New York Attorney General Letitia James on Tuesday sued Jessica Vargas, a Florida resident, for running a scheme to fraudulently claim control over a Housing Development Fund Corporation (HDFC) building in Williamsburg.
An investigation by the Office of the Attorney General found that Vargas created false documents to assume control of the corporation, collected at least $442,000 in rent meant for the cooperative and is now attempting to sell the building for personal profit, according to a press release.
James’ civil lawsuit seeks to remove Vargas from her claimed position within the corporation, recover all stolen rent and permanently bar her from any further business related to the property.
“Jessica Vargas declared herself president of a building she had no claim to, exploiting New Yorkers for her personal gain while living over a thousand miles away,” said James. “What was meant to be affordable housing for New Yorkers has now been manipulated into a Floridian’s personal piggy bank."
A HDFC building is a low-income cooperative corporation established in 1996 exclusively to develop a housing project for low-income New Yorkers. HDFCs are affordable housing co-ops collectively owned and operated by their residents, or shareholders, who together make decisions about care and upkeep of the building.
All the original resident shareholders of 13 Scholes St. have passed away. The investigation revealed that Vargas, a former shareholder’s daughter, has since exploited the corporation for her own personal benefit while leaving the building in debt.
The investigation revealed that although Vargas was once the administrator of the estate of her later father, Albert Rivera, the estate never contained any assets related to 13 Scholes, and it was closed in 2021. Despite never holding any legal position within the HDFC, Vargas has falsely claimed to be its president, secretary, treasurer and sole shareholder on multiple occasions.
James alleges that Vargas fabricated stock certificates, falsely reported ownership to city agencies and diverted hundreds of thousands of dollars that should have gone toward maintaining the cooperative to line her own pockets. She also failed failed to pay over $40,000 in property taxes, as well as over $3,000 in water bills, leaving the building in financial distress.
Now, Vargas is seeking to sell the building and pocket the profits, despite not having the legal right to do so, James said.
