Laurelton family of alleged scam artists charged with numerous crimes for roles in decade-long scheme: DA

The house in Laurelton at the center of the schemes pulled off by the Bailey family. (Photo via Google Maps)

Three members of a Laurelton family have been charged with multiple crimes, including grand larceny, forgery, perjury, identity theft, defrauding the government and official misconduct for their roles in multiple scams over the past decade, according to Queens District Attorney Melinda Katz.

Stephanie Bailey, 50, of 225th Street in Laurelton and Latonya Bailey Dostaly, 45, of West 28th Street in Brooklyn, were arraigned before Queens Criminal Court Judges Denise Johnson and Anthony Battisti on felony complaints charging them with multiple crimes, Katz announced Wednesday, May 4. Stephanie Bailey’s daughter, Chianti Bailey, 31, of 225th Street in Laurelton, remains at large and warrants have been issued for her arrest, according to the DA’s office.

According to the complaint, retired Port Authority accountant Rusell Butler died in 2010, leaving personal documents inside his empty home at 137-47 225th St. in Laurelton. As alleged, Stephanie Bailey moved her family into Butler’s home in 2014 and shortly thereafter, Chianti Bailey filed a fake will in Bronx Surrogate’s Court claiming she was the heir to Butler’s estate. She was granted ownership of the house in 2020 and promptly took out a $200,000 mortgage. She also used fake documents to obtain more than $100,000 in unclaimed funds owed to the butler estate.

While her daughter was allegedly stealing Butler’s house, Stephanie Bailey allegedly stole almost $100,000 from the Housing Choice Voucher program commonly known as Section 8.

According to the complaint, Stephanie Bailey applied for housing assistance with New York State Homes and Community Renewal in September 2014 and included in her application a fake lease — listing a fictitious landlord — for the Laurelton house. The federal government sent rent payments of almost $90,000 to the fake landlord, which Chianti Bailey and Latonya Bailey Dostaly deposited into their own bank accounts.

Katz said the defendants allegedly filed fake tax returns seeking refunds from the state Department of Taxation and Finance. More than 30 victims had their identities stolen in the defendant’s scheme, and more remain under investigation, according to the DA. In 12 fake tax returns, the defendants attempted to steal more than $52,000 from the NYS Tax Department and succeeded in stealing almost $38,000.

“As alleged, these defendants used virtually every trick in the book to pull off an assortment of illegal scams over more than a decade — including taking control of the $700,000-plus home of a longtime Laurelton resident who died in 2010,” Katz said. They stole people’s identities — including the identities of at least 20 children — to use in a large-scale tax fraud scheme, ripped off Section 8 and COVID relief funds, and filed $200,000 worth of false unemployment insurance claims. These defendants will now be held to account for their one-family crime spree.”

According to the complaint, Chianti Bailey’s sister Latonya Bailey Dostaly used her position at the NYC Human Resources Administration to access HRA’s electronic files. She allegedly accessed application files and stole the identities of more than 20 children for use as dependents in her family’s fake tax return scheme.

“The HRA employee who is charged here allegedly preyed on the very clients she was supposed to assist, using her access to City files to steal,” Department of Investigation Commissioner Jocelyn Stauber said. “Those who seek help from City-administered programs should not thereby become victims of wrongdoing by City employees and others, and we will work with our law enforcement partners to hold such wrongdoers accountable.”

The defendants were ordered to return to court on June 8. If convicted, each faces up to 52 years in prison.