FOR IMMEDIATE RELEASE:
December 17, 2002

FOR FURTHER INFORMATION CONTACT:
Genene Morris (973)504-6327

NEWARK - New Jersey is seeking to revoke the license of a Hudson County real estate appraiser who allegedly prepared and submitted misleading and fraudulent appraisals as part of an elaborate predatory lending and land flipping scheme that cheated low-income, minority consumers, Attorney General David Samson and Consumer Affairs Director Reni Erdos said.

The State's administrative complaint, filed before the New Jersey State Board of Real Estate Appraisers, alleges certified residential real estate appraiser Alexander Marcopul of Bayonne submitted appraisals that fraudulently inflated the values of properties in Essex County. The four-count complaint focuses of Marcopul's appraisals of four properties in Irvington and Newark.

In addition to the administrative action, Marcopul is also the subject of another lawsuit filed by the State alleging violations of New Jersey's Consumer Fraud Act and Law Against Discrimination. In May, Marcopul and his company, Tri-State Residential Appraisers, Inc., were named in the State's 33-count complaint alleging they and 19 other defendants carried out a massive predatory lending scheme that defrauded minority consumers who sought to become homeowners. The complaint alleges that Marcopul's fraudulent, misleading and inaccurate appraisals were used to carry out the land-flipping portion of the scheme that overly inflated property values. Land-flipping schemes typically refer to fraudulent transactions involving individuals buying property at a low price and then selling the property within a short period of time for a much higher price.

"The Board of Real Estate Appraisers has in place rules and regulations that establish standards to which real estate appraisers must adhere," Governor James E. McGreevey said. "These standards are not subject to negotiations nor deviations. Licensees do not get to determine when they will and will not obey the rules that govern their practices."

"Mr. Marcopul's alleged activities indicate fraud and incompetence," Attorney General Samson said. "Our cases against him allege that he used his license to cheat, lie and defraud innocent consumers and enrich unscrupulous characters."

The most recent complaint against Marcopul alleges he repeatedly admitted that he failed to adhere to standards governing the practice of real estate appraising.

Specifically, Marcopul admitted during the course of the State's investigation into his activities that he:

• failed to review the Garden State Multiple Listing Services ("MLS") for important information on homes he was appraising and on properties he identified as being comparable to the residences he was appraising;
  
  
• falsely stated in appraisal reports that no one provided him with significant professional assistance in preparing reports;
  
  
• failed to adequately supervise the work done by his son, who worked for him as an apprentice and for whom he served as supervising appraiser;
  
  
• failed to research sales history of the properties he was appraising; and
  
  
• submitted appraisal reports that were false, inaccurate and replete with errors resulting in the values of the appraised properties being inflated.

For example, the complaint alleges, Marcopul agreed to appraise a single-family residence at 33 Allen St. in Irvington for Neighborhood Mortgage of Elmsford, N.Y.

In September 2000, the complaint alleges that Marcopul appraised the property, which had two months earlier sold for $40,000, at $100,000. In his report, Marcopul described the property as being in "average" condition, even though he later acknowledged to State investigators that the property was "not in great shape" and should have been characterized as "fair" or less than average. In fact, the MLS warned in its description of the property to "use caution when showing. Bring flashlight."

Marcopul further identified three previously sold Irvington properties as being comparable to the residence at 33 Allen St. In fact, the supposed "comparables" were in far better condition than the Allen Street home and were described in the MLS as being "beautiful," "lovely," and/or "delightful."

In another example, the complaint alleges, Marcopul was hired by Neighborhood Mortgage in September 2000 to appraise 224 Weequahic Ave., Newark, a roach-infested, single-family residence that had holes in the walls, floors and ceilings. The property had been sold one month earlier to Neighborhood Properties Group for $44,000. Marcopul appraised the property at $125,000 and compared the residence to other properties in Newark that were in far better condition and that were, in fact, incomparable to the Weequahic home.

The complaint further alleges that Marcopul also inflated the value of another Newark single-family residence, 172-174 Vassar Ave., in an appraisal report for Neighborhood Mortgage. Once again, the complaint alleges, Marcopul used properties in far better condition than the property he was appraising in an attempt to justify his inflated appraisal. He valued the Vassar Avenue home at $135,000 even though the property had sold just two days before to EON institute for $82,000. Marcopul, allegedly failed to research the history of the property or to ascertain whether the property he was appraising was listed for sale at the time of the appraisal.

Neighborhood Properties Group and EON Institute are also named as defendants in the State's 33-count predatory lending suit.

"Time and time again, the complaint alleges, Marcopul said his son who was working for him as an apprentice helped him with the appraisal reports and admitted he had "become lax" in his supervision of his son's work," Erdos said. "Yet, his signed appraisal reports state that no one provided significant professional assistance to him in preparing the report."

In preparing the different reports for the Newark properties, the complaint further alleges, Marcopul used the same addresses of three other Newark properties to compare to the homes he was appraising. However, each report shows contrasting descriptions of the "comparable" properties.

For example, the complaint alleges, Marcopul used 141 Keer Ave., in his appraisal of the three Newark properties. In his report for 224 Weequahic, Marcopul described 141 Keer as having eight rooms, including four bedrooms and two bathrooms with a gross living area of 1,800 square feet.

However, in the report for 172-174 Vassar Ave., Marcopul said the Keer Avenue property had a room count of eight rooms, comprising four bedrooms , two bathrooms and a gross living area of 2,500 square feet.

Finally, in a report Marcopul prepared for 229 Goldsmith Ave., Newark, Marcopul described 141 Keer as having 10 rooms, including five bedrooms and two bathrooms with a gross living area of 1,900 square feet.

"Licensure is a privilege - not a right - and based upon Marcopul's alleged activities, it is abundantly clear that he no longer deserves the privilege of deriving an income as a real estate appraiser," Erdos said.

The State's complaint seeks to have the Board of Real Estate Appraisers revoke Marcopul's license, order him to cease and desist from the practice of real estate appraising in New Jersey, and require him to pay costs and fees.

Deputy Attorney General Megan Matthews of the Division of Law is handling this matter for the State.