Penalty Amount
$824,000
Consumers Affected
17
New York Attorney General Letitia James secured a settlement with 425 Marcy, LLC and its principal Ezra Unger over the unlawful pre-sale of condominium units at 427 Marcy Avenue in Williamsburg before the required Martin Act offering plan was accepted for filing, and the misuse of $6.715 million in buyer down payments that were never placed in escrow. Unger agreed to repay residential buyers their down payments with interest or provide purchase credits, pay up to $824,000 in penalties, and is barred from selling securities in New York for six years. Note: this is a real estate offering-plan/escrow enforcement action rather than a data privacy matter; 'notice_failure' is the closest available taxonomy mapping (selling without the required offering plan disclosures).
Under the settlement, Unger must repay residential buyers their full down payments plus interest or, at the buyer's election, credit that amount toward purchase of their original unit under a new developer's offering plan, with the new developer required to repay or credit buyers within seven business days after OAG accepts the new offering plan for filing. Unger must also pay up to $824,000 in penalties ($324,000 for selling units and parking spaces before the offering plan was accepted for filing and $500,000 for failing to escrow down payments), is barred from marketing, offering for sale, or selling securities in or from New York for six years, and acknowledged violating the Martin Act and Executive Law 63(12).
Although this is a real estate enforcement action rather than a data privacy matter, in-house teams at developers, sponsors, lenders, and investors should review purchase and sale agreements and deposit/escrow provisions to confirm buyer down payments must be held in a separate escrow account and released only upon closing or as otherwise permitted by law. Verify that marketing, pre-sale, and contract execution clauses are expressly conditioned on OAG acceptance of the offering plan, and check representations, warranties, and indemnification provisions in joint venture, acquisition, and financing agreements for Martin Act and Executive Law 63(12) compliance covenants. Teams should also assess successor-developer obligations governing the timing of buyer repayments or purchase credits, and ensure covenants restrict principals from offering or selling securities in New York during any applicable ban period.
Entity
425 Marcy, LLC
Industry
Real EstateOfficial Press Release
https://ag.ny.gov/press-release/2026/attorney-general-james-secures-over-6-million-brooklyn-homebuyers-cheated-condo
425 marcy avenue llc et al aod 2026
https://ag.ny.gov/sites/default/files/settlements-agreements/425-marcy-avenue-llc-et-al-aod-2026.pdf
New York Attorney General Enforcement Page
https://ag.ny.gov/press-releases
"425 Marcy, LLC and its principal, Ezra Unger"
"Unger must pay up to $824,000 in penalties: $324,000 for selling units and parking spaces before the offering plan was accepted for filing and $500,000 for failing to place buyers’ down payments in escrow"
"Under New York's Martin Act, condominium developers must submit an offering plan to OAG and have it accepted for filing before they can market or sell units."
"Unger has also acknowledged that he violated the Martin Act and Executive Law 63(12)."
"unlawfully sold units and collected down payments from purchasers at 427 Marcy Avenue in Williamsburg before OAG had accepted the building’s required offering plan for filing"
"None of the down payments were placed in a required escrow account."
$240K
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