Preview
FILED: SUFFOLK COUNTY CLERK 12/03/2018
08/26/2019 02:07
04:38 PM INDEX NO. 613443/2018
603298/2019
NYSCEF DOC. NO. 25
36 RECEIVED NYSCEF: 12/03/2018
08/26/2019
Falcon Jacobson & Gertler, LLP Tel: (516) 599-0888
ATTORNEYS AT LAW Fax: (516) 599-0889
265 Sunrise Highway, Suite 50
Rockville Centre, NY 11570
November 28, 2017
Barry V. Pittman, Esq.
130 Orinoco Drive
PO Box 463
Brightwaters, New York 11718
VIA OVERNIGHT COURIER
Re: ARC Holdings LLC v. Nailati Holdings LLC
Index No.: 600605/2017
Richard Sapienza, Jr. v. Christopher Mercogliano
Index No.: 619214/2016
Dear Mr. Pittman:
As you know, this office represents plaintiff ARC Holdings LLC and Richard Sapienza, Jr. inthe
above-mentioned actions. I write with reference to the stipulation dated November 17, 2012,
which was filed electronically filed on November 20, 2017 and so-ordered by Justice Garguilo
on November 21, 2017.
As per the terms of paragraph 4 of the stipulation, enclosed please find: (a) as "Exhibit A", a
copy of the closing statement for the sale of 22 Railroad Avenue, Babylon, New York; (b) as
"Exhibit B", staternents of account for the Chase bank account ending in-7W1-for the period o
September 2016 through October 2017; and (e) as "Exhibit C", documentation detailing and
supporting certain transactions identified by you concerning the Nailati Holdings LLC Morgan
Stanley bank accountending in 8636 and ARC Holdings Chase bank account ending in 7171. Ýo
the best of my knowledge, a closing statement has not yet been generated for the sale of 64-66
Park Avenue, Bay Shore, New York, but we will forward same upon receipt.
As indicated by the documents enclosed as "Exhibit C", on or about September 19, 2017,
Christopher Mercogliano, member of Nailati Holdings LLC, assigned Nailati's to ARC
Holdings, among other rights, the right to collect amounts due for rent from its tenants. As you
might be aware, the rent from its tenants was Nailati's sole source of income. Prior to the
assignment, amounts received for rent were used to operate, maintain and develop Nailati's real
estate holdings. As such, after the rents were assigned to ARC, Nailati had no source of capital to
continue its operations.
In connection with Nailati's assignment of rental income to ARC, Mr. Sapienza created the ARC
Holdings Chase bank account ending in 7171. As the bank statements indicate, the account
ending in 7171 was used for the deposit rents received. Consequently, and because the Nailati
FILED: SUFFOLK COUNTY CLERK 12/03/2018
08/26/2019 02:07
04:38 PM INDEX NO. 613443/2018
603298/2019
NYSCEF DOC. NO. 25
36 RECEIVED NYSCEF: 12/03/2018
08/26/2019
Barry Pittman, Esq.
November 28, 2017
Page 2
bank accounts no longer received any which could fund its operations, for convenience, the 7171
account (which received the rental funds) became the operating account for Nailati.
Each of the transactions at issue indicates a transfer of funds from the Nailati bank account
ending in 8636 to the ARC Holdings bank account ending in 7171 (i.e. the account being used
for the operation of Nailati). Specifically:
(i) The October 18, 2016 transfer of $773.33 from Nailati to ARC
Holdings is reflected in the bank statement for the period of
September 30, 2016 through October 31, 2016 for the ARC
Holdings account ending in 7171;
(ii) The April 5, 2017 transfer of $63,597.77 from Nailati to ARC
Holdings is reflected in the bank statement for the period of April 1
through April 28, 2017 for the ARC Holdings account ending in
7171, and reflects a deposit of a portion of the net proceeds from
the sale of 1 Park Place into the account which was being used to
fund Nailati's continued operation and pay itsexpenses.
(ii) April 6, 2017 transfer of $6,800.00 from Nailati to ARC Holdings
is reflected in the bank statement for the period of April 1 through
April 28, 2017 for the ARC Holdings account ending in 7171, and
reflects a deposit of a portion of the net proceeds from the sale of 1
Park Place into the account which was being used to fund Nailati's
continued operation and pay its expenses.
(iv) The. July 25, 2017 transfer of $220,460.90 from Nailati to ARC
IIoldings is reflected in the bank statement for the period of July 1
through July 31, 2017 for the ARC Holdings account ending in
7171, and reflects a deposit of the net proceeds from the sale of 22
Railroad Avenue into the account which was being used to fund
Nailati's continued operation and pay its expenses.
D"
Moreover, as the documents enclosed as "Exhibit indicate, Mr. Sapienza (or his entities)
funded Nailati's continued operation with $275,000.00 in additional funds. Among other things,
these amounts were used to pay over $131,000.00 in tax arrears, monthly payments for interest
due under the mortgages, regular payments to vendors in connection with the maintenance of the
properties, and to make payment to professionals in connection with ongoing operations.
When Nailati accrued sufficient funds, by sale of the properties or otherwise, the principal
amounts Mr. Sapienza loaned to Nailati were repaid.
FILED: SUFFOLK COUNTY CLERK 12/03/2018
08/26/2019 02:07
04:38 PM INDEX NO. 613443/2018
603298/2019
NYSCEF DOC. NO. 25
36 RECEIVED NYSCEF: 12/03/2018
08/26/2019
Barry Pittman, Esq.
November 28, 2017
Page 3
I believe that the enclosed documents should, per the so-ordered stipulation, satisfy your inquiry.
Additionally, enclosed is a copy of the consent form that Mr. Mercogliano must execute in
connection with the sale of 64-66 Park Avenue, which I first sent to your attention on November
17, 2017. In accordance with paragraphs 2 and 3 of the so-ordered stipulation, please have Mr.
Mercogliano execute the coliselit as soon as possible, and return the original signed consent form
to my office.
Should you wish to discuss this matter further, please do not hesitate to contact my office.
Very truly yours,
Paul M. O'Brien
PMO/
FILED: SUFFOLK COUNTY CLERK 12/03/2018
08/26/2019 02:07
04:38 PM INDEX NO. 613443/2018
603298/2019
NYSCEF DOC. NO. 25
36 RECEIVED NYSCEF: 12/03/2018
08/26/2019
EXHIBIT A
FILED: SUFFOLK COUNTY CLERK 12/03/2018
08/26/2019 02:07
04:38 PM INDEX NO. 613443/2018
603298/2019
NYSCEF DOC. NO. 25
36 RECEIVED NYSCEF: 12/03/2018
08/26/2019
Cardino & Cardino, Esqs. Nailati Holdings
825 Merrick Road Fife# 16532/16 ts
Copiague, NY 11726
(631) 264-1200
Seller: NailatiHoldings,LLC
Atty: Frank Cardino,Esq.
Purchaser: RailroadAve Babylon, LLC
Atty: Christopher Ring,Esq.
TitleCompany: AllstateAbstract
Title#: S91819-13
TitleCloser:
Closing Date: 20-Jul-17
Adj. as of: 20-Jul-17
Closing Place: Cardino & Cardino, PLLC
Bank Rep:
Premises: 22 RailroadAve., Babylon,NY
CREDIT TO
PURCHASERS SELLERS
Purchase Price: $1,250,000.00
Down Payment: 562,500.00
Tax Adj (County): 11,614.10
Tax Adj (School):
Tax Adj (Village): 1,975.31
Rent Unit A: 385.00
Rent Unit B: 319.00
Rent Unit C (plus$900.00 security): 1,230.00
Rent Unit D: 498.67
Rent Unit E (plus$1,400.00security; 1.913.33
Rent Unit F: 412.50
Rent Unit G: 440,00
Environmental Credit: 10,000.00
TOTALS S77,698.50 $1,263,589.40
SellerCredit: $1,263,589.40
Purchaser Credu: /7.698.50
BALANCE DUE: $1.185,890.90
PAID AS FOLLOWS:
Bank Net Proceeds: $1,185,890.90
Certified/Bank Checks:
Certified/Bank Checks:
Personal Check:
TOTAL: $1,185,890.90
SELLER'S DISBURSEMENTS
ADJ. PAID TO PURCHASER OR MISC:
RE Tax Reimbursement: -513,589.40
T. Tax Adj.: 0.00
Rent/Security: 5,198.50
Disclosure: 10,000.00
Termite Treatment:
CardinoClosingStatement
page 1 of 2
FILED: SUFFOLK COUNTY CLERK 12/03/2018
08/26/2019 02:07
04:38 PM INDEX NO. 613443/2018
603298/2019
NYSCEF DOC. NO. 25
36 RECEIVED NYSCEF: 12/03/2018
08/26/2019
Misc:
TOTAL ADJUSTMENTS: $1,609.10
LEGAL FEE: $4,500.00
OUTSTANDING MORTGAGE COSTS:
Principal
Balance: $955,000.00
Escrow:
Sat/MtgPreparation:
Sat/Mtg Recording: 660.00
Mtg Interest:
Overnight Payoff Charge:
Pickup Fee: 250.00
Misc: 20.00
MORTGAGE PAYOFF TOTAL: $955,930.00
TITLE COMPANY CHARGES:
NYS Transfer Tax: $5,000.00
Local TransferTax:
Unpaid Taxes:
Misc:
TOTAL TITLE CHARGES: $5,000.00
RE BRKR COMMISSION: 5.0% $62,500.00
TOTAL SELLER DISBURSEMEI $1,029,539.10
BREAKDOWN OF NET PROCEEDS:
Bank Net Proceeds: $1,185,890.90
(-)Allstate
Abstract 5,680.00
(-)Title
Closer t/b/d 250.00
(-)ArcHoldings LLC 955,000.00
(-)Advantage + RE 37,500.00
(-)AllianceReal EstateCorp. 25,000.00
(-)Nailati
Holdings LLC 162,460.90
= $0.00
(-)
ESCROW ACCOUNT:
$62,500.00
(-)Cardino& Cardino 4,500.00
(-)Nailati
Holdings LLC 58,000.00
(-)
(-)
= $0.00
(-)
SELLER'S NET NET:
Purchase Price: $1,250,000.00
(-)TotalDisbursements: 1,029,539.10
(=)Walk-away Monies: $220,460.90
PAID as follows:
Bank Check: 162,460.90
Escrow (held):
Escrow: 58,000.00
Personal Check:
Bank Check:
TOTAL: $220,460.90
CardinoClosing Statement
page 2 of 2
FILED: SUFFOLK COUNTY CLERK 12/03/2018
08/26/2019 02:07
04:38 PM INDEX NO. 613443/2018
603298/2019
NYSCEF DOC. NO. 25
36 RECEIVED NYSCEF: 12/03/2018
08/26/2019
EXHIBIT B
FILED: SUFFOLK COUNTY CLERK 12/03/2018
08/26/2019 02:07
04:38 PM INDEX NO. 613443/2018
603298/2019
NYSCEF DOC. NO. 25
36 RECEIVED NYSCEF: 12/03/2018
08/26/2019
CHA5E O Capta-r;bar 10, 2016 through September
30, 2016
JPMorgan Chase Bank, N.A.
AccountNumber: REDAC I EU 171
P O Box 659754
San Antonio,
TX 78265 -9754
CUSTOMER SERVICE INFORMATION
Web site: Chase.com
Service Center: 1-800-242-7338
00156189 DRE 802 142 27516 i4ivivYivisiviviviiYT
1 00000000069 0000 Deaf and Hard ofHearing: 1-800-242-7383
ARC HOLDINGS LLC Para Espanol: 1-888-622-4273
27 KEEL International
Calls: 1-713-262-1679
EAST ISLIP NY 11730
We're making changes to our ATMs
Here's what you can expect:
• We willnotcharge you a feewhen you make a cash deposit at anATM. This means:
o We willnotinclude cash deposits made at ourATMs to thetotalcash you can deposit before you are
charged a feeforcash deposits, and
o Even afteryou exceed the we
total, will
not charge you a fee forcash deposited at an ATM.
• We're ourATMs and when you use one that'supdated:
updating
o It will
giveyou access to all of
your linked business checking and savings accounts.
o If a cardhciderwithinyour business has more thanone Chase business debitor ATM card,they'll
have a
dailycardhalder withdrawal limitthatappliesacross allcards held by thatcardhcider.The maximum daily
cardhcider withdrawal is equal
limit to thehighestdailycard withdrawal limit
of any card thecardholder has
with us.Withdrawe!s you make at anyATM other than a StaffedATM count toward your dailycardha:der
withdrawal regardiess
limit, ofthe card you are using.
Also, Neverriber
starting 21, 2016, you'llno longerbe able to use pêrscrialidentification
toget a code from a branch
employee so you can access your accounts at an ATM in a branch.
We've revisedthe Deposit Account Agreement to reflect
these changes. You can get thelatestDeposit Account Agrescriêrit
on chase.com, at a branch orby request when you callus.The partsof theDeposit Account AgrGGrñéñt thatare changing
willbe in theChange in Terms section.
We continue tolook forways togive you more at the
flexibility ATM, so you may be hearing from us again about additicrial
changes. If youhave questions, please callthenumber on your statement.
Chase Total Business Checking
CHECKING SUMMARY|
INSTANCEs AMOuNT
Beginning Balance $0.00
Deposits and Additions 1 248.00
ElectronicWithdrawals 2 - 196.16
Ending Balance 3 $51.84
Page1 of 2
FILED: SUFFOLK COUNTY CLERK 12/03/2018
08/26/2019 02:07
04:38 PM INDEX NO. 613443/2018
603298/2019
NYSCEF DOC. NO. 25
36 RECEIVED NYSCEF: 12/03/2018
08/26/2019
CHA5EO September 10, 2016 through September 30, 2016
AccountNumber: REDACTED 7171
DEPOSiTS AND ADDITIONSI
DATE DESCRIPTION AMOUNT
09/12 Deposit 1630940347 $248.00
Total Deposits and Additions $248.00
ELECTRONIC WITHDRAWALS
DATE DESCRIPTION AMOUNT
09/23 09/22 Online Payment 5680028458 To Winter Bros $190.42
09/23 09/22 Online Payrnent 5680043509 To Naticñaiüiid 5.74
Total Electronic Withdrawa!s $196.16
DAILY ENDING BALANCE
DATE AMOUNT
09/12 $248.00
09/23 51.84
[SERVICE CHARGE SUMMARY
TRANSACTIONS FOR SERVICEFEE CALCULATION NUMBER OF TRANSACTIONS
Checks Paid / Debits 0
Deposits / Credits 1
Deposited Items 0
Transaction Total 1
SERVICE FEE CALCULATION AMOUNT
Service Fee $0.00
Service Fee Credit $0.00
Net Service Fee $0.00
Excessive Transactiva Fees (Above 200) $0.00
Total Service Fees $0.00
IN CASE OF ERRORS OR QUESTIONS ABOUT YOUR ELECTRONIC FUNDS TRANSFERS: Call or write us at the phone number or address
(non-personal
on the front of this statement accountscontact Customer Service) if you think your statement
or receipt is incorrect or if you need
more information or receipt.
about a transfer listed on the statement We must hear from you no later than 60 days after we sent you the FIRST
statementon which the problem or error appeared.
Be prepared to give us the following information:
• Your name and account
number
• The dollar amount of the suspected
error
• of the error or transfer you are unsure of, why you believe it is an error, or why you need more information.
A description
We will investigate
your complaint . if we take more than 10 business days (or 20 business days for new
and will correct any error promptl
accounts)to do this, we will credit your account hink is in error so that you will have use of the money during the time it takes
for the amount you
our investigation.
us to complete
IN CASE OF ERRORS OR QUESTIONS ABOUT NON-ELECTROiiiG TRANSACTIONS: Contact the bank !=med|‡s|y
if your statement
is
or if
incorrect ou need more information
about any non-electronic (checks or de
transactions If any such error appears,
osits) on this statement.
you must noti y the bank in writing no later than 30 days after the statement
was made availa For more complete
le to you. see
details, the
Account Rules and Regulations
or other applicable
accountagreement that governs your account.
PMorgan Chase Bank, N.A. Member FDIC
Page2 of 2
FILED:
FILED: SUFFOLK
SUFFOLK COUNTY
COUNTY CLERK
CLERK 08/26/2019
12/03/2018 04:38
02:07 PM
PM|
INDEX
INDEX NO.
NO. 603298/2019
6134 43/2018
NYSCEF
NYSCEF DOC.
DOC. NO.
NO. 36
25 RECEIVED
RECEIVED NYSCEF:
NYSCEF: 08/26/2019
12/03/2018
CHA5E October O1, 2016 through
October 31, 2016
JPMorgan Chase Bank, N.A.
AccountNumber RE DA CTE D t 171
P O Box 659754
San Antonio,
TX 78265-9754
CUSTOMER SERVICE INFORMATION
Web site: Chase.com
Service Center: 1-800-242-7338
00040997 DRE 802 14430616 MMMET!MNNNNV
T 1 00000000069 0000 Deaf and Hard ofHearing: 1-800-242-7383
ARC HOLDINGS LLC Para Esp::no!: 1-888-622-4273
27 KEEL !ntemetionalCalls: 1-713-262-1679
EAST ISLIP NY 11730
Chase TotalBusiness Checking
CHECKING SUMMARY|
INsTANCES AMOUNT
Beginning Balance $51.84
Deposits and Additions 5 225,091.74
Checks Paid 6 - 13,186.00
ElectronicWithdrawals 19 - 23,760.21
Fees 2 - 15.65
Ending Balance 32 $188,181.72
DEPOSITS AND ADDITIONS
DATE DESCRIPTION AMOUNT
10/03 Deposit 1631229859 $14,288.41
10/04 Deposit 1600843555 5,080.00
10/07 Deposit 1600843554 4,950.00
10/17 Deposit 773.33
10/28 Chips Credit Via:Citibank N.AJ0008 B/O: Arc Consultants LLC East IslipNY 117302920 200,000.00
Ref: Nbnf=Arc Holdings LLC East NY
Islip, 11730/Ac-000000008811
East IslipNY Morgan Stanley,Dean WitterNew Yor K NY Ssn:
Trn:
Total Deposits and Additions $225,091.74
CHECKS PAID]
DATE
CHECK No. DESCRIPTION PAID AMOUNT
101 ^ 10/14 $736,00
102 ^ 10/12 575.00
103 ^ 10/11 2,675.00
104 ^ 10/11 3,000.00
105 ^ 10/11 1,425,00
106 ^ 10/11 4,775.00
Total Checks Paid $13,186.00
If yousee a description Checks
in the Paid section,it means thatwe iscsived ei-- ---:-3 information
about the
only check,
not theoriginalor an image of thecheck. As a result,we're notable toretum thecheck to you or show you an image.
^ An image of this
check be availablefor you to viewon Chase.com.
may
Page1 of 4
FILED: SUFFOLK COUNTY CLERK 12/03/2018
08/26/2019 02:07
04:38 PM INDEX NO. 613443/2018
603298/2019
NYSCEF DOC. NO. 25
36 RECEIVED NYSCEF: 12/03/2018
08/26/2019
CHA5E G October 01, 2016 through October 31, 2016
AccountNumber: -tEDACTED 7171
5[ECTRONIC WITHDRAWALS
DATE DESCRIPTION AMOUNT
10/11 10/08 Online Payment 5717591766 To Pseg Long Island $49.99
10/11 10/08 Online Payment 5717591845 To Pseg Long Island 270.59
10/11 10/08 Online Payment 5717614560 To Pseg Long Island 229.75
10/11 10/08 Online Payment 5717623777 To Psegli 419.68
10/11 10/08 Online Payment 5717643015 To Suffolk County Water Aüticiity 225.73
10/11 10/08 Online Payment 5717643022 To Naticaâ!grid 91.98
10/11 10/08 Online Payment 5717643010 To SuffolkCounty Water Authority 59.04
10/11 10/08 Online Payment 5717643033 To SuffolkCounty Water Authority 34.26
10/11 10/08 Online Payment 5718262873 To Winter Bros 190.42
10/11 10/09 Online Payment 5719227118 To Richard Sapienza 275.64
10/11 10/09 Online Payment 5719272441 To John F. Capobianco,Architect 5,000.00
10/11 10/09 Online Payment 5719273942 To Lisa M. Pace 2,500.00
10/13 10/13 Online Payment 5717591763 To Pseg Long Island 79.94
10/18 10/18 Online Payment 5717614571 To Pseg Long Island 284.92
10/20 10/20 Online Payment 5741772373 To Bohler Enginerring 900.00
10/27 10/27 Online Payment 5757371170 To SitBack & Relax, Inc. 60.00
10/27 10/27 OnlinePayment 5757371169 To SitBack & Relax, Inc. 30.00
10/31 10/29 OnlinePayment 5759103055 To John F. Capobianco, Architect 10,793.78
10/31 10/29 OnlinePayment 5759094352 To Lisa M Pace 2,264.49
Total Electronic Withdrewals $23,760.21
[
FEES
DATE DESCRIPTION AMOUNT
_10/28 Domestic | cüm|ñg Wire Fee $15.00
10/31 Cash Deposit :mmadiãio 0.65
Total Fees $15.65
DAILY ENDING BALANCE
DATE AMOUNT DATE AMOUNT DATE AMoUNT
10/03 $14,340.25 10/13 2,493.23 10/20 1,345.64
10/04 19,420.25 10/14 1,757.23 10/27 1,255.64
10/07 24,370.25 10/17 2,530.56 10/28 201,240.64
10/11 3,148.17 10/18 2,245.64 10/31 188,181.72
10/12 2,573.17
SERVICE CHARGE SUMMARY
TRANSACTIONs FOR SERVicE FEE CALCULATION NUMBEROF TRANsACTIONS
Checks Paid /Debits 6
Deposits / Credits 5
Deposited Items 12
Transaction Total 23
SERVICE FEE CALCULATION AMOUNT
Service Fee $0.00
Service Fee Credit $0.00
Net Service Fee $0.00
Excessive Transaction Fees (Above 200) $0.00
Page2 of4
FILED: SUFFOLK COUNTY CLERK 12/03/2018
08/26/2019 02:07
04:38 PM INDEX NO. 613443/2018
603298/2019
NYSCEF DOC. NO. 25
36 RECEIVED NYSCEF: 12/03/2018
08/26/2019
CHA5E G October 01, 2016 through Oct
Preview
FILED: SUFFOLK COUNTY CLERK 12/03/2018 08/26/2019 02:07 04:38 PM INDEX NO. 613443/2018 603298/2019 NYSCEF DOC. NO. 25 36 RECEIVED NYSCEF: 12/03/2018 08/26/2019 Falcon Jacobson & Gertler, LLP Tel: (516) 599-0888 ATTORNEYS AT LAW Fax: (516) 599-0889 265 Sunrise Highway, Suite 50 Rockville Centre, NY 11570 November 28, 2017 Barry V. Pittman, Esq. 130 Orinoco Drive PO Box 463 Brightwaters, New York 11718 VIA OVERNIGHT COURIER Re: ARC Holdings LLC v. Nailati Holdings LLC Index No.: 600605/2017 Richard Sapienza, Jr. v. Christopher Mercogliano Index No.: 619214/2016 Dear Mr. Pittman: As you know, this office represents plaintiff ARC Holdings LLC and Richard Sapienza, Jr. inthe above-mentioned actions. I write with reference to the stipulation dated November 17, 2012, which was filed electronically filed on November 20, 2017 and so-ordered by Justice Garguilo on November 21, 2017. As per the terms of paragraph 4 of the stipulation, enclosed please find: (a) as "Exhibit A", a copy of the closing statement for the sale of 22 Railroad Avenue, Babylon, New York; (b) as "Exhibit B", staternents of account for the Chase bank account ending in-7W1-for the period o September 2016 through October 2017; and (e) as "Exhibit C", documentation detailing and supporting certain transactions identified by you concerning the Nailati Holdings LLC Morgan Stanley bank accountending in 8636 and ARC Holdings Chase bank account ending in 7171. Ýo the best of my knowledge, a closing statement has not yet been generated for the sale of 64-66 Park Avenue, Bay Shore, New York, but we will forward same upon receipt. As indicated by the documents enclosed as "Exhibit C", on or about September 19, 2017, Christopher Mercogliano, member of Nailati Holdings LLC, assigned Nailati's to ARC Holdings, among other rights, the right to collect amounts due for rent from its tenants. As you might be aware, the rent from its tenants was Nailati's sole source of income. Prior to the assignment, amounts received for rent were used to operate, maintain and develop Nailati's real estate holdings. As such, after the rents were assigned to ARC, Nailati had no source of capital to continue its operations. In connection with Nailati's assignment of rental income to ARC, Mr. Sapienza created the ARC Holdings Chase bank account ending in 7171. As the bank statements indicate, the account ending in 7171 was used for the deposit rents received. Consequently, and because the Nailati FILED: SUFFOLK COUNTY CLERK 12/03/2018 08/26/2019 02:07 04:38 PM INDEX NO. 613443/2018 603298/2019 NYSCEF DOC. NO. 25 36 RECEIVED NYSCEF: 12/03/2018 08/26/2019 Barry Pittman, Esq. November 28, 2017 Page 2 bank accounts no longer received any which could fund its operations, for convenience, the 7171 account (which received the rental funds) became the operating account for Nailati. Each of the transactions at issue indicates a transfer of funds from the Nailati bank account ending in 8636 to the ARC Holdings bank account ending in 7171 (i.e. the account being used for the operation of Nailati). Specifically: (i) The October 18, 2016 transfer of $773.33 from Nailati to ARC Holdings is reflected in the bank statement for the period of September 30, 2016 through October 31, 2016 for the ARC Holdings account ending in 7171; (ii) The April 5, 2017 transfer of $63,597.77 from Nailati to ARC Holdings is reflected in the bank statement for the period of April 1 through April 28, 2017 for the ARC Holdings account ending in 7171, and reflects a deposit of a portion of the net proceeds from the sale of 1 Park Place into the account which was being used to fund Nailati's continued operation and pay itsexpenses. (ii) April 6, 2017 transfer of $6,800.00 from Nailati to ARC Holdings is reflected in the bank statement for the period of April 1 through April 28, 2017 for the ARC Holdings account ending in 7171, and reflects a deposit of a portion of the net proceeds from the sale of 1 Park Place into the account which was being used to fund Nailati's continued operation and pay its expenses. (iv) The. July 25, 2017 transfer of $220,460.90 from Nailati to ARC IIoldings is reflected in the bank statement for the period of July 1 through July 31, 2017 for the ARC Holdings account ending in 7171, and reflects a deposit of the net proceeds from the sale of 22 Railroad Avenue into the account which was being used to fund Nailati's continued operation and pay its expenses. D" Moreover, as the documents enclosed as "Exhibit indicate, Mr. Sapienza (or his entities) funded Nailati's continued operation with $275,000.00 in additional funds. Among other things, these amounts were used to pay over $131,000.00 in tax arrears, monthly payments for interest due under the mortgages, regular payments to vendors in connection with the maintenance of the properties, and to make payment to professionals in connection with ongoing operations. When Nailati accrued sufficient funds, by sale of the properties or otherwise, the principal amounts Mr. Sapienza loaned to Nailati were repaid. FILED: SUFFOLK COUNTY CLERK 12/03/2018 08/26/2019 02:07 04:38 PM INDEX NO. 613443/2018 603298/2019 NYSCEF DOC. NO. 25 36 RECEIVED NYSCEF: 12/03/2018 08/26/2019 Barry Pittman, Esq. November 28, 2017 Page 3 I believe that the enclosed documents should, per the so-ordered stipulation, satisfy your inquiry. Additionally, enclosed is a copy of the consent form that Mr. Mercogliano must execute in connection with the sale of 64-66 Park Avenue, which I first sent to your attention on November 17, 2017. In accordance with paragraphs 2 and 3 of the so-ordered stipulation, please have Mr. Mercogliano execute the coliselit as soon as possible, and return the original signed consent form to my office. Should you wish to discuss this matter further, please do not hesitate to contact my office. Very truly yours, Paul M. O'Brien PMO/ FILED: SUFFOLK COUNTY CLERK 12/03/2018 08/26/2019 02:07 04:38 PM INDEX NO. 613443/2018 603298/2019 NYSCEF DOC. NO. 25 36 RECEIVED NYSCEF: 12/03/2018 08/26/2019 EXHIBIT A FILED: SUFFOLK COUNTY CLERK 12/03/2018 08/26/2019 02:07 04:38 PM INDEX NO. 613443/2018 603298/2019 NYSCEF DOC. NO. 25 36 RECEIVED NYSCEF: 12/03/2018 08/26/2019 Cardino & Cardino, Esqs. Nailati Holdings 825 Merrick Road Fife# 16532/16 ts Copiague, NY 11726 (631) 264-1200 Seller: NailatiHoldings,LLC Atty: Frank Cardino,Esq. Purchaser: RailroadAve Babylon, LLC Atty: Christopher Ring,Esq. TitleCompany: AllstateAbstract Title#: S91819-13 TitleCloser: Closing Date: 20-Jul-17 Adj. as of: 20-Jul-17 Closing Place: Cardino & Cardino, PLLC Bank Rep: Premises: 22 RailroadAve., Babylon,NY CREDIT TO PURCHASERS SELLERS Purchase Price: $1,250,000.00 Down Payment: 562,500.00 Tax Adj (County): 11,614.10 Tax Adj (School): Tax Adj (Village): 1,975.31 Rent Unit A: 385.00 Rent Unit B: 319.00 Rent Unit C (plus$900.00 security): 1,230.00 Rent Unit D: 498.67 Rent Unit E (plus$1,400.00security; 1.913.33 Rent Unit F: 412.50 Rent Unit G: 440,00 Environmental Credit: 10,000.00 TOTALS S77,698.50 $1,263,589.40 SellerCredit: $1,263,589.40 Purchaser Credu: /7.698.50 BALANCE DUE: $1.185,890.90 PAID AS FOLLOWS: Bank Net Proceeds: $1,185,890.90 Certified/Bank Checks: Certified/Bank Checks: Personal Check: TOTAL: $1,185,890.90 SELLER'S DISBURSEMENTS ADJ. PAID TO PURCHASER OR MISC: RE Tax Reimbursement: -513,589.40 T. Tax Adj.: 0.00 Rent/Security: 5,198.50 Disclosure: 10,000.00 Termite Treatment: CardinoClosingStatement page 1 of 2 FILED: SUFFOLK COUNTY CLERK 12/03/2018 08/26/2019 02:07 04:38 PM INDEX NO. 613443/2018 603298/2019 NYSCEF DOC. NO. 25 36 RECEIVED NYSCEF: 12/03/2018 08/26/2019 Misc: TOTAL ADJUSTMENTS: $1,609.10 LEGAL FEE: $4,500.00 OUTSTANDING MORTGAGE COSTS: Principal Balance: $955,000.00 Escrow: Sat/MtgPreparation: Sat/Mtg Recording: 660.00 Mtg Interest: Overnight Payoff Charge: Pickup Fee: 250.00 Misc: 20.00 MORTGAGE PAYOFF TOTAL: $955,930.00 TITLE COMPANY CHARGES: NYS Transfer Tax: $5,000.00 Local TransferTax: Unpaid Taxes: Misc: TOTAL TITLE CHARGES: $5,000.00 RE BRKR COMMISSION: 5.0% $62,500.00 TOTAL SELLER DISBURSEMEI $1,029,539.10 BREAKDOWN OF NET PROCEEDS: Bank Net Proceeds: $1,185,890.90 (-)Allstate Abstract 5,680.00 (-)Title Closer t/b/d 250.00 (-)ArcHoldings LLC 955,000.00 (-)Advantage + RE 37,500.00 (-)AllianceReal EstateCorp. 25,000.00 (-)Nailati Holdings LLC 162,460.90 = $0.00 (-) ESCROW ACCOUNT: $62,500.00 (-)Cardino& Cardino 4,500.00 (-)Nailati Holdings LLC 58,000.00 (-) (-) = $0.00 (-) SELLER'S NET NET: Purchase Price: $1,250,000.00 (-)TotalDisbursements: 1,029,539.10 (=)Walk-away Monies: $220,460.90 PAID as follows: Bank Check: 162,460.90 Escrow (held): Escrow: 58,000.00 Personal Check: Bank Check: TOTAL: $220,460.90 CardinoClosing Statement page 2 of 2 FILED: SUFFOLK COUNTY CLERK 12/03/2018 08/26/2019 02:07 04:38 PM INDEX NO. 613443/2018 603298/2019 NYSCEF DOC. NO. 25 36 RECEIVED NYSCEF: 12/03/2018 08/26/2019 EXHIBIT B FILED: SUFFOLK COUNTY CLERK 12/03/2018 08/26/2019 02:07 04:38 PM INDEX NO. 613443/2018 603298/2019 NYSCEF DOC. NO. 25 36 RECEIVED NYSCEF: 12/03/2018 08/26/2019 CHA5E O Capta-r;bar 10, 2016 through September 30, 2016 JPMorgan Chase Bank, N.A. AccountNumber: REDAC I EU 171 P O Box 659754 San Antonio, TX 78265 -9754 CUSTOMER SERVICE INFORMATION Web site: Chase.com Service Center: 1-800-242-7338 00156189 DRE 802 142 27516 i4ivivYivisiviviviiYT 1 00000000069 0000 Deaf and Hard ofHearing: 1-800-242-7383 ARC HOLDINGS LLC Para Espanol: 1-888-622-4273 27 KEEL International Calls: 1-713-262-1679 EAST ISLIP NY 11730 We're making changes to our ATMs Here's what you can expect: • We willnotcharge you a feewhen you make a cash deposit at anATM. This means: o We willnotinclude cash deposits made at ourATMs to thetotalcash you can deposit before you are charged a feeforcash deposits, and o Even afteryou exceed the we total, will not charge you a fee forcash deposited at an ATM. • We're ourATMs and when you use one that'supdated: updating o It will giveyou access to all of your linked business checking and savings accounts. o If a cardhciderwithinyour business has more thanone Chase business debitor ATM card,they'll have a dailycardhalder withdrawal limitthatappliesacross allcards held by thatcardhcider.The maximum daily cardhcider withdrawal is equal limit to thehighestdailycard withdrawal limit of any card thecardholder has with us.Withdrawe!s you make at anyATM other than a StaffedATM count toward your dailycardha:der withdrawal regardiess limit, ofthe card you are using. Also, Neverriber starting 21, 2016, you'llno longerbe able to use pêrscrialidentification toget a code from a branch employee so you can access your accounts at an ATM in a branch. We've revisedthe Deposit Account Agreement to reflect these changes. You can get thelatestDeposit Account Agrescriêrit on chase.com, at a branch orby request when you callus.The partsof theDeposit Account AgrGGrñéñt thatare changing willbe in theChange in Terms section. We continue tolook forways togive you more at the flexibility ATM, so you may be hearing from us again about additicrial changes. If youhave questions, please callthenumber on your statement. Chase Total Business Checking CHECKING SUMMARY| INSTANCEs AMOuNT Beginning Balance $0.00 Deposits and Additions 1 248.00 ElectronicWithdrawals 2 - 196.16 Ending Balance 3 $51.84 Page1 of 2 FILED: SUFFOLK COUNTY CLERK 12/03/2018 08/26/2019 02:07 04:38 PM INDEX NO. 613443/2018 603298/2019 NYSCEF DOC. NO. 25 36 RECEIVED NYSCEF: 12/03/2018 08/26/2019 CHA5EO September 10, 2016 through September 30, 2016 AccountNumber: REDACTED 7171 DEPOSiTS AND ADDITIONSI DATE DESCRIPTION AMOUNT 09/12 Deposit 1630940347 $248.00 Total Deposits and Additions $248.00 ELECTRONIC WITHDRAWALS DATE DESCRIPTION AMOUNT 09/23 09/22 Online Payment 5680028458 To Winter Bros $190.42 09/23 09/22 Online Payrnent 5680043509 To Naticñaiüiid 5.74 Total Electronic Withdrawa!s $196.16 DAILY ENDING BALANCE DATE AMOUNT 09/12 $248.00 09/23 51.84 [SERVICE CHARGE SUMMARY TRANSACTIONS FOR SERVICEFEE CALCULATION NUMBER OF TRANSACTIONS Checks Paid / Debits 0 Deposits / Credits 1 Deposited Items 0 Transaction Total 1 SERVICE FEE CALCULATION AMOUNT Service Fee $0.00 Service Fee Credit $0.00 Net Service Fee $0.00 Excessive Transactiva Fees (Above 200) $0.00 Total Service Fees $0.00 IN CASE OF ERRORS OR QUESTIONS ABOUT YOUR ELECTRONIC FUNDS TRANSFERS: Call or write us at the phone number or address (non-personal on the front of this statement accountscontact Customer Service) if you think your statement or receipt is incorrect or if you need more information or receipt. about a transfer listed on the statement We must hear from you no later than 60 days after we sent you the FIRST statementon which the problem or error appeared. Be prepared to give us the following information: • Your name and account number • The dollar amount of the suspected error • of the error or transfer you are unsure of, why you believe it is an error, or why you need more information. A description We will investigate your complaint . if we take more than 10 business days (or 20 business days for new and will correct any error promptl accounts)to do this, we will credit your account hink is in error so that you will have use of the money during the time it takes for the amount you our investigation. us to complete IN CASE OF ERRORS OR QUESTIONS ABOUT NON-ELECTROiiiG TRANSACTIONS: Contact the bank !=med|‡s|y if your statement is or if incorrect ou need more information about any non-electronic (checks or de transactions If any such error appears, osits) on this statement. you must noti y the bank in writing no later than 30 days after the statement was made availa For more complete le to you. see details, the Account Rules and Regulations or other applicable accountagreement that governs your account. PMorgan Chase Bank, N.A. Member FDIC Page2 of 2 FILED: FILED: SUFFOLK SUFFOLK COUNTY COUNTY CLERK CLERK 08/26/2019 12/03/2018 04:38 02:07 PM PM| INDEX INDEX NO. NO. 603298/2019 6134 43/2018 NYSCEF NYSCEF DOC. DOC. NO. NO. 36 25 RECEIVED RECEIVED NYSCEF: NYSCEF: 08/26/2019 12/03/2018 CHA5E October O1, 2016 through October 31, 2016 JPMorgan Chase Bank, N.A. AccountNumber RE DA CTE D t 171 P O Box 659754 San Antonio, TX 78265-9754 CUSTOMER SERVICE INFORMATION Web site: Chase.com Service Center: 1-800-242-7338 00040997 DRE 802 14430616 MMMET!MNNNNV T 1 00000000069 0000 Deaf and Hard ofHearing: 1-800-242-7383 ARC HOLDINGS LLC Para Esp::no!: 1-888-622-4273 27 KEEL !ntemetionalCalls: 1-713-262-1679 EAST ISLIP NY 11730 Chase TotalBusiness Checking CHECKING SUMMARY| INsTANCES AMOUNT Beginning Balance $51.84 Deposits and Additions 5 225,091.74 Checks Paid 6 - 13,186.00 ElectronicWithdrawals 19 - 23,760.21 Fees 2 - 15.65 Ending Balance 32 $188,181.72 DEPOSITS AND ADDITIONS DATE DESCRIPTION AMOUNT 10/03 Deposit 1631229859 $14,288.41 10/04 Deposit 1600843555 5,080.00 10/07 Deposit 1600843554 4,950.00 10/17 Deposit 773.33 10/28 Chips Credit Via:Citibank N.AJ0008 B/O: Arc Consultants LLC East IslipNY 117302920 200,000.00 Ref: Nbnf=Arc Holdings LLC East NY Islip, 11730/Ac-000000008811 East IslipNY Morgan Stanley,Dean WitterNew Yor K NY Ssn: Trn: Total Deposits and Additions $225,091.74 CHECKS PAID] DATE CHECK No. DESCRIPTION PAID AMOUNT 101 ^ 10/14 $736,00 102 ^ 10/12 575.00 103 ^ 10/11 2,675.00 104 ^ 10/11 3,000.00 105 ^ 10/11 1,425,00 106 ^ 10/11 4,775.00 Total Checks Paid $13,186.00 If yousee a description Checks in the Paid section,it means thatwe iscsived ei-- ---:-3 information about the only check, not theoriginalor an image of thecheck. As a result,we're notable toretum thecheck to you or show you an image. ^ An image of this check be availablefor you to viewon Chase.com. may Page1 of 4 FILED: SUFFOLK COUNTY CLERK 12/03/2018 08/26/2019 02:07 04:38 PM INDEX NO. 613443/2018 603298/2019 NYSCEF DOC. NO. 25 36 RECEIVED NYSCEF: 12/03/2018 08/26/2019 CHA5E G October 01, 2016 through October 31, 2016 AccountNumber: -tEDACTED 7171 5[ECTRONIC WITHDRAWALS DATE DESCRIPTION AMOUNT 10/11 10/08 Online Payment 5717591766 To Pseg Long Island $49.99 10/11 10/08 Online Payment 5717591845 To Pseg Long Island 270.59 10/11 10/08 Online Payment 5717614560 To Pseg Long Island 229.75 10/11 10/08 Online Payment 5717623777 To Psegli 419.68 10/11 10/08 Online Payment 5717643015 To Suffolk County Water Aüticiity 225.73 10/11 10/08 Online Payment 5717643022 To Naticaâ!grid 91.98 10/11 10/08 Online Payment 5717643010 To SuffolkCounty Water Authority 59.04 10/11 10/08 Online Payment 5717643033 To SuffolkCounty Water Authority 34.26 10/11 10/08 Online Payment 5718262873 To Winter Bros 190.42 10/11 10/09 Online Payment 5719227118 To Richard Sapienza 275.64 10/11 10/09 Online Payment 5719272441 To John F. Capobianco,Architect 5,000.00 10/11 10/09 Online Payment 5719273942 To Lisa M. Pace 2,500.00 10/13 10/13 Online Payment 5717591763 To Pseg Long Island 79.94 10/18 10/18 Online Payment 5717614571 To Pseg Long Island 284.92 10/20 10/20 Online Payment 5741772373 To Bohler Enginerring 900.00 10/27 10/27 Online Payment 5757371170 To SitBack & Relax, Inc. 60.00 10/27 10/27 OnlinePayment 5757371169 To SitBack & Relax, Inc. 30.00 10/31 10/29 OnlinePayment 5759103055 To John F. Capobianco, Architect 10,793.78 10/31 10/29 OnlinePayment 5759094352 To Lisa M Pace 2,264.49 Total Electronic Withdrewals $23,760.21 [ FEES DATE DESCRIPTION AMOUNT _10/28 Domestic | cüm|ñg Wire Fee $15.00 10/31 Cash Deposit :mmadiãio 0.65 Total Fees $15.65 DAILY ENDING BALANCE DATE AMOUNT DATE AMOUNT DATE AMoUNT 10/03 $14,340.25 10/13 2,493.23 10/20 1,345.64 10/04 19,420.25 10/14 1,757.23 10/27 1,255.64 10/07 24,370.25 10/17 2,530.56 10/28 201,240.64 10/11 3,148.17 10/18 2,245.64 10/31 188,181.72 10/12 2,573.17 SERVICE CHARGE SUMMARY TRANSACTIONs FOR SERVicE FEE CALCULATION NUMBEROF TRANsACTIONS Checks Paid /Debits 6 Deposits / Credits 5 Deposited Items 12 Transaction Total 23 SERVICE FEE CALCULATION AMOUNT Service Fee $0.00 Service Fee Credit $0.00 Net Service Fee $0.00 Excessive Transaction Fees (Above 200) $0.00 Page2 of4 FILED: SUFFOLK COUNTY CLERK 12/03/2018 08/26/2019 02:07 04:38 PM INDEX NO. 613443/2018 603298/2019 NYSCEF DOC. NO. 25 36 RECEIVED NYSCEF: 12/03/2018 08/26/2019 CHA5E G October 01, 2016 through Oct