Capital were involved in a LI Capital mortgage
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`they were aware of Mims’s and Galeotafiore’s misconduct.
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`73. Where P Schembri was involved in a mortgage, he was aware of Mims,
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`Galeotafiore, and Friedlander’s misconduct.
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`Relevant Mortgages
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`Long Island Capital – May 9, 2008
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`74. On or about May 9, 2008, Mims arranged a mortgage and security
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`agreement for Jean Burden and Edward Jurzenia, as mortgagors, and LI Capital, as
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`mortgagee.
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`75.
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`The 2008 LI Capital Mortgage was allegedly executed by Jean Burden and
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`Edward Jurzenia individually.
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`76.
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`Jean Burden does not recall executing the 2008 LI Capital Mortgage.
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`77.
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`The mortgaged properties were the 1100 Property and the 1135 Property.
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`78.
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`Jean Burden believed the mortgage was for $300,000 and that she was
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`taking a negative pledge.
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`79.
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`The mortgage was actually in the amount of $750,000.
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`12
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`80. AJG was the mortgage broker, despite not being Jean Burden’s broker and
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`instead brokering the loan without a license on behalf of Friedlander.
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`81.
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`Pursuant to the closing statement produced by Friedlander in December
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`2012, the following distributions were made from the proceeds of the 2008 LI Capital
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`Mortgage:
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`a. Escrow Check to LI Capital $157,500
`b. Escrow Check to AJG Capital Group for Points $22,500
`c. Escrow Check to Certilman Balin Adler & Hyman, LLP $9,000
`d. Escrow Check to Elizabeth Reis $400
`e. Escrow Check Excel Abstract, Inc. $47,837.44
`f. Escrow Check to Wire Transfer to IOLA Account of Mims: $512,762.56
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`Solomon Mortgage – November 13, 2008
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`82. On or about November 13, 2008, Mims arranged a mortgage between
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`P Solomon, as mortgagee, and Silver Sands, as mortgagor (the “2008 Solomon
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`Mortgage”).
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`83.
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`The mortgage was only executed by Jean Burden in her individual capacity.
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`84.
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`Jean Burden believed she was taking a small negative pledge for $30,000
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`and does not recall executing the 2008 Solomon Mortgage.
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`85.
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`The mortgaged property was 1400 Silvermere Road, Greenport, New York
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`(the “1400 Property”).
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`86.
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`In order for Silver Sands to transfer or mortgage any interest or asset of
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`Silver Sands, including the 1400 Property, a corporate resolution authorizing such
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`transfer by a majority of shareholders is required.
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`13
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`87.
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`There was no corporate resolution for Silver Sands approving the
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`mortgaging of the 1400 Property.
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`88.
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`Jean Burden, Edward Jurzenia, and Keefe were the only members of Silver
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`Sands at this time.
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`89.
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`The mortgaged amount was $200,000.
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`90. Mims received a check for the entirety of the $200,000 proceeds
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`91.
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`Plaintiffs have separately settled with P Solomon and R Solomon
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`(collectively, the “Solomons”) and are therefore not pursuing claims against the
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`Solomons here.
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`Long Island Capital – June 24, 2009
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`92. On or about June 24, 2009, Mims arranged a security agreement and
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`mortgage between Edward Jurzenia, Jean Burden, and Silver Sands, as mortgagors, and
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`LI Capital, as mortgagee (the “2009 LI Capital Mortgage”).
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`93.
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`The 2009 LI Capital Mortgage was executed by Jean Burden, in her alleged
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`capacity as Secretary-Treasurer of Silver Sands, Jean Burden, as an individual, and Jean
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`Burden as attorney-in-fact for Edward Jurzenia.
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`94.
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`The execution of the 2009 LI Capital Mortgage by Edward Jurzenia is
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`devoid of any information identifying any authorization of power-of-attorney to Jean
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`Burden as agent.
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`95.
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`The 2009 LI Capital Mortgage was signed by Friedlander, as an individual,
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`who was identified as the President of LI Capital.
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`96. A search of the recorded documents found an alleged power-of-attorney
`
`for Edward Jurzenia was signed on these properties, allegedly executed on June 23, 2009,
`
`one day prior to the entering of the mortgage.
`
`97. As proven by handwriting experts, Edward Jurzenia’s signature on the
`
`power-of-attorney is forged.
`
`98.
`
`Similar to the 2008 Solomon Mortgage, there is no corporate resolution to
`
`approve the mortgaging of the 1400 Property from Silver Sands.
`
`99.
`
`There was an attempt to forge Edward Jurzenia’s signature on the corporate
`
`resolution.
`
`100. The properties mortgaged were: 73550 Route 25, Greenport New York
`
`(the “73550 Property”); 1155 Silvermere Road, Greenport, New York (the “1155
`
`Property”); the 1400 Property; the 1100 Property; and the 1135 Property.
`
`101. The mortgaged amount was $900,000.
`
`102. AJG was the broker involved in the 2009 LI Capital Mortgage.
`
`103. Pursuant to the closing and disbursement statement, the following
`
`disbursements were made from the $900,000 proceeds:
`
`a. LI Capital’s Prepaid Interest and Origination Points
` $361,833.33
`
`b. Escrow Check to AJG Capital Group
` $49,500
`
`
`
`c. Escrow Check to Certilman, Balin, Adler, Hyman, LLP $15,100
`d. Escrow Check to Philip Solomon
`
`
`
` $203,188.98
`e. Escrow Check to Somer Estrin
`
`
`
`
`
` $250
`f. Escrow Check to Sheriff of Suffolk County
`
`
` $19,307.84
`g. Escrow Check to Patricia Chessman
`
`
`
`
` $350
`h. Escrow Check to Brightwaters Abstract, Inc.
`
`
` $30,371.85
`i. Payment to Jean J. Burden
`
`
`
`
` $85,371.85
`j. Escrow Check to Mims
`
`
`
`
`
` $135,000
`
`
`
`
`15
`
`
`
`Case 2:21-cv-01224 Document 1 Filed 03/08/21 Page 16 of 29 PageID #: 16
`
`
`
`
`
`104. AJG received $49,500 from the proceeds of the mortgage.
`
`105. The 2009 LI Capital Mortgage was foreclosed in August 2010. Mims filed a
`
`five-line answer to the Summons and Complaint, in which Jean Burden’s signature was
`
`forged and notizarized by Mims, and then failed to defend the motion for summary
`
`judgment, resulting in a default judgment being rendered on December 13, 2010.
`
`Solomon Mortgage – December 15, 2009
`
`106. On or about December 15, 2009, Mims arranged a mortgage with the
`
`Solomons, as mortgagees, and Walter Burden (Jean Burden’s husband) and Jean Burden,
`
`as mortgagors (the “2009 Solomon Mortgage”).
`
`107. The mortgage was executed by Jean Burden, individually and Jean Burden
`
`as attorney-in-fact for Walter Burden.
`
`108. Walter Burden’s signature was forged on the power-of-attorney documents
`
`(the “2010 Forged Walter POA”).
`
`109. The properties mortgaged were: 1000 Cove Circle, Greenport, New York
`
`(the “1000 Property”) and 1090 Cove Circle, Greenport, New York (the “1090 Property”).
`
`110. Pursuant to the mortgage documents, the 1000 Property was added to the
`
`security agreement at the execution of the mortgage.
`
`111.
`
`Jean Burden was told by Mims and Somer Estrin (P Solomon’s Attorney)
`
`(“Estrin”) that the 1000 Property would be removed from the mortgage immediately.
`
`112. The 1000 Property was never removed from the 2009 Solomon Mortgage.
`
`113. The mortgaged amount was $550,000.
`
`
`
`16
`
`
`
`Case 2:21-cv-01224 Document 1 Filed 03/08/21 Page 17 of 29 PageID #: 17
`
`
`
`
`
`114. The following checks were made from the proceeds of the 2009 Solomon
`
`Mortgage.
`
`a. Payment to Mims
`
`b. Payment to Estrin
`
`115. Plaintiffs have separately settled with P Solomon and R Solomon and are
`
` $76,000
`
`
` $4,750
`
`therefore not pursuing claims against the Solomons in this action.
`
`The Gross Family Holdings, LLC and The Wheatley Harbor, LLC – December 13, 2010
`
`116. On or about December 13, 2010, Mims arranged a mortgage between the
`
`Gross Family Holdings LLC and the Wheatley Harbor, LLC, as mortgagees (the
`
`“Gross/Wheatley Mortgage”), and Jean Burden and Edward Jurzenia, as mortgagors.
`
`117. The mortgage was executed by Jean Burden, individually, and Jean Burden
`
`as attorney-in-fact for Edward Jurzenia, despite the fact that there was no power-of-
`
`attorney for Edward Jurzenia
`
`118.
`
`Jean Burden does not recall executing the Gross/Wheatley Mortgage.
`
`119. The properties mortgaged were 1220 Silvermere Road, Greenport, New
`
`York (the “1220 Property”) and 73700 Route 25, Greenport, New York (the “73700
`
`Property”).
`
`120. Galeotafiore received an undisclosed portion of the proceeds as broker.
`
`121. The Gross/Wheatley Mortgage was satisfied approximately three months
`
`later with the Schembri Mortgage (below).
`
`122. The mortgage amount was $250,000.
`
`
`
`17
`
`
`
`Case 2:21-cv-01224 Document 1 Filed 03/08/21 Page 18 of 29 PageID #: 18
`
`
`
`
`
`123. The following wire transfers and checks were written from the proceeds of
`
`the Gross/Wheatley Mortgage:
`
`
`
`a. Payment to Mims
`b. Payment to Jean Burden
`
` $126,226.17
`
`
` $100,000
`
`Peter Schembri Mortgage – April 18, 2011
`
`124. On or about April 18, 2011, Mims arranged a mortgage between P Schembri
`
`and G Schembri, as mortgagees, and Edward Jurzenia, Jean Burden, and Walter Burden,
`
`as mortgagors (the “Schembri Mortgage”).
`
`125. P Schembri was an acquaintance of Galeotafiore, who had shown an
`
`interest in developing Silver Sands for many years.
`
`126. P Schembri, Friedlander, and Galeotafiore planned for P Schembri to take
`
`over Friedlander’s loan as two of the parcels obtained in the Schembri mortgage
`
`connected the previously encumbered parcels, thus giving Schembri control over a
`
`connected and majority share of Silver Sands properties.
`
`127.
`
`Jean Burden was particularly resistant to signing any mortgages with P
`
`Schembri as she knew of his ultimate goal to develop the Silver Sands land.
`
`128. Nonetheless, Mims fraudulently induced Jean Burden, by falsely telling her
`
`that the Gross/Wheatley Mortgage was in default, into signing the Schembri Mortgage.
`
`129. The mortgage was executed by Edward Jurzenia and Walter Burden with
`
`Jean Burden as attorney-in-fact for both parties, and by Jean Burden individually.
`
`130. Walter Burden’s signature on the power-of-attorney documents was forged
`
`(the “2011 Forged Walter POA”).
`
`
`
`18
`
`
`
`Case 2:21-cv-01224 Document 1 Filed 03/08/21 Page 19 of 29 PageID #: 19
`
`
`
`
`
`131. There was no existing power-of-attorney for Edward Jurzenia.
`
`132. The properties mortgaged were the 1220 Property, the 73700 Property, 860
`
`Cove Circle, Greenport, New York (the “860 Property”), and 750 Cove Circle, Greenport,
`
`New York (the “750 Property”).
`
`133. The mortgaged amount was $400,000.
`
`134. Galeotafiore, AJG, PM Advisory, a company owned by LoPiccolo, and
`
`LoPiccolo acted as brokers.
`
`135. The following checks were written from the proceeds of the Schembri
`
`Mortgage:
`
`a. Mims
`
`
`
`
`
`b. PM Advisory Group
`
`
`
`c. Anthony Galeotafiore/AJG Capital
`
`d. To Pay off the Wheatley/Gross Mortgage
`e. Northstar Title Agency
`
`
`
`f. RMC Consulting
`
`
`
`
`
`Richard Olivo – June 1, 2011
`
`
`
`
`
`
`
`
` $48,550
`
` $14,000
`
` $20,000
`
` $250,000
`
` $22,652.77
`
`
` $8,000
`
`136. On or about June 1, 2011, Mims arranged a mortgage between Richard
`
`Olivo, as mortgagee, and Walter Burden and Jean Burden as mortgagors (the “Olivo
`
`Mortgage”).
`
`137. Mims fraudulently induced Jean Burden into signing the Olivo Mortgage
`
`by telling her that it was necessary to satisfy the 2009 LI Capital Mortgage and was
`
`promised by Friedlander, LoPiccolo, and Galeotafiore that the Olivo Mortgage would
`
`pay the 2009 LI Capital in full.
`
`
`
`19
`
`
`
`Case 2:21-cv-01224 Document 1 Filed 03/08/21 Page 20 of 29 PageID #: 20
`
`
`
`
`
`138. The mortgage was executed by Jean Burden individually and Walter
`
`Burden with Jean Burden acting as attorney-in-fact for Walter Burden.
`
`139. The 2011 Forged Walter POA was used again.
`
`140. The mortgaged property was 308 Flint Street, Greenport, New York 11944
`
`(the “308 Property”).
`
`141. The mortgaged amount was $550,000.
`
`142. Mims received $492,554.89 from the proceeds.
`
`143. Mims wired $395,291.72 to LI Capital for a three-month forbearance of a
`
`foreclosure of the 2009 LI Capital Mortgage.
`
`144. LoPiccolo and Galeotafiore acted as mortgage brokers and were paid from
`
`the existing mortgage.
`
`145. Friedlander faxed Jean Burden a letter on May 25, 2011, stating that the LI
`
`Capital Mortgage was paid in full and that the auction had been canceled.
`
`146. The $550,000 paid by Jean Burden only satisfied about a year’s worth of
`
`interest on the LI Capital Mortgage, resulting in Friedlander placing the LI Capital
`
`Mortgage Property up for auction three months later.
`
`Keefe First Learns of the Fraud
`
`147. Keefe, Jean Burden’s son, eventually learned, while researching Silver
`
`Sands Motel, that Silver Sands had filed for bankruptcy.
`
`148. After finding out that his family company had filed for bankruptcy, Keefe
`
`returned home to help his mother.
`
`
`
`20
`
`
`
`Case 2:21-cv-01224 Document 1 Filed 03/08/21 Page 21 of 29 PageID #: 21
`
`
`
`
`
`149. Eventually, Keefe, on behalf of his mother and Silver Sands, started
`
`litigations against Mims and began defending foreclosures of the mortgages which Jean
`
`Burden was fraudulently induced into signing against the Solomons and LI Capital.
`
`150. While fending off individual foreclosures, Keefe did not learn at first of the
`
`extent of the racketeering enterprise, including the relationship between Galeotafiore and
`
`Friedlander.
`
`151. This changed when Galeotafiore was deposed on March 9, 2017, and March
`
`23, 2017 (the “March 2017 Depositions”).
`
`152. At that time, Keefe and Jean Burden discovered that Galeotafiore was acting
`
`as an unlicensed broker on behalf of Friedlander and LI Capital.
`
`153. Keefe and Jean Burden also confirmed through the March 2017 Depositions
`
`the link between Galeotafiore, Friedlander, and Mims.
`
`154. Before the March 2017 Depositions, Keefe was unaware of the extent the
`
`enterprise conspired to defraud Plaintiffs of their family company and properties.
`
`Other Fraudulent Acts Perpetrated by Defendants and Non-Parties
`
`155. Since discovering the fraud perpetrated by Defendants, Plaintiffs have
`
`investigated further business engagements entered into by Friedlander and Galeotafiore
`
`and have uncovered that Friedlander and Galeotafiore have continued a string of
`
`fraudulent acts beyond the State of New York.
`
`156. As an example, between 2008 and 2012, Friedlander forced the foreclosure
`
`of Sunset Lake Villas Condos in Florida.
`
`
`
`21
`
`
`
`Case 2:21-cv-01224 Document 1 Filed 03/08/21 Page 22 of 29 PageID #: 22
`
`
`
`
`
`157. Galeotafiore owned numerous properties in Sunset Lake Villas Condos
`
`which he purchased in part with a $4 million loan from Compass Bank.
`
`158. When Compass Bank threatened foreclosure, as Galeotafiore was unable to
`
`pay back the loan, Friedlander paid the loan.
`
`159. Friedlander then foreclosed on the condo complex, a transaction which
`
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