Ny Bought A Deli Based On Seller’s $14k/week Claim. Actual Revenue Is Half. Fraud?
I bought a deli in a NY. The seller is also my landlord.
Before the sale, he repeatedly represented that the business was doing $1,800–$2,000 per day (~$14k/week). He said this to me, my partners, and others. I have him on video stating those numbers.
We negotiated the price from $220k down to $180k. He then offered to sell for $135k ($120k cash + $15k on paper). The valuation was clearly based on the revenue numbers he provided.
Before closing, I asked multiple times (once by email, several times by phone) for:
Tax returns
Full merchant processing statements
Verifiable financials
He never provided them and avoided the requests.
After taking over, the actual revenue is:
$700–$1,000 on good days
Nowhere near the $1,800–$2,000/day he represented
Additional red flags:
Checks written out to “Cash”
Inventory payments requested in cash
No tax returns ever provided
Revenue does not remotely match what was claimed
The business is generating roughly half of what he represented. Those revenue statements were a major factor in our decision to purchase and the price we agreed to.
Does this potentially qualify as fraudulent misrepresentation under NY law? Or is this simply buyer beware because we closed without verified financials?
I have:
Video of him stating the revenue numbers
Emails showing I requested tax returns and statements before closing
Looking for insight, especially from anyone familiar with NYbusiness law.
Location: NY
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