By 2023, James and Danielle Quackenbush had lived in their house at 93 Three Mile Harbor Road for nearly a decade. During that time, their attorney says, they had paid over $1 million in what they believed were payments to Michael O’Sullivan, managing member of the limited liability company Hampton Dream Properties, to purchase it.
Mr. O’Sullivan specializes in selling houses that are in foreclosure. For years he allegedly told the Quackenbushes that they would eventually receive the deed and title to their property. They never did. They are now suing Mr. O’Sullivan in Suffolk County Supreme Court, and they’re not alone.
There have been 12 cases filed in the court against Mr. O’Sullivan and Hampton Dream since just 2017. It’s tough to get an accurate picture of the properties he currently owns because he has shifted ownership to other L.L.C.s. However, a title search conducted by lawyers for the Quackenbushes shows five properties currently owned by Hampton Dream, with one located in East Hampton Town, at 121 Cedar Drive.
It is alleged in their lawsuit, filed by Tiffany Frigenti and Jaclyn Ruggirello of Lynn Gartner Dunne & Frigenti, that Mr. O’Sullivan and Hampton Dream offer to purchase deeds at a discount from property owners in foreclosure. Deed in hand, they attempt to leverage the foreclosure lender to approve a short sale of the property, “or come to some other financial arrangement beneficial to the enterprise.” Then, he finds a buyer, like the Quackenbushes, promising to one day convey clear title to the property.
Mr. O’Sullivan is often introduced to his buyers by mutual friends. In an email, Ms. Frigenti said the Quackenbushes had participated in two prior investments with Hampton Dream Properties that had “yielded modest, but overall positive results.”
The lawsuit continues: “Over time, O’Sullivan, Hampton Dream, Grausso [Mr. O’Sullivan’s attorney] and TitleLand [his preferred title insurance company], through a pattern of racketeering activity, work to coerce the new owner into paying more than originally agreed to, misappropriate the buyer’s funds to pay for other enterprise activities, and allow fraudulently secured mortgages to further encumber the property.”
It’s an alleged real estate scheme that Mr. O’Sullivan appears to have tried previously. If anything set the Quackenbushes apart from the others, it was that they were white.
“The majority of people that Michael O’Sullivan targeted have been Latinos,” Minerva Perez, executive director of Organizacion Latino-Americana, said in a phone call Monday.
Her organization is helping 15 Latino families, 14 of them from East Hampton Town, who had deals involving Mr. O’Sullivan. “These are hard-working, successful business owners, just like the Quackenbushes.”
“This is a pervasive operation,” Ms. Frigenti said Tuesday.
The Quackenbushes’ lawsuit portrays the nightmare closing, in December 2023, at which the couple, after years of broken promises, finally believed they had received a clean deed and title for the property they had been nurturing for the past decade.
Problems began the week before, when Mr. O’Sullivan allegedly demanded another $325,000. They wired him $150,000, fearing if they didn’t, they’d lose all they had laid out in the previous years. However, at the closing, they received neither a clean title nor deed to the property.
Instead, they learned that Mr. O’Sullivan was taking out two additional mortgages, valued at over $1 million, from a hard-money lender using their property as collateral, according to their lawsuit.
When the Quackenbushes protested and “caused a disruption in the closing proceedings” according to the legal filing, Mr. O’Sullivan warned them “not to ‘blow up’ the closing.”
Turns out, their decade of payments hadn’t gone to the purchase of their house.
According to the lawsuit, “Grausso explained that rather than use the Quackenbushes’ payments toward the property to satisfy any outstanding liens on the property, O’Sullivan had used their money to fund his business and that is why O’Sullivan needed to take out additional mortgages on the property.”
“He was borrowing from Peter to pay Paul,” explained Ms. Frigenti.
Mr. Grausso did not return a call for a comment on Tuesday.
Handwritten contracts. Purposely omitted documents. Intimidation. These were just some of the tactics Ms. Perez said Mr. O’Sullivan used. She said one family told her that he once slammed a fake police badge on a table at a Panera Bread store in Hampton Bays to cow them. “I know everyone in this town,” he reportedly said.
Other times, according to Ms. Perez’s conversations with some of his victims, he played the good guy. He’d help his clients obtain building permits through the town to improve what they thought were their properties. The bank sent a homeowner a letter letting them know the house they lived in would soon go to auction. “The bank is wrong,” he is alleged to have said, and told them he was on their side. He’d fix it.
In the Quackenbushes’ lawsuit, Ms. Frigenti quoted Mr. O’Sullivan telling the couple that if they paid him the extra money ahead of the closing he would “Make everything happen like the way [he had] been promising for 10 years and this will be OVER!”
In 2015, The Star published an article about the Keyser family, who were evicted from their Queens Lane, East Hampton, house, which they believed they had purchased from Hampton Dream Properties. Mr. O’Sullivan is named in the article.
“These people were paying property taxes to the town. How can this get so far? That’s my bigger question,” said Ms. Perez.
In March, New York State Attorney General Letitia James, citing a law that took effect last July, got involved with some of the OLA families. The new law prevents victims fighting deed theft from being evicted.
Jake Turner, the town attorney, said the town currently has one active prosecution against Hampton Dream, regarding construction without a building permit. The property in question is also the subject of a civil suit currently in Suffolk County Supreme Court: Quituisaca v. O’Sullivan.
Hampton Dream moved to dismiss the case, claiming it didn’t own the property when the construction occurred.
“The town is opposing the motion, as all documentary evidence reviewed indicates that Hampton Dream Properties, L.L.C., was the owner at the time,” Mr. Turner said in an emailed statement.
“The town is aware of the ongoing situations involving Hampton Dream Properties, L.L.C., and Michael O’Sullivan. These unfortunate cases have been thoroughly investigated. The East Hampton Town Police Department has expended vast resources and worked collaboratively with victims, advocates, and prosecutors. There has been no stone left unturned, while legally binding wording in many of these contracts have caused roadblocks to prosecution and placed cases in the civil realm. We look forward to any further assistance the attorney general investigation may provide in ensuring that nobody is taking advantage of our community members.”
He continued: “Real estate purchases involve large sums of money and involve people’s homes. As such it is essential that purchasers utilize independent attorneys and title companies to ensure all rights are protected.”
The Quackenbushes still live in their house, though it has $1.7 million in liens against it. While they have a deed provided by Mr. O’Sullivan shortly after the December 2023 closing, they claim he failed to provide them with a specific document, which makes it impossible to record with the county.
Their lawsuit includes an injunction that precludes Mr. O’Sullivan from further leveraging the property or trying to sell it.
New Yorkers who believe they are a victim of deed theft are encouraged to contact the state attorney general by calling 800-771-7755, emailing [email protected], or filing a confidential complaint.
