NYC Home Tied to $70M Counterfeiting Ring Heads to Federal Auction

A home in Forest Hills, Queens, linked to two brothers involved in a significant international counterfeiting ring is scheduled for federal auction on October 23, with the U.S. Treasury Department setting the opening bid at $900,000.

The five-bedroom Colonial, located at 110-37 69th Ave., was purchased by brothers Eduard and Arkadiy Bangiyev in 2003 for $850,000. The property is now valued at approximately $2.455 million. The house, built in 1930, features 3,572 square feet of living space, 4½ bathrooms, an enclosed porch, a finished basement with an additional bedroom and bathroom, a sauna, and a detached two-car garage. It will be sold "as is."

The Bangiyev brothers were arrested and subsequently pleaded guilty in January 2015 to participating in a RICO conspiracy involving counterfeiting and money structuring. Federal prosecutors stated that the brothers helped finance an operation that manufactured and distributed large quantities of counterfeit U.S. currency. The scheme produced high-quality fake notes in Israel and the U.S., smuggling them into the country hidden within machinery shipments. At its peak, the organization reportedly introduced up to $3 million in counterfeit currency into the U.S. every three months, with over $80 million ultimately being passed or seized globally.

Arkadiy Bangiyev was sentenced to 108 months in federal prison, and Eduard Bangiyev received 96 months. As part of their plea agreements, both brothers agreed to forfeit assets derived from their racketeering activities. The Forest Hills home became one of the properties subject to forfeiture proceedings.

The property's legal history is further complicated by a separate alleged fraud. According to court documents, money used to pay off the home's mortgage and home-equity lines of credit in 2012 originated from a scheme devised by the brothers to defraud a jewelry customer of $1 million. This scheme was deemed unrelated to the counterfeiting conspiracy by an appellate court.

In 2009, the federal government initiated civil forfeiture proceedings against the property and another Forest Hills residence based on the alleged jewelry fraud. The government dismissed that case in 2011 after securing a $662,500 settlement from the brothers and their sister, Ilana Bangiyeva.

Following the brothers' RICO convictions, the ownership of the 69th Avenue home became a point of contention in further legal battles. Initially, the deed indicated divided ownership: Arkadiy held one-third, Ilana held one-third, and Eduard and his wife, Irina Alishayeva, jointly held the remaining third. Alishayeva argued she had legitimate interests acquired through a gold investment with her brothers, but a district court found insufficient evidence to support this claim.

The district court ultimately determined the Forest Hills property had provided a "source of influence" over the brothers' racketeering enterprise and ordered it forfeited. The government secured a two-thirds ownership interest, while Alishayeva retained a one-third share.

An earlier court order allowed Alishayeva, whose primary residence was the house, to remain there for life, effectively preventing the government from selling its majority stake. Federal prosecutors appealed this decision. In 2023, the U.S. Court of Appeals for the Fourth Circuit ruled in favor of the government, vacating the restrictive portion of the forfeiture order and allowing the government to exercise its ownership rights.

Inspections of the property are scheduled for October 11 and October 18. A $150,000 deposit is required to participate in the online auction.