Investigating Fraud and Racketeering Claims Against David DeRosa and IPA Asset Management LLC

 

I am litigating a civil RICO claim against David DeRosa, IPA Asset Management, LLC, and their affiliates, and would appreciate information from anyone who has been defrauded by them or is knowledgeable about their foreclosure rescue business.  

My client is a private lender that was foreclosing on a property but was caused to incur significant losses when, after we obtained a Judgment of Foreclosure and Sale, the borrower signed a deed transferring title of the property to a newly-formed LLC set up by DeRosa and his team.  At the time, the property was worth more than what was owed, but after extensive delay the borrower owed much more than the property was worth and we were awarded a judgment for over $1.6 million.   

Per the “Property Improvement and Sale Agreement” between the borrower and the newly formed LLC, the borrowers were promised that they would “no longer be responsible for any costs” associated with the property, that DeRosa's team would fix and flip it, and that they would have a chance to share in the profits after it was repaired and sold.  Attorneys who regularly represent DeRosa and his entities, including Christopher Thompson, substituted as counsel for the borrower in the foreclosure action and filed a series of unsuccessful applications to vacate the judgment of foreclosure while claiming that their client was taking steps to repair the property. 

After extensive delay, the building was ordered demolished as an unsafe structure.  One of DeRosa’s investors, Mangotree Real Estate Holdings, L.P., operated by Rakesh Bhargava of BW Asset Management, later filed suit claiming they had given DeRosa over $400,000 to repair the property but he misappropriated or diverted the funds.  

What occurred appears to be part of a broader pattern of frauds against distressed property owners, lenders, and investors, as more fully explained in our brief to the Appellate Division in opposition to DeRosa's appeal arguing that the suit to hold him and his affiliates responsible for the loss should be thrown out, which can be read here: Respondent’s Brief in Fraud and Civil RICO Lawsuit against David DeRosa and IPA Asset Management LLC

DeRosa has put IPA Asset Management into bankruptcy, and there is now a court-appointed trustee investigating what assets may be available to pay its creditors.  In Re IPA Asset Management, EDNY Case No. 25-bk-72526

Anyone with helpful information is welcome to contact me at: S.Kreppein@DevittSpellmanLaw.com 

Compelled Access to Neighbor's Property for Construction - RPAPL 881

 I saw a blurb in the law journal today about this decision, In Re 1643 First LLC v. 1645 1st Ave LLC, 2024 NY Slip Op 01111 (1st Dept. 2024), and it deals with an interesting issue that I've addressed a few times on both sides and would like to handle more of.  

A neighbor can be required to give temporary access to their property to enable construction, such as a fence contractor needing to cross the property line to do the work even if the fence itself is going to be on one side of the line.  With fences, hopefully people act neighborly, but it become a major issue in New York City where buildings can be right up to the line and sometimes even share a common wall, and construction projects can involve prolonged periods of scaffolding and similar inconvenience to the neighbors.  Ideally, those issues are worked out voluntarily between the neighbors with a licensing agreement, but sometimes people can't agree or just won't cooperate.  If that happens, RPAPL 881 lets the Court impose a reasonable licensing agreement, which includes a fee for the use of the property, measures to make sure the adjacent owner is fully protected (both in terms of safety issues and in terms of making sure they are fully insured and indemnified), and the neighbor is generally entitled to any reasonable costs and fees they incur.  

In 1643 First v 1645 1st, the lower court judge didn't allow for expansive indemnification language and denied the neighbor's request for fees.  On Appeal, a panel from the First Department (which covers Manhattan and the Bronx, and is great -- they tend to know what they're doing, particularly with these types of issues, and work faster than the other Departments) reversed, finding that the neighboring owner needed to be fully protected, and that the lower court judge cannot deny fees without explaining why they were denied and can only do so if the fees were "unreasonably incurred" or the denial was necessary to "redress the prejudice caused to petitioner by respondent's litigation errors and any other misconduct."  

Kennedy v. Bremerton - Non-Coercive Post-Game Prayers by Coach Protected by First Amendment

 I have a lot of thoughts on the Supreme Court's decisions over the last week, but unfortunately not enough time for something comprehensive at the moment.  Here's my quick take on the most recent one:

* Kennedy v. Bremerton: 

Gorsuch Majority Opinion: Coach's post-game prayers are protected by the 1st amendment, provided students aren't coerced to join.  Religious expression is protected by the constitution, not treated as "second class speech."  The Free Speech and Establishment clauses should be complimentary, not in conflict, and must be read based upon the "understanding of the Founding Fathers."  

Thomas/Alito Concurrences:  Notice we didn't talk about the appropriate standard of scrutiny. That was on purpose.  The standards might be different under different circumstances, who knows anymore.  

Sotomayor/Breyer/Kagan Dissent:  The majority just changed decades of precedent again, based upon a factual narrative of someone saying a quiet private prayer, but here's photos of a public school coach in an area with diverse religious backgrounds leading a large group of students in a Judeo-Christian prayer. 

My analysis: I tend to agree with a lot of the majority opinion, even if it's a change in the law, although they seem to oversimplify the facts and issues.  Within appropriate parameters when it comes to pubic institutions, religious expression is supposed to be protected by the constitution.  But, it's a tough issue, and the Court has made it more difficult by continuing to move away from using standards of scrutiny (which has been going on for years, and isn't a left/right issue, and is a huge change).  They're re-writing the last century of constitutional law.  One concerning issue is that the majority compares the 50-yard line prayers to a Muslim teacher being allowed to wear a headscarf, but I don't see those as in any way comparable unless the teacher was also passing out headscarfs to students.  It's not clear the outcome would have been the same if it was a coach leading groups of students in kneeling towards mecca while praying Islamic prayers.    The Establishment and Equal Protection Clauses requires, and this Court may well strongly agree that they requires, that all types of religious expression receive the same protection.  Parts of the majority opinion read more like a brief (why is the coach being a veteran relevant, let alone so prominently noted?).  It's a very different approach than the Court has taken in a long time, and the is part of a major shift in the whole field of constitutional law. 

U.S. Supreme Court

So on Monday, March 21st, the US Supreme Court approved my admission, and denied a petition for certiorari that I’d drafted the brief in opposition for.  The arguments went deep into due process, equal protection, and takings jurisprudence, so I had an opportunity to draft what I thought was a very solid summary of the Court’s key precedents in those areas, and why there’s no need to revisit the issues in response to this case. While we’d gotten the case dismissed, I had argued before the lower courts that shouldn’t exercise jurisdiction, and in seeking cert the Plaintiff argued that Knick v Scott had expanded federal jurisdiction over state land use matters, so also had the chance to preliminarily brief some nuanced jurisdictional issues as well.  

I do a lot of constitutional and civil rights litigation, including a fair amount before the Second Circuit, so practicing before SCOTUS in the future isn’t unrealistic, and it is something I really hope to have the opportunity to do.  If I’m that lucky, it would presumably evolve out of my existing federal appellate work, but now that I’m officially admitted if anyone needs an attorney for petitioning for or defending against cert, or drafting an amicus brief, please keep me in mind.