Hamptons real estate scam allegations mounted for years before state action

Rosa Quituisaca said she got a call last year from a friend warning that the two of them might have made a mistake buying homes from the same Hamptons property investor.

The friend said the investor was asking for more money than he had initially agreed to pay.

Quituisaca soon found problems of her own.

She discovered that the deed for her $475,000 East Hampton home had never been filed, leaving Suffolk County without any record of her ownership. When the deed was later recorded, the purchase price was missing. Quituisaca alleges a title search showed an undisclosed $619,500 mortgage against the house.

Now she faces foreclosure and the loss of her $75,000 down payment and nearly $100,000 she estimates she spent to make the property habitable. 

“It has been like a nightmare,” Quituisaca said in Spanish.

Quituisaca thought she had bought the house in 2022 from Michael O’Sullivan, who homebuyers had accused in lawsuits of defrauding them for years. 

O’Sullivan has not faced criminal charges and he denied any wrongdoing.

The accusations against him, first reported by Newsday in May, are one of the latest examples of alleged real estate scams disproportionately affecting Latino immigrants. Since 2016, at least 17 buyers have sued O’Sullivan, alleging fraud or breach of contract in deals in which they paid over $5 million, according to a Newsday investigation. At least half the plaintiffs are Latino, including eight who say English is not their first language, according to court documents and attorney statements.

Some buyers waited years for deeds that were never filed, while others said they were unaware their properties were in foreclosure.

"He preyed on the Latino community because of the language barrier situation," said Maribel Gomez, president of the Long Island Hispanic Bar Association, who was involved in connecting buyers to legal help. "It made it that much easier for him to do what he did."

recommendedHamptons homebuyers: Real estate agent, lawyers aided investor's alleged scam

O’Sullivan, 58, of Remsenburg, declined an interview.

His attorney, David Besso, said buyers came through referrals and real estate agents, seeking below-market deals and were warned of foreclosure risks. He noted some buyers signed affidavits, provided in court records, that acknowledged those risks. In addition, he said many of the buyers have remained in possession of their properties while O'Sullivan has been responsible for the payment of real estate taxes. 

“Mr. O’Sullivan has never made representations to buyers that were false or misleading,” Besso said, denying any fraud or targeting of Latino buyers.

In cases from Florida to Texas to California, Latino and Hispanic consumers have been targets for housing scams. At the same time, New York state officials have strengthened laws to combat fraudulent real estate sales, giving homeowners fresh muscle to fight back.

This spring, New York Attorney General Letitia James asked a judge to halt the eviction of East Hampton resident Juan Amon, while her office investigates allegations O’Sullivan fraudulently sold the property to vulnerable immigrant buyers “while concealing information on existing liens, mortgages, and/or pending foreclosures,” according to a court filing from the attorney general’s office.

On Friday, Suffolk County Supreme Court Justice Peter McGreevy granted that request, pausing the eviction proceeding while the attorney general's investigation is pending. 

Meanwhile, other affected families continue battling O’Sullivan in Suffolk County Supreme Court.

"When I took on Rosa’s case, it felt like the tip of the iceberg by the time I discovered all these other cases," said Florida Hoxha, Quituisaca's attorney.

Quituisaca, an immigrant from Ecuador and mother of four, is among four buyers facing foreclosure, while at least two buyers have previously been evicted and another three face potential eviction, according to court documents and interviews.

The friend who first alerted her that something might be wrong with her deal with O'Sullivan, Juan Marquina, is now one of the buyers suing the investor after purchasing a home that was in foreclosure.

That home went to auction at East Hampton Town Hall last week. It failed to attract a buyer and will be taken back by the lender, Deutsche Bank National Trust Company. 

Quituisaca is hoping for a resolution in the courts before her case comes to that. 

Since 2022, she and her partner have replaced the roof, plumbing and removed mold from their house in the Springs section of East Hampton. 

“Every day I ask God this doesn't go in vain,” she said. “That justice be done.”

Warning signs

From a second-floor office above a Prada store on East Hampton’s Newtown Lane, staff at OLA of Eastern Long Island have been fielding calls about O’Sullivan’s real estate dealings since 2020.

Erika Padilla, a legal advocate at the nonprofit, which supports Latino residents on the East End, said she first heard O’Sullivan’s name in December 2020 when a Latina woman called for advice.

O’Sullivan had offered to sell her a house for $800,000, asking for $300,000 down and promising to lend her the rest himself.

Padilla found a 2015 East Hampton Star article about a couple who said they’d bought a house from O’Sullivan, spent tens of thousands on renovations and were later evicted. Padilla said she warned the woman not to go through with the deal. Still, by the end of the month, another buyer — Juan Amon — agreed to purchase the home. He’s now one of the plaintiffs suing O’Sullivan.

Minerva Perez, OLA’s executive director, then alerted East Hampton Town Police to the call Padilla had received, asking Police Chief Michael D. Sarlo whether the department would look into a possible ongoing scam involving O’Sullivan.

"This obviously appears to be a scheme to defraud," Sarlo wrote in a December 2020 email reviewed by Newsday, adding he would forward the case to detectives.

In 2023, OLA officials said they assisted Mauricio Ocampo and Diana Ramirez, a couple facing eviction from a home they bought from O’Sullivan in 2014 for $250,000, in filing a complaint with East Hampton Police.

Ocampo, who owns a flooring business, previously told Newsday he spent nearly $1 million on renovations  and payments to O'Sullivan. In 2022, Ocampo said, O’Sullivan persuaded him to transfer the deed so O’Sullivan could negotiate with the bank. Instead, Ocampo alleged in court documents, O’Sullivan transferred ownership to another company, which moved to evict the family.

East Hampton Town Police Capt. Gregory Martin said that the department has received multiple complaints about O’Sullivan and opened an investigation after Ocampo’s complaint in July 2023.

“Upon the conclusion of this investigation, an element of criminality wasn’t substantiated,” Martin said.

In August 2023, attorney Daniel G. Rodgers, a former Suffolk County prosecutor, wrote to East Hampton police on the couple’s behalf, urging them to charge O’Sullivan with second-degree grand larceny and first-degree scheme to defraud, according to correspondence obtained by Newsday.

“I hand-delivered them a fairly straightforward case here of fraud and theft in significant amounts of money, and I provided significant documentary evidence to back it up,” Rodgers said.

He said he welcomed the Attorney General’s recent involvement in a separate case but remains frustrated that earlier warnings from him and others didn’t spur action by law enforcement.

Oscar Michelen, an attorney who represents Ocampo and three other buyers, also shared correspondence with Newsday between him and the Suffolk County District Attorney's office from last year about the  allegations against Hampton Dream Properties.

Michelen said he was told by the district attorney's office that it saw the cases as a civil matter.

Tania Lopez, a spokeswoman for the Suffolk County District Attorney's office, declined to comment.

‘Trust the system’

O’Sullivan, a graduate of Berner High School in Massapequa, founded Hampton Dream Properties LLC in 2013 after running a taxi business on the East End. O’Sullivan’s real estate business focused on buying foreclosed homes cheaply and reselling them, often to buyers unable to secure traditional mortgages, according to court documents and property records. He aimed to clear titles — a process he admitted could take years—and then sell or rent the properties.

O’Sullivan described his practice of negotiating short sales with lenders after purchasing deeds from the homes’ original owners in a 2023 affidavit. The affidavit was filed in support of a motion to dismiss a lawsuit from homebuyer Estefania Del Carmen Jimenez, who alleged O'Sullivan defrauded her when he sold her a house in foreclosure in Southampton's North Sea area in 2020.

The motion to dismiss was denied, and the case is ongoing.

Lawsuits allege O'Sullivan often sold homes before resolving foreclosures, resulting in homes later being auctioned to other buyers. O’Sullivan acknowledged in the affidavit that he sometimes made mistakes, failing to satisfy mortgages in at least three cases, and claimed he offered refunds or alternative homes to buyers.

Buyers said these offers came only after they'd spent heavily on repairs and renovations. Ten plaintiffs claim they spent more than $2 million combined on such expenses. Milton Barrera, who bought a home in 2019 and invested about $200,000 in renovations, said in a lawsuit that a man showed up at his door claiming he had bought the house at auction.

Barrera’s lawsuit, which is still active, claims O’Sullivan told him to ignore the man’s eviction notice. He stayed in the home and was later sued and ordered to pay $430,000. O’Sullivan, according to the lawsuit, offered to settle the case by paying $150,000 on Barrera’s behalf but didn’t make all required payments and a judge ordered Barrera’s wages garnished.

In December 2023, Barrera received a text message from O’Sullivan:

“I’m only trying to help you make it right and you’re [expletive] going all over town with a big mouth,” according to the lawsuit.

Barrera, through his attorney, declined to be interviewed. Barrera’s suit accuses O’Sullivan of fraud, breach of contract and targeting buyers with limited English skills “in a deceptive act and practice that must be stopped."

Plaintiffs in 11 of the 17 lawsuits against O’Sullivan said they did not bring attorneys when making deposits and signing agreements, buying homes subject to liens or mortgages without fully understanding risks. O’Sullivan’s legal team has said some buyers consulted lawyers before the closings. But by then, buyers had often already signed documents that their purchase was subject to existing claims against the properties.

In a standard real estate transaction, a buyer’s attorney typically conducts a title search and helps interpret any risks. Mortgage lenders also play a role, ensuring the property is free of claims before issuing financing. Without those safeguards, homebuyers say they had no idea the homes were burdened with liens and unresolved foreclosures.

Ian Wilder, former real estate attorney and executive director of Long Island Housing Services, said the disclosure form buyers signed would alarm any practicing lawyer because it acknowledges buyers would accept the properties subject to any liens while using vague language to describe when O’Sullivan would clear those liens.

“If an attorney was representing them, that would be malpractice,” he said.

The lawsuits filed by many of the homebuyers suing O’Sullivan are also notable because they involve plaintiffs who had the cash to purchase homes but lacked access to traditional lenders, said Juan Manuel Pedroza, a sociology professor at the University of California, Santa Cruz.

Even assuming O’Sullivan was well-meaning, he should be held to a higher standard given the stakes for the borrowers, said Pedroza, who has published research on scams targeting immigrants.

“You’re already putting yourself out there as someone who’s willing to serve folks who are vulnerable,” he said. “That should raise the bar for your own professional conduct.”

Several of the families said they trusted O’Sullivan because of his association with Lourdes Alban, now a real estate agent at Nest Seekers International in Bridgehampton. One couple, Felipe Urgiles and Kerly Palacios, named Alban as a co-defendant in a lawsuit filed in June against O’Sullivan, alleging she steered them to Hampton Dream Properties. They had purchased two homes from the company in Hampton Bays — one for themselves and another for Palacios’ mother, who is now facing eviction.

Geoff Gifkins, Nest Seekers' regional manager for the Hamptons, said while she was not an agent at the brokerage at the time of the sale, the company is looking into the matter.

"We are reviewing the situation and gathering the facts before we rush to judgement," he said in an email.

In 2022, at the time the sales occurred, Alban was part of Saunders & Associates, according to state records. The brokerage declined to comment.

A Suffolk County Supreme Court judge halted that eviction on July 3 pending a response to the lawsuit from the company that bought the house at auction.

“Alban has been steering Latino clients to O’Sullivan and Hampton for years knowing that they are serial fraudsters and that the prospective homebuyer will likely get defrauded and/or be thrown out of the home they purchased,” wrote Urgiles’ attorney, Oscar Michelen, in the lawsuit.

In a phone call, Alban said she never listed any homes for O’Sullivan and did not represent buyers in deals with him. “I did not work with [O’Sullivan] at all,” she said.

Perez, executive director of OLA, said Alban’s name came up often when families sought help after buying from Hampton Dream Properties.

“The intermediary spoke their language,” Perez said of Alban. “The intermediary knew them for a long time. The intermediary often time knew their family for a long time.”

Gomez, the Hispanic Bar Association president, said many immigrant buyers defer to professionals — such as attorneys and real estate agents — and hesitate to challenge authority.

“They're relying on someone who speaks their language, who says to them, ‘Look, everything's fine,” she said “Just trust the system. This is how it is in this country. This is how it works.’”

Eleven lawsuits from homebuyers — all but one of them Latino — remain active in Suffolk County Supreme Court. Some are fighting to stay in their homes. Others are seeking compensation.

In June, one family got a break.

A Suffolk judge ruled that Ocampo and Ramirez couldn’t be evicted while their lawsuit plays out. Judge David T. Reilly wrote that he granted the injunction because of the couple’s likelihood to succeed based on the merits of their lawsuit so far.

O’Sullivan’s attorney, David Besso, said the ruling doesn’t mean his client will ultimately lose.

But Oscar Michelen, who represents Ocampo, sees momentum shifting — not only for his client, but for all of the families challenging O’Sullivan in court.

“They’re going to have to answer questions under oath,” Michelen said. “We can’t wait for that day.”

Newsday's Melissa Azofeifa and Belisa Morillo contributed to this article.