2013-08-26 STAR booth at fa.JPG

The STAR tax break registration booth staffed by the state tax department was a busy booth at the State Fair in 2013. More than 1,000 homeowners have already signed up at the fair for their 2014 School Tax Relief exemptions.

(Glenn Coin|gcoin@syracuse.com)

Mineola, N.Y.-- New York state doesn't charge homeowners to apply for the STAR property tax relief, but the state attorney general says one company tricked thousands of new homeowners into paying a fee to file the application.



New York State Attorney General Eric T. Schneiderman has sued STAR Exemption Advisor, YCA Corp. and its owner Arie Gal, for charging thousands of new homeowners fees to enroll them in the STAR program. Homeowners were scammed out of at least $1.5 million, the state attorney general said in a news release.



The company charged homeowners a fee that was 100 percent of the total tax savings for the first year even though applying for Basic STAR exemption costs nothing and can be accomplished without professional help, the attorney general said.

The company also took homeowners to court if they didn't pay the company's bills, the AG said.



"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. "These kinds of pernicious scams targeting unsuspecting homeowners will not be tolerated by my office."

The lawsuit filed in Nassau County Supreme Court seeks full restitution for homeowners and a complete accounting to identify all consumers who are entitled to refunds.



It also seeks additional costs, damages, and to permanently enjoin the respondents from marketing any Basic Star rebate or property tax reduction services within the state.

The attorney general's office received a temporary restraining order enjoining the defendants from continuing to do business in New York State, to pay full restitution and damages to all injured consumers and to render a full accounting of all victims to the office. The temporary restraining order also froze all of the defendants' assets.



The attorney general's office began an investigation of Gal and his business after receiving complaints from homeowners who alleged that his company had overcharged them for filing an otherwise free application that the homeowners completed themselves.



The homeowners said they were unaware that they were doing business with a private company believing they were sending their STAR application forms to Nassau County, not an intermediary.



The attorney general said Gal used an official-sounding name like "Star Exemption Advisor." His company allegedly sent misleading mailers, that had official-looking envelopes, making it look like official government agency documents that tricked homeowners into signing up with the company.



Once homeowners were approved for the exemption the company sent them invoices, the news release said. If payment was not sent immediately or homeowners disputed the charges, Gal allegedly sued them in Small Claims Court. The state attorney general said Gal even allegedly sued homeowners for applications the homeowners had personally filed with the Department of Assessment.



Many homeowners settled with Gal to avoid litigation, the attorney general said. Others who went to their scheduled court date were shocked to see so many other homeowners in the same predicament, Schneiderman said.



The New York State School Tax Relief ("STAR") Program provides a partial exemption from school property taxes for primary residences that are owner-occupied with a total household income of $500,000 or less. To receive the exemption, new homeowners must file an application with their local assessor's office by Jan. 2 in order for the exemption to be applied to the upcoming and subsequent years' tax bills.