Capital Region Chuck Cefalu Trolling for victims Clifton Park New York

Chuck Cefalu uses CRREIA to find new real estate investors to defraud investors. Investors lost hundreads of thousands of dollars when Cefalu pulled the same con in Glens Falls, NY.

Article, Post Star, Glens Falls, NY

Recently retired school teacher Carol Young thought she was investing in the future of Glens Falls when, about five years ago, she put more than $100,000 of her savings into real estate ventures affiliated with Charles Cefalu and his mother, Sophie.

The Gloversville resident was told her money would eventually yield a hefty and regular return. After touring some of the properties pegged for development, the investment seemed like a wise move.

"I was in the stock market. I had an annuity. I carefully saved over the years, but I did feel that this would give me a cash flow," Young said. "I thought it couldn't fail."

Now, with foreclosure lawsuits mounting against companies tied to the Cefalus and not a penny returned on her original investment, Young is furious, and she feels duped.

"I just trusted in the venture and thought it was a good place to place my money," she said. "You feel foolish to be taken by somebody like this."

Young is one of many investors who say they have not seen a return on money they fronted to SBC Properties LLC, Canfield Properties LLC, Parkside Development Partners LLC and other ventures tied to the Cefalus.

What is more, they say, the Cefalus have refused to provide them with lists of other members or access to the books, or to return phone calls.

Charles Cefalu, in an interview with The Post-Star on July 23, said he is not a member of any of the LLCs now facing foreclosure. He said he was involved with many on a consulting basis and as a real estate broker, but his role ended there.

Investors, however, say Charles Cefalu was their primary contact, followed by Sophie Cefalu. They say they never dealt with anyone else.

Neither Charles nor Sophie Cefalu has returned The Post-Star's calls seeking comment for the last two weeks.

Lack of transparency

Gary Marcantonio, a consultant and spokesman for a group that invested in Crandall Square Condominiums, a Cefalu project now in foreclosure, said the Cefalus' financial dealings have lacked transparency.

Marcantonio said, for at least two years, investors have not received Schedule K-1 tax forms that allow them to declare their share of losses or gains.

"The books and records have never been observed or looked at by any member to my knowledge," Marcantonio said.

Investors say they would like to find a way to move forward with the faltering projects, but do not believe they have enough information to do so.

And without the cooperation of Charles and Sophie Cefalu, questions remain as to whether other mortgage or tax obligations exist on the properties facing foreclosure.

"No one seems to know specifics about what other liabilities may exist, if any," Marcantonio said.

Some investors say they are having a hard time figuring out who else has sunk money into the properties.

"There are so many different people, and we're spread out all over New York," said Thomas Scully, an investor from Indian Lake. "We're like a terrorist cell - we're so divided that we don't know who each other are."

Scully said he put $160,000 from the sale of his restaurant of 28 years into two Cefalu ventures tied to the condo project.

Timothy O'Connor, another investor, said he also put $60,000 into two Cefalu entities. He was initially told he'd make 30 to 35 percent return each year.

To date, O'Connor hasn't made any money or had access to financial statements.

"No one knows where all the money has gone," he said.

In an earlier interview, Charles Cefalu described O'Connor as a "dissident" member whom the group unsuccessfully tried to buy out.

O'Connor claims that, after he raised concerns about Charles and Sophie Cefalu's leadership, Charles Cefalu offered to give him his money back over a period of two years with zero interest, which he declined.

Allegations lodged

While some investors feel they've been scammed, it remains unclear whether officials believe any of the allegations amount to criminal behavior.

Glens Falls Police Detective Sgt. Peter Casertino said the Police Department received a complaint from an investor who questioned whether Cefalu broke the law. He said the Warren County District Attorney's Office is reviewing the matter.

District Attorney Kate Hogan could not be reached for comment Wednesday.

Some investors, like O'Connor, say they aren't going to take the matter lying down. He plans to hire a lawyer this week to help him recover his investment and then some.

But others, like Young, don't know if they have any recourse.

Young doesn't want to sink more money into the problem with no guarantee she'll recoup the legal expenses - or her original contribution. Still, it's too much money to walk away from.

"Bigger fish than I am are trying to get him," she said, with resignation in her voice. "I just don't know what to do."

Article, Post Star, Glens Falls, NY

Ajudge has rendered decisions in at least five of the dozen foreclosure lawsuits filed last year against companies managed by Sophie Cefalu.

Judge David Krogmann ordered that some properties be auctioned to recover almost $1 million owed on them, and he assigned priority to competing claims in three other cases, according to documents filed late last month in state Supreme Court in Warren County.

Krogmann ordered that four Glens Falls properties be sold in auction to recover funds for the SEFCU credit union, which held mortgages for two LLCs managed by Sophie Cefalu.

The Smith Flats Office Center at the corner of Bay and Washington streets, as well as a few rental properties on New Pruyn, Bacon and South streets, will be sold to recoup some of the $975,000 owed on the buildings.

The SEFCU cases were assigned to a referee, who will schedule the auctions to take place at the Warren County Municipal Center.

Late last week, Krogmann also issued a decision pertaining to three foreclosure actions on the same address. Because all three claimed to hold the first-priority mortgage, Krogmann settled the issue of who was the primary lender.

The order of multiple mortgages is important because it determines who is paid first in the event of foreclosure.

The three cases were originally filed last year regarding 86 South St., a small building across from Rite Aid.

SBC Properties LLC - a group managed by Sophie Cefalu and affiliated with her son, Charles Cefalu, who often represented the company in real estate transactions - bought the South Street building in 2005 from Ann and Rolando de Avila.

The de Avilas loaned SBC the full amount and believed they held the only mortgage. But on the same day of the sale, SBC took out a second, smaller mortgage from a real estate group where Charles Cefalu served as treasurer, records show.

When the mortgages were recorded in the Warren County clerk's office, the smaller one was listed first.

Things got even more complicated when the real estate group decided to sell its interest in the "other" mortgage - twice. The loan was first transferred to Queensbury residents Robert and Karen Olson in 2005, and again to a Lake Placid investor group as part of a larger loan consolidation a few years later.

It wasn't until the Lake Placid group started foreclosure proceedings on a number of properties, including 86 South St., that the other mortgage-holders became aware of one another and followed suit.

In his recent decision, Krogmann addressed all three cases together. He decided that the de Avilas had the primary mortgage, even though it was not recorded as such, because they conveyed the property in question to SBC.

After giving priority to de Avila, Krogmann said he would not decide who is the rightful owner of the other mortgage - the Olsons or the Lake Placid group. He recognized that the mortgage was assigned twice, and said those two parties may challenge each other's claims in a separate lawsuit.

For the Lake Placid Group and the Olsons, the legal issues with the Cefalu LLCs don't end on South Street, as both parties are seeking to foreclose on other properties.

The Olsons also hold a mortgage for a house on New Pruyn Street. A court-appointed referee determined SBC owes the couple about $51,000 in that case, but it has not yet been sent to auction.

The Olsons' attorney was not available for comment this week.

As for the Lake Placid group, there were five other properties cited in its original foreclosure lawsuit, totaling more than $500,000 in loans.

In his recent decision, Krogmann threw out the defense and granted relief to the Lake Placid Group, according to attorney Steven Farer, a partner with the law firm representing the investors.

The judge's decision states that the Cefalu LLCs "failed to support any of the denials" or other claims they made when responding to the lawsuits.

Farer said that, generally, the next step is to assign a referee to compute the amount due, followed by a foreclosure judgment and auction.

Earlier this summer, one other pending foreclosure lawsuit was decided. A referee determined that SBC Properties owes a Florida investor $150,000 for a mortgage on 24 Broad St.

The referee could not be reached this week for an update.