Florida Woman Collected Rent, Tried to Sell Building She Didn’t Own, Suit Claims

The New York State attorney general has sued a Florida woman for allegedly scheming to take control of a Williamsburg low-income co-op apartment building, collecting more than $442,000 in rent payments for the building she had no legal rights to, and attempting to sell it for personal gain.

Florida resident Jessica Vargas allegedly created false documents to take control of the corporation that owns 13 Scholes Street, collected at least $442,000 in rent meant for the co-operative, and has made moves to sell the limited-equity HDFC (Housing Development Fund Corporation) property, an investigation by the Office of the Attorney General found.

New York Attorney General Letitia James said via a press release that the purpose of the lawsuit is to recover all stolen rent, to remove Vargas from having any claim to the property, and permanently ban Vargas from doing business regarding 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,” James said in the release.

“What was meant to be affordable housing for New Yorkers has now been manipulated into a Floridian’s personal piggy bank. That is unacceptable. We are suing to take this building out of Vargas’ hands and ensure it remains available to low-income New Yorkers.”

The three-unit, three-story building was constructed in the 19th century, historic maps show, and fell into financial distress in the late 20th century, according to the lawsuit. (Old listings show floor-through apartments two rooms deep, each with a chimney — a floor plate typical of although not exclusive to mid-19th century row houses.) In 1982, the city foreclosed on the property due to unpaid property taxes and placed it into the Tenant Interim Lease (TIL) program, which aimed to help residents create affordable housing co-ops. In 1996, tenants formed 13 Scholes Street Housing Development Fund Corporation as a limited-equity cooperative under New York’s Private Housing Finance Law.

Three shareholders — Carmen Cortez, Frances Rivera (Vargas’ mother), and Miriam Zusman — were listed as owners. Under HDFC rules, the building was meant to remain affordable housing, with no individual allowed to profit from it. However, after the deaths of two shareholders and a lack of formal board meetings since at least 1996, the building’s governance fell into legal ambiguity.

The lawsuit says that Vargas’ father, Albert Rivera, was never an official shareholder but tried to take control of the building following his wife’s death in 2013. He declared himself its owner and signed a six-year lease in 2017 with a private real estate firm, Scholes Residence LLC, for $6,500 per month, with an eventual purchase agreement for $1.4 million, the lawsuit says. Until his death in Florida in 2018, Rivera collected rent payments intended for the co-op.

Following her father’s death, Vargas allegedly took over the scheme. In August 2018, she petitioned a Florida court to be named administrator of her father’s estate without mentioning anything about 13 Scholes Street and only listing a small vacant lot in Florida as an asset, the lawsuit claims.

Once appointed, the lawsuit alleges, she began collecting rent payments meant for the HDFC, receiving at least $221,000 from Scholes Residence LLC while she was the administrator, and at least another $221,000 between May 2021 and March 2024, after she was removed as the administrator. The lawsuit claims that as well as paying herself, she also paid family members, including her husband and brothers, rather than using the funds to maintain the co-op.

As part of the scheme, Vargas allegedly created fraudulent documents, including a falsified “Shares Transfer Agreement” in 2021 that purported to transfer ownership to her father’s estate—despite the estate being closed and her father never holding shares. She also submitted false filings to city agencies, listing herself as the building’s president and managing agent, the lawsuit claims.

The lawsuit also accuses Vargas of submitting fraudulent legal filings in at least two Kings County Supreme Court cases, where she falsely claimed to be the estate administrator and a legal representative of 13 Scholes Street HDFC.

As Vargas collected rent, and failed to report it to tax authorities, she also let the building rack up charges, including $41,000 in unpaid property taxes and more than $3,000 in water and wastewater charges, the lawsuit alleges.

Jame says in the press release that the case is being handled by the Housing Protection Unit of the Attorney General’s office, which investigates fraudulent real estate dealings and illegal HDFC takeovers.

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