Six Charged With Bogus Apartment-Listing Fraud
By Steven Wishnia

State Attorney General Eliot Spitzer and Secretary of State Randy Daniels announced Aug. 8 that six people have been charged in a citywide sweep of fake apartment -listing businesses. It’s estimated that the businesses scammed consumers out of hundreds of thousands of dollars.

Five people were charged with fraud and larceny for operating a total of 12 businesses that falsely claimed to have listings of low-rent apartments. A sixth person was named in a civil lawsuit for failing to provide adequate apartment listings.

The five arrested were Leroy Noel Cox, 36; Mekete Dawitt Melaku, 24; Moyston Allison, 23, of Brooklyn, and Michael Adderly, 25, and Morsell Allison, 24, of Manhattan. Spitzer’s office has alleged that they would sign up consumers for a fee of $150-$180 each. The group advertised in area newspapers, claiming it had listings for one-bedroom apartments from $450 per month and larger apartments from $600 per month. For example, one consumer was told that a two-bedroom apartment was available in Park Slope, Brooklyn for $900 per month, and another was told that a two-bedroom apartment in Kew Gardens, Queens was available for $915.

In fact, none of the apartments advertised ever existed. When consumers would call the phone number they were given for an apartment’s "landlord," they were actually calling a phone answering machine set up by the group. A "call backer" employed by the group would return the call posing as a representative of the landlord and ask for income, employment history and other information. The consumer would then hear nothing further from the "landlord."

During busy weeks, the group would sign up as many as 800 customers, taking in $140,000. As a way to dodge consumer complaints, the group operated under at least 12 different names--including "The Apartment Finders," "New York No Fee Apartments," "Compatible Roommates," and "Broker Bypass"--at several different addresses, mainly in lower Midtown.

Spitzer noted that in 1999, Cox had agreed never again to act as an apartment information vendor in settlement of a civil case brought by his office.

In the separate, but similar civil case, Spitzer announced a lawsuit against Richard Wilson and nine of his companies, charging fraud and deceptive practices for an unlicensed apartment finder business that he runs. Wilson, of 105th Avenue in Queens, charged consumers between $155-$195 for a membership in his apartment-listing service. He targeted consumers in Queens, the Bronx and Long Island through newspaper ads. But once consumers paid for the membership, they either never received listings, received listings for apartments that were no longer available, or listings for apartments that did not meet their requirements.

The lawsuit seeks approximately $20,000 in restitution for victims, as well as civil penalties and costs to the state. Spitzer also obtained a temporary restraining order preventing Wilson from operating any unlicensed apartment-information vending business.