New York State is disciplining real estate agents and conducting scores of investigations in the state’s toughest enforcement of fair housing laws in decades as part of a sweeping response to Newsday’s 2019 Long Island Divided project.
The state has revoked the license of a real estate agent accused of housing bias in what records and interviews show is the first such instance in more than 20 years. The housing-discrimination crackdown includes 80 investigations of agents, brokers and real estate instructors stemming from the Newsday project.
The New York Department of State has sought to deny license renewals to three agents "based on the licensees’ alleged misconduct, as described in the Newsday report and investigated by" the agency, spokeswoman Erin McCarthy said in a statement. The three agents have appealed the denials, McCarthy said.
The state is seeking to suspend or revoke the licenses of 18 additional agents, all of whom were cited in the Newsday investigation, which found evidence of widespread separate and unequal treatment of minority potential homebuyers.
The state also has filed complaints alleging that three real estate instructors failed to comply with New York law governing state-mandated classes and made "inappropriate and/or offensive statements," state documents show.
The state has opened 52 additional investigations into potential misconduct by real estate professionals tied to the Newsday investigation, and it expects to file more complaints, McCarthy said.
The state's investigations into three other agents have been closed, in two cases because the agents died and in one case because the agent's license expired more than two years ago and the Department of State no longer has jurisdiction, McCarthy said.
Watch and read Newsday's undercover investigation, 'Long Island Divided.'
The deputy chief of enforcement for the Department of State's Division of Licensing Services, John Goldman, called the effort "the 800-pound gorilla in the room from an enforcement standpoint" at the December meeting of the New York State Board of Real Estate, which sets policy for the agency. "The state initiated a process to conduct our own investigations relevant to Newsday's findings, which we've been actively doing for quite some time now," Goldman said at a board meeting on March 11.
The agents who have been disciplined or are under investigation were videorecorded by Newsday as they met with pairs of undercover testers — one white and one either Black, Hispanic or Asian — who had similar financial profiles.
In complaints filed by the Department of State, officials cited Newsday's videos as evidence that agents engaged in illegal conduct such as steering customers to different communities on the basis of race or serving white customers while refusing to work with equally qualified minority customers. Federal, state and local fair-housing laws prohibit discrimination on the basis of race and other factors.
In nearly 200 pages of complaints and other documents filed by the Department of State, which licenses real estate agents and instructors, officials alleged that:
- One agent told a white homebuyer to "look into recent gang killings" in the Brentwood area but told a Black homebuyer that "the nicest people" live in the community.
- Multiple agents made "offensive" and "disparaging" comments about largely minority communities to white clients, such as "I'm not going to send you anything in Wyandanch unless you don't want to start your car to buy your crack …"
- Another told a white customer that Hispanics "took over" the East Hampton school district.
- One told a Hispanic prospective buyer that a certain North Shore listing "might be a bit pricey for you" without first asking about his budget but told a colleague to give a white buyer "whatever information he's looking for because he's a stand-up guy" and told the white man he would be "more comfortable in a certain demographic area."
- Several refused to show homes to minority buyers without proof of mortgage prequalification or a signed buyer's agent contract but did not impose the same requirements on white customers.
- Three instructors provided state-mandated lessons in fair housing for agents that fell far short of the required three hours and included "inappropriate and/or offensive statements," such as one instructor using the phrase "Jewish lightning," a reference to arson.
The agent whose license was revoked last year, Anne Marie Queally Bechand, formerly with Cold Spring Harbor-based Signature Premier Properties, was recorded with a hidden camera as she met with two undercover testers from Newsday — one white, one Black. Meeting with the Black woman, Queally Bechand refused to take the customer to tour homes unless a lender had prequalified her for a mortgage, saying, "I won’t do it." By contrast, she took the white tester out for two tours without requiring prequalification.
The Department of State opened its inquiry on Queally Bechand "to investigate the allegations concerning discrimination as reported in the Newsday article," McCarthy, the agency spokeswoman, said in an email.
A woman who answered a phone listed under Queally Bechand’s name in public records ended the call when a Newsday reporter asked if she would like to comment about the license revocation.
Queally Bechand was one of 93 real estate agents and brokers videorecorded in Newsday’s three-year investigation into housing bias. The license revocation and other state investigations are elements of what appears to be a much stricter approach to enforcement of anti-bias laws in the past year by local, state and federal authorities, fair-housing advocates and prominent real estate attorneys said. Taken together, the state's actions add up to an unprecedented number of housing-bias cases stemming from a single investigation, experts said.
"What we've seen in the past year or so is an increase in the number of government agencies who have started to take an active role in enforcement" of fair-housing laws, said Alfred Fazio, a partner with Manhattan-based law firm Capuder Fazio Giacoia who has been general counsel for real estate industry boards in New York City and Ulster County and an instructor for the New York State Association of Realtors. The "public outcry" that resulted from the Newsday investigation "was the motivating factor" behind the stepped-up enforcement and new legislation, he said.
'The message is clear that systemic racism does exist … [and] it's not going to be tolerated.'Attorney Alfred Fazio, who has been general counsel for real estate industry boards in New York
"The message is clear that systemic racism does exist … [and] it's not going to be tolerated, and appropriate action is going to be taken," Fazio said.
In addition to revoking Queally Bechand's license, state documents show the Department of State also is seeking to impose penalties including suspension or revocation of the licenses of:
- Aminta Abarca, an agent with Keller Williams Realty of Greater Nassau in Garden City until October 2019, whose license expired last year;
- Reza Amiryavari, an agent with Realty Connect USA in Woodbury;
- Nancy Anderson, formerly an agent with Laffey Real Estate in Huntington;
- Dianne Etri, formerly with Coldwell Banker Residential Brokerage in Bellmore, whose license has expired;
- Michele Friedman, an associate broker with Douglas Elliman in Huntington;
- Kevin Geddie, formerly with Douglas Elliman Real Estate in Bridgehampton;
- Maurice Johnson, an agent with Charles Rutenberg Realty in Plainview;
- Diane Leyden, formerly an agent with Laffey Real Estate in Great Neck, whose license has expired;
- Adelheid O’Brien, an agent with Coach Real Estate Associates Inc. in West Islip;
- Francia Perez, formerly with RE/MAX Central Properties in East Meadow;
- Ann Pizaro, an associate broker with Signature Premier Properties, formerly in Syosset, now in Wantagh;
- Donna Rogers, formerly an agent with Douglas Elliman in Plainview, whose license has expired;
- Judi Ross, formerly with Keller Williams Realty Elite in Massapequa Park;
- Himanshoo Sanghvi, also known as Raj Sanghvi, of Century 21 American Homes in Syosset;
- Rosemarie Strippoli, formerly known as Rosemarie Marando, an agent with Coldwell Banker Realty in East Setauket;
- Edwin F. Torres, formerly an associate broker with Charles Rutenberg Realty in Plainview, whose license has expired;
- Joy Tuxson, formerly with RE/MAX Beyond in East Meadow;
- Le-Ann Vicquery, formerly with Keller Williams Realty Homes & Estates in Hauppauge, whose license has expired;
- Cathleen Quinn Nolan, Dianne Scalza and Donald Scanlon, real estate instructors.
The agency has held hearings in the cases involving Anderson, Nolan, Rogers and Vicquery. No decisions have been reached, the agency spokeswoman said Wednesday. The hearings for Strippoli and Etri have been adjourned and new dates are pending, and other agents and instructors have hearings scheduled from this month through June, agency records show.
The Department of State also has proposed denying applications for license renewals by three real estate professionals who appeared in the Newsday project whose licenses have expired: Stephanie Giordano, formerly an associate broker with Charles Rutenberg Realty in Plainview; Gina Minutoli, an associate broker with Century 21 American Homes in East Meadow; and Rosalind Resnick, formerly with Coldwell Banker Residential Brokerage in Great Neck. Giordano, Minutoli and Resnick have appealed the denials; Giordano's hearing will take place in June and Minutoli's and Resnick's hearings are pending, the agency said.
Geddie, Giordano, O'Brien, Resnick and Tuxson declined to comment. Dennis Valet, an attorney for Friedman and Rogers, said they declined to comment.
Scanlon said, in a reference to the fair-housing material that the state requires to be included in such classes, "I covered the material." He declined to comment further.
The state requires real estate agents to receive three hours of fair-housing instruction to renew their licenses. In its complaint, the Department of State said Newsday reported that Scanlon's instruction fell short of the required time.
In its complaint, citing the Newsday article, the agency said Scanlon made statements including, "If you know what the law is, if you know how you can get caught and you decide how far are you going to push, you can decide," and "You get to choose whether you break the law."
The agency said in the complaint that Scanlon made "inappropriate and/or offensive statements during a course of instruction" and that he "was not in compliance with the law and rules relating to real estate instruction."
Scalza referred an inquiry to the Long Island Board of Realtors, which offered the classes taught by the three instructors.
The other agents and instructors did not respond to requests for comment.
Some of the agents named in the Department of State complaints were subpoenaed by the State Senate to give testimony at two public hearings focusing on the Long Island Divided investigation in September. In their testimony, several agents said they strongly oppose discrimination and they did not discriminate on the basis of race. Some said their remarks to testers were taken out of context and called Newsday's conclusions "erroneous," and some said they had learned from the investigation and from additional training, and they have since changed their practices.
A spokeswoman for the Long Island Board of Realtors said in a statement that the three instructors were independent contractors who have been suspended as instructors. All three are former presidents of the board. The spokeswoman said the board has overhauled its fair-housing instruction in consultation with experts, and it "will continue to work at the state and local levels to ensure that fair housing policies are protected and strengthened."
In the Long Island Divided probe, paired testers used hidden cameras to record their interactions with agents. In 40% of the tests, evidence suggested that brokers subjected minority testers to disparate treatment in comparison with white testers. Black testers experienced disparate treatment 49% of the time, compared with 39% for Hispanic and 19% for Asian testers. Newsday relied on two nationally known experts in fair housing standards to evaluate the agents’ actions.
Housing advocates and real estate industry experts say racial discrimination in housing is so well disguised that without paired testing, it's often impossible for victims to know it has occurred. Black, Hispanic and Asian homebuyers and renters often have no way of knowing they have faced housing bias unless they know how white customers with similar qualifications have been treated, experts say.
Testing "has been a way to uncover discrimination for many decades," said Bryan Greene, director of fair housing policy for the National Association of Realtors. "Reports of discrimination don't necessarily tell you how much discrimination is occurring … [since] people don't see how others are being treated."
For example, Bohemia-based nonprofit Long Island Housing Services received a complaint in 2017 from a woman who said she was denied an apartment in Ronkonkoma because she has a child. The group sent testers to check for illegal bias against prospective renters with children. Later, the group also tested for racial bias; the white testers were told an apartment would be available soon but the Black testers were told no units were available, said Marian Reid, the group's deputy director.
Long Island Housing Services filed a complaint in 2017 with the state Division of Human Rights alleging bias based on race, age and familial status and obtained a $5,000 settlement with the landlord in 2019, more than a year and a half after the case was filed.
'It’s just one person’s word... so it’s much harder to prove that case.'Ian Wilder, executive director of Long Island Housing Services
When an individual files a discrimination complaint, "it’s just one person’s word … so it’s much harder to prove that case," said Ian Wilder, executive director of Long Island Housing Services. A fair-housing group’s ability to send in testers, he said, "makes it a much more objective, easy-to-see case."
Enforcement of housing discrimination laws "is so dependent on victims realizing they're a victim," said Elaine Gross, founder and president of Syosset-based ERASE Racism. "The burden is so heavy, both because people don't know they've been discriminated against, but then also because once you put your toe in, you're going to hear, ‘Oh, don't bother, complaints go to the state to die.'"
Regularly endorsed by federal and state courts, paired testing is recognized as the sole viable method for detecting violations of fair housing laws. However, New York State has conducted limited undercover testing for housing bias in recent years.
The state's affordable housing agency, the Division of Homes and Community Renewal, conducted a pilot program in 2016, allocating $65,000 for 88 paired tests of upstate and Westchester landlords. The tests resulted in a $15,000 settlement with a landlord accused of refusing to rent to Black applicants, as well as two cases against landlords accused of discriminating against people with disabilities.
However, the Department of State and the Division of Human Rights, which have the power to discipline real estate agents accused of discrimination, told Newsday in response to a 2018 public information request that they have no records of the agencies conducting any undercover housing bias testing from 2007 through 2018.
With few complaints coming in from members of the public, and with the state conducting limited testing, the Department of State handed down few penalties for housing discrimination in the years before the Newsday investigation was published.
In a review of the department's online records, the most recent license revocation Newsday found in a fair-housing case before Queally Bechand's in 2020 took place in 1997. The records show the department revoked agents’ licenses due to racial bias at least seven times from the 1960s through 1997. During that period, the agency at times conducted its own paired testing, sending staffers out to check for racial bias, bringing complaints and revoking licenses based on the results.
In the more than five-year span from 2016 through March 10, the Department of State received just four housing-bias complaints alleging racial discrimination, apart from those stemming from Long Island Divided; two were closed after the plaintiffs declined to cooperate and two are under investigation, the department spokeswoman said.
In a statement, the department spokeswoman said the agency "vigorously enforces New York’s fair housing laws and has opened a series of investigations tied to allegations of discrimination by real estate professionals on Long Island. We’ve enacted new regulations to combat discriminatory actions across the state, and are working with the Division of Human Rights to advance fair housing cases and bolster campaigns to raise awareness of fair housing protections — to ensure New York’s buyers, renters and sellers have the protections they deserve."
A separate review by Newsday of the most recent available records from the state Division of Human Rights shows that agency reached final decisions in 222 Long Island housing bias cases from 2016 through late 2019. Of the 78 that alleged racial bias, 15 — or 19% — ended in a financial settlement or another benefit for the plaintiff. More than 80% did not. In some of the cases that ended in no benefit to the plaintiff, the division investigated and found no probable cause to believe the defendant broke the law — for example, a landlord abided by consistent standards for financial qualifications such as income or credit. In others, the complaints were dismissed because the plaintiff missed the one-year deadline to file a complaint or the agency lacked jurisdiction, or the complaints were withdrawn.
For all 222 cases, it took an average of nearly 199 days from the day cases were filed until they were resolved, and 27 cases took more than a year to resolve, agency records show.
"I’m not surprised, but it is appalling," Gross, of ERASE Racism, said of the length of time it takes to resolve cases and the number that get resolved in the plaintiffs’ favor. "If they were more aggressive around outreach, and around making people aware of the protections that are due them, and doing the proactive testing, which would bring in other cases, we would see a very different picture."
The Division of Human Rights has a new leader, interim commissioner Johnathan Smith, a longtime civil rights attorney who took over in May. He said the agency is reviewing the outcomes of cases and how long they take to get resolved to see where improvements can be made, and it has launched a public education campaign focused on housing bias.
Last year, the agency announced it had secured more than $600,000 in settlements for victims of all types of housing bias over a period of several months, including a $15,500 settlement for a Schenectady woman who alleged that her landlord subjected her and her son to racial slurs and discrimination because they are Black. In addition to the $5,000 settlement in the Long Island Housing Services case, the division also has resolved a racial bias complaint on Long Island that ended in a $4,000 settlement in 2017 and another that resulted in a $5,500 settlement last year, an agency spokesman said in an email.
"Combating housing discrimination is an incredibly important priority for the agency," said Smith, who previously worked as a senior counsel for civil rights in the federal Department of Justice. "We can and we should evaluate what's happening in those cases [to see] if there are changes or efficiencies or other tweaks we can make to our process to get to a more just outcome."
Smith, who grew up in West Hempstead, said when he read about allegations of racial discrimination by real estate agents in Newsday’s Long Island Divided investigation, he thought of family members and friends who had "recounted very similar experiences" when he lived on Long Island.
'These are challenges that, in the case of Long Island, the area has been dealing with for decades.'Johnathan Smith, interim commissioner of the Division of Human Rights
"To me, the most important fact about it was that, you know, none of those findings are new," he said. "These are challenges that, in the case of Long Island, the area has been dealing with for decades. And it's not just limited to Long Island; these are problems that many, many people are facing across New York State."
Lawmakers earlier this year endorsed paired testing to combat discrimination, and it appears money to pay for it is coming.
After holding hearings spurred by Newsday's investigation, the State Senate in February approved a wide-ranging package of anti-housing-discrimination bills, including a measure that would require the state attorney general to conduct annual undercover testing. Funding would come from increasing the fees the state charges for real estate licenses, hiking the brokers’ license fee by $30 and agents’ license fee by $10 to generate an estimated $1.1 million a year.
In addition, Gov. Andrew M. Cuomo announced on Feb. 25 the state would allocate $250,000 for undercover testing by nonprofit groups.
And last May, state Attorney General Letitia James announced $4.5 million in grants for nonprofits, including Long Island Housing Services, to conduct testing. The grants provide up to about $666,700 for each group over a two-year period, plus a chance at receiving additional funding on a competitive basis. The cost of testing includes not only hiring and training testers, but also employing coordinators who conduct research and analysis and prepare for potential litigation.
State Sen. Kevin Thomas (D-Levittown) said he expects the Assembly to pass the fair-housing measures approved by the Senate, which also include bills that would:
- Remove the current $10,000 limit on punitive damages imposed by the state Division of Human Rights in housing bias cases, and allow the division to impose additional penalties up to $75,000 for multiple offenses;
- Double the Department of State's maximum fine for housing bias, untrustworthiness or incompetency by real estate agents and brokers, to $2,000;
- Make it easier to hold top brokers accountable for fair-housing violations by their agents;
- Double the amount of fair-housing training that agents must undergo to renew their licenses, to six hours every two years.
The legislature passed a law last year giving the state the explicit power to revoke real estate agents' licenses for housing bias. The state also imposed a new requirement that agents inform customers in writing of their fair-housing rights and opened a hotline for reporting allegations.
In Newsday's investigation, the minority undercover testers "didn't know they were being discriminated against" until experts compared the treatment with their white counterparts, Thomas said. "That's how subtle some of these things are, and to have trained professionals going in and basically testing these things out is absolutely essential to make sure that everyone is treated with respect, with dignity."
With Mark Harrington
Types of housing discrimination
Federal, state and local laws prohibit housing discrimination based on characteristics that include race, creed, color, national origin, sexual orientation, gender identity or expression, military status, sex, age, disability, marital status, lawful source of income (such as child support or government subsidies), family status (such as the presence of children) and being the victim of domestic violence.
Where to go for help
For more information or to file a complaint:
- Federal Department of Housing and Urban Development Office of Fair Housing and Equal Opportunity: hud.gov/fairhousing or 212-542-7519
- New York State fair housing hotline: 844-862-8703
- New York Division of Human Rights: dhr.ny.gov/fairhousing or 844-862-8703
- New York Department of State: dos.ny.gov/licensing/complaint.html or 518-474-4429
- Nassau County Human Rights Commission: nassaucountyny.gov/414/Human-Rights-Commission or 516-571-3662
- Suffolk County Human Rights Commission: suffolkcountyny.gov/Departments/Human-Rights-Commission or 631-853-5480