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The complaint, unsealed on Monday, Jan. 4, alleges that Nassau County resident Michael Konstantinovskiy, of Roslyn Heights, and Queens residents Iskyo Aronov, of Middle Village, Ron Borovinsky, of Hollis Hills, and the companies they owned or controlled, engaged in fraudulent short sales of residential properties insured by the Federal Housing Administration (FHA), said Acting United States Attorney for the Eastern District, Seth DuCharme.
As alleged in the complaint, from at least 2013 through 2016, the defendants defrauded the government by manipulating the short sale process to acquire residential properties from numerous distressed homeowners for below-fair market value prices in non-arm’s-length transactions.
The individual defendants used various corporate entities in the fraudulent scheme and as a result, they not only acquired the properties for below-fair market value prices but obtained broker fees in the transactions and induced lenders to release the FHA-insured mortgages at a loss.
In turn, HUD paid the lenders’ claims for FHA insurance from federal funds. These payments by HUD were artificially inflated as a result of the defendants’ fraudulent conduct.
“As alleged, these defendants fraudulently obtained homes at depressed prices at the expense of a taxpayer-funded program designed to assist borrowers seeking the American Dream of homeownership,” stated DuCharme.
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