NY Real Prop L § 339-C (2021)
2021 New York Laws RPP - Real Property Article 9-A - Subdivided Lands 339-C - Action by Department of State.

§  339-c. Action by department of state. 1. Whenever the department of   state shall believe from evidence satisfactory to it that  a  subdivider   has engaged in, is engaged or is about to engage in any of the practices   or  transactions  heretofore referred to as fraudulent practices, it may   have an action brought in the manner hereinafter provided  in  the  name   and  on  behalf  of  the  people  of  the state of New York against such   subdivider and any other person or persons theretofore concerned  in  or   in  any  way participating in or about to participate in such fraudulent   practices, to enjoin such subdivider and such other  person  or  persons   from  continuing  such fraudulent practices or engaging therein or doing   any act or acts in furtherance thereof or, if the  department  of  state   should believe from such evidence that such subdivider has or is engaged   in  any such fraudulent practice, it may have included in such action an   application to enjoin permanently such subdivider and such other  person   or  persons  as  may  have  been  or may be concerned with or in any way   participating in such fraudulent practice, from selling or offering  for   sale  to  the public within this state, as principal, owner, subdivider,   broker or agent or otherwise, any vacant land or lands. In  said  action   an order or a judgment may be entered awarding the relief applied for or   so  much  thereof  as  the  court may deem proper. Upon a showing by the   department of state in the application  brought  in  its  behalf  for  a   preliminary  injunction hereunder that the defendant named in the action   or an officer thereof has refused to be sworn or to be  examined  or  to   answer a material question or to produce a book or paper relevant to the   inquiry  when  duly  ordered  so  to  do  by  the  officer or judge duly   conducting an inquiry into the subject matter forming the basis  of  the   application for such preliminary injunction, such refusal shall be prima   facie  proof  that  such  defendant is or has been engaged in fraudulent   practices as set forth in such application and a preliminary  injunction   may  issue  from  the  supreme  court without any further showing by the   department of state.2. If the vacant land or lands  of  a  foreign  corporation,  company,   association  or  non-resident  individual  are offered or advertised for   sale within the  state  of  New  York  and  such  corporation,  company,   association  or  non-resident  individual has not filed pursuant to laws   heretofore or hereafter existing the designation of a person  upon  whom   process  against  him  or  it  may  be  served or the designation of the   secretary of state as such person pursuant to section two hundred ten of   the general corporation  law  or  other  laws  heretofore  or  hereafter   existing  or in lieu thereof, an instrument in writing duly acknowledged   and filed in the office  of  the  secretary  of  state  designating  the   secretary  of  state as the person upon whom may be served any subpoena,   subpoena  duces  tecum  or  other  process  directed  to  such   foreign   corporation,  company, association or non-resident individual and issued   in any investigation, examination or proceeding pending or about  to  be   instituted  under  and  pursuant  to  the  provisions of this article, a   notice  may  be  served  upon  such  foreign  corporation,  company   or   association,  or  upon  any  non-resident  officer  thereof,  or  upon a   non-resident individual, by  mailing  the  same  in  a  securely  sealed   postpaid  wrapper  addressed  to  such  foreign  corporation, company or   association, or officer thereof, or non-resident individual, at  its  or   his  last  known  place of business or residence, and may in such notice   require that such foreign corporation, company or association,  or  such   officer   thereof,   or   non-resident  individual,  furnish  a  written   statement, verified as required in said notice, giving  the  information   therein  specified relating to the vacant land or lands offered or to be   offered in the state of New York by such foreign  corporation,  company,   association or non-resident individual or, in the alternative, that such    foreign  corporation,  company  or association, by its proper officer or   officers,  or  such  non-resident  individual,  shall  appear  within  a   reasonable  time  from  the  date of mailing such notice at a designated   place  within  this  state for examination and shall produce at the time   and place of such examination such books  and  papers  of  such  foreign   corporation,  company, association or non-resident individual, as may be   designated in such notice.If such foreign corporation, company,  association,  or  such  officer   thereof, or non-resident individual, shall fail to furnish the statement   called  for  by such notice, or shall fail to appear pursuant thereto or   to produce the books and papers required  thereby  to  be  produced,  or   refuse  to  submit  to examination or to answer any proper question, the   proof of such failure or refusal shall constitute prima  facie  evidence   that  the  sale  or offering for sale or advertisement of vacant land or   lands of such foreign corporation, company, association or  non-resident   individual  constitutes a fraudulent practice within the meaning of this   act and may in the discretion of the court be treated  as  a  sufficient   basis  for  a  permanent  injunction  against  the  continuance  of such   fraudulent practice.3. In any action brought in behalf  of  the  department  of  state  as   provided  in this article, the court at any stage of the proceedings may   appoint a receiver of any and all property derived by the  defendant  or   defendants  or  any  of  them by means of any such fraudulent practices,   including also all property with which such property has been mingled if   such property can not be identified in kind because of such commingling,   together with any or all books of account and  papers  relating  to  the   same.    The  judgment  entered  in  such  action  may provide that such   receiver shall take title to any or  all  such  property  and  books  of   account  and  papers relating to the same and liquidate such property or   any part thereof for the benefit of all persons intervening in the  said   action  and  establishing an interest in such property. The judgment may   also provide that all such property, the title to or interest  in  which   has  not  been established in such action by intervenors or otherwise by   due process to be in  a  person  or  persons  other  than  defendant  or   defendants,  shall  be  returned to the defendant or defendants as their   interest may appear. Such receiver shall be subject to all the duties of   receivers appointed in civil actions as far as practicable  except  that   such  provisions  relating  to  commissions or compensation of receivers   shall not be applicable to receivers appointed pursuant to this section,   but such commissions or compensation shall be fixed by the court in  any   amount  which  it  may determine to be just and equitable. In any action   brought in behalf of the department of state as provided in this article   the court may grant such other and further relief as may be proper.4. Whenever the department of state  has  determined  to  commence  an   action  under  this article, it may have the attorney-general present to   any justice of the supreme  court,  before  beginning  such  action,  an   application  in  writing  for  an  order directing the person or persons   mentioned in the application to appear before the justice of the supreme   court or referee designated in such order and answer such  questions  as   may  be  put  to  them  or  to  any  of them, or to produce such papers,   documents and books concerning the alleged fraudulent practices to which   the action which  the  department  of  state  has  determined  to  bring   relates, and it shall be the duty of the justice of the supreme court to   whom  such  application for the order is made to grant such application.   The application for such order may  simply  show  upon  information  and   belief  that  the  testimony  of  such person or persons is material and   necessary. The provisions of the civil practice law and rules,  relating   to  an  application for an order for the examination of witnesses before    the commencement of an action and  the  method  of  proceeding  on  such   examination shall not apply except as herein prescribed. The order shall   be  granted  by the justice of the supreme court to whom the application   has  been made with such preliminary injunction or stay as may appear to   such justice to be proper and expedient and shall specify the time  when   and  place  where  the  witnesses are required to appear. The justice or   referee may adjourn such examination from time  to  time  and  witnesses   must  attend  accordingly.    The  testimony  of  each  witness  must be   subscribed by him and all must be filed in the office of  the  clerk  of   the county in which such order for examination is filed.5. The order for such examination must be signed by the justice making   it  and  service of a copy thereof with an endorsement by the department   of state or the attorney-general, to the effect that  the  person  named   therein  is required to appear and be examined at the time and place and   before the justice and referee specified in such endorsement,  shall  be   sufficient  notice for the attendance of witnesses, such endorsement may   contain a clause requiring such person to produce  at  such  examination   all  books,  papers and documents in his possession or under his control   relating to the subject of such examination. The order shall  be  served   upon  the  person  named in the endorsement aforesaid by showing him the   original order and delivering to and leaving with him at the same time a   copy thereof, endorsed as above provided, and by paying or tendering  to   him  the  fee allowed by law to witnesses subpoenaed to attend trials of   civil actions in any court of record in this state.6. The referee appointed as provided in this article possesses all the   powers and is subject to all the duties of  a  referee  appointed  in  a   civil  action,  so  far  as  practicable,  and may punish for contempt a   witness duly served with the papers as prescribed in  this  article  for   non-attendance or refusal to be sworn or to testify or to produce books,   papers  and  documents  according  to  the  direction of the endorsement   aforesaid, in the same manner and to the same extent  as  a  referee  to   hear, try and determine an issue of fact or of law.7.  The  provisions of the civil practice law and rules shall apply to   all actions brought  under  this  article  except  as  herein  otherwise   provided.8.  If any person shall ask to be excused from testifying or producing   any book, paper or other document before the department of state or  the   attorney-general or his deputy, or other officer designated by it or him   or  before  any  court,  or  magistrate,  or  referee,  upon  any trial,   investigation or proceeding initiated by the department  of  state,  the   attorney-general, district attorney, grand jury or court pursuant to the   provisions  of  this  article upon the ground or for the reason that the   testimony or evidence, documentary or otherwise,  required  of  him  may   tend  to  incriminate him or convict him of crime or to subject him to a   penalty or forfeiture, and shall  notwithstanding  be  directed  by  the   court,  referee, magistrate or officer conducting the inquiry to testify   or to produce such book, paper or document, he must none the less comply   with such direction but  in  such  event  he  shall  not  thereafter  be   prosecuted  or  subjected to any penalty or forfeiture for or on account   of any transaction, matter or thing concerning which he was  ordered  to   testify  or produce evidence, documentary or otherwise, pursuant thereto   and no testimony so given or produced shall be received against him upon   any criminal action, suit or proceeding, investigation,  inquisition  or   inquiry.Provided,  however,  no  person  so  testifying  shall  be exempt from   prosecution or punishment for  any  perjury  committed  by  him  in  his   testimony  given  as  herein  provided  for, nor shall immunity apply to   corporations or to the officers as such.