NYC In Early Stages Of Real Estate Title Hijacking Epidemic? Local Sheriff Aware Of Nearly 1,000 Cases - Befuddled Gov't Regulator Suspects Number Is But A Fraction Of Actual Tally; City Spokesperson: “No One's Talking About It, But We’re Seeing This Every Day ... I Don’t Think Anyone Realizes How Big This Story Is!”

A recent story in The Nation magazine alludes to what may be the beginning of a real estate title hijacking epidemic in the City Of New York in the following excerpts:

• Much like the housing bubble that sparked the Great Recession, the Brooklyn real-estate market is rife with crime, as developers at all levels snatch at quick profits in once-poor neighborhoods. Deed fraud—in which someone fakes documents to illegally claim ownership of a property—is one of the most acute problems.
  
  New York City Sheriff Joseph Fucito says his office was aware of nearly 1,000 possible cases of deed fraud as of August 2015. State regulatory officials, who are overwhelmed by the sheer volume of transactions in the market, suspect that number is a fraction of the actual tally.
  
  “No one is talking about it, but we’re seeing this every day,” says Sonia Alleyne, press secretary for the New York [City] Department of Finance, which is the agency that processes property deeds for the [city]. “I don’t think anyone realizes how big this story is.”
  
  
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  Eventually, Zi was indicted for five instances of deed fraud, thanks in part to recordings obtained by Falero in which Zi admits to stealing documents from Queen Dobbins—and identifies the Makhanis as his partners. In one conversation, Zi can be heard describing a scheme organized by the Makhanis to “hijack” titles throughout the city. And yet the Makhanis are still in the real-estate business today.
  
  
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  Sonia Alleyne at the [NYC] Department of Finance says that Commissioner Jacques Jiha is looking for remedies for the broader deed-fraud crisis, mostly by tightening the filing rules. “We made recent changes to LLC disclosures, and now we’re also introducing some legislative changes around the notaries.” Meanwhile, Sheriff Fucito says he knows of 15 deed-fraud arrests in the last year. That number is dwarfed by the more than 1,000 leads and 125 criminal investigations and, just beyond those, a literally uncounted number of unexamined deed transfers.
  
  “The problem is this open process that allows people to just walk in and file false instruments,” says Christie Peale, executive director of the Center for New York City Neighborhoods, an organization that studies deed and mortgage fraud. The Department of Finance has strikingly basic standards for accepting deed paperwork: As long as the documents are in “recordable form”—that is, completed—they are processed. “That has to change,” Peale adds, “because right now the Department of Finance doesn’t have a comprehensive approach to picking out problematic documents before they are accepted for processing.”

For the story, see How a Gentrification Scam Threatens New York’s Community Gardens (Shady developers know one easy way to build luxury condos: Claim ownership of communal land).