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A.G. Schneiderman Announces Court Decision Shutting Down Company For Scamming Thousands Of Homeowners Seeking Property Tax Rebate; Secures Full Restitution For Victims

STAR Exemption Advisor and Owner Arie Gal Charged Homeowners for Simply Forwarding Tax Exemption Applications To Nassau County Assessor’s Office – Swindling New Yorkers Out Of At Least $1.56 Million

Attorney General Eric T. Schneiderman recently announced a court decision against STAR Exemption Advisor, YCA Corp. and its business owner Arie Gal for scamming thousands of new homeowners out of at least $1.562 million by charging them excessive fees to enroll in the Basic STAR Exemption Program, which is otherwise free. The court ordered that full restitution be paid to all those affected, and that all consumer contracts entered into with the respondents for Basic STAR rebate services be rescinded, all profits disgorged, and an accounting done to identify all consumers who are entitled to refunds. The court also ordered that civil penalties be paid for each instance of a violation of the General Business Law, and issued a permanent injunction stopping the respondents from marketing any Basic Star rebate or property tax reduction services within the State of New York. The Attorney General’s office also secured a restraining order freezing all of the respondent’s assets.

“Home ownership is challenging enough. Preying on and deceiving New Yorkers by manipulating the STAR program – one of the few forms of financial relief available to homeowners – is shameful and illegal,” said Attorney General Schneiderman. “Today’s decision serves as a reminder that my office will continue to aggressively pursue those seeking to scam New York homeowners.”

The New York State School Tax Relief (“STAR”) Program provides a partial exemption from school property taxes for primary residences that are owner-occupied with a total household income of $500,000 or less. To receive the exemption, new homeowners must file an application with their local assessor’s office by January 2 each year in order for the exemption to be applied to the upcoming and subsequent years’ tax bills.

The Attorney General’s office commenced an investigation of Mr. Gal and his business after receiving numerous complaints from homeowners who alleged that his company had substantially overcharged them for filing an otherwise free application that the homeowners had completed themselves. Moreover, homeowners were unaware that they were doing business with a private company, as they believed they were sending their Nassau County application forms to the County, not an intermediary.

Mr. Gal used an official-sounding name like “Star Exemption Advisor” to scam thousands of homeowners out of tax savings that rightfully belonged to them. His company sent misleading mailers that looked like official government agency documents, tricking homeowners into signing up with them to apply for the Basic STAR exemption for a fee. The respondents used official-looking envelopes to make homeowners think that the mailers were coming from a government agency. Moreover, the company charged homeowners an exorbitant fee that was 100 percent of the total tax savings for the first year, even though applying for Basic STAR exemption costs nothing and can be accomplished without professional help.

Once homeowners were approved for the exemption, the company sent them invoices. If payment was not remitted immediately or homeowners disputed the charges, Mr. Gal sued them in Small Claims Court. Mr. Gal even sued homeowners for applications the homeowners had personally filed with the Department of Assessment. Upon receiving a Small Claims Court notice from Mr. Gal, most homeowners settled to avoid litigation. Homeowners who went to their scheduled court date were shocked to see so many other homeowners in the same predicament.

The Office of the New York State Attorney General thanks Acting Nassau County Assessor James E. Davis, former Deputy County Attorney Robert Mehran, former Commissioner of Consumer Affairs Madalyn F. Farley and the staff of the Nassau County Assessor’s Office and Department of Consumer Affairs.

The investigation was handled by Valerie Singleton, Assistant Attorney General in Charge of the Nassau Regional Office; Assistant Attorney General Christina H. Bedell, Supervising Investigator Paul Matthews, and Senior Consumer Frauds Representative Adam Levin, with assistance from former Director of Research and Analytics Lacey Keller and Analyst John Ferrara. The Nassau Regional Office is part of the Division of Regional Affairs, led by Marty Mack, Executive Deputy Attorney General for Regional Offices.