Company shut down for scamming homeowners out of $1M in tax savings

Posted at 12:20 PM, Jan 22, 2018
and last updated 2018-01-22 12:38:48-05

The Attorney General's office announced a court decision against STAR Exemption Advisor, YCA Corporation and owner Arie Gal for charging thousands of homeowners fees to enroll in the free Basic STAR Exemption Program. 

According to the A.G., Gal milked new homeowners out of at least $1.7 million by charging them excessive fees to enroll in the free program. Gal used the official-sounding name "Star Exemption Advisor" to swindle people out of their tax savings.

The New York State School Tax Relief (STAR) Program -- a property tax rebate program-- gives a partial exemption from school property taxes for residences that are owner-occupied with a total household income of $500,000 or less.

The A.G.'s office opened an investigation into Gal and his business, after receiving complaints from homeowners alleging Gal had overcharged them for simply forwarding free applications they filed themselves. 

Here's how Gal's scam worked: 

"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."

"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.