I’m sure he’s facing several civil lawsuits right now but I think SEC/criminal investigations should be happening as well. 

Also credit score 680 with no missed payments over the last 2 years and also check their criminal report just to make sure you know who these tenants are, as the eviction process in New York city is very long and expensive. 

Think hard about your criminal background criteria.

To further answer your question: the truth of is subto legal is “it depends” - now is it criminal - most likely no - but could it be illegal yes.

You can't run a credit/criminal without the social.

well as I posted last week Oregon is now going to require wholesalers to be licensed they have carved out a special license for this activity.. those wishing to continue to wholesale will need to do full criminal and get a bond.. some will not qualify as they have bad backgrounds or crappy credit.

Criminal background will weed out some bad actors as well.  

There is a ton of risk for the seller as we know in these deals and there are bad actors in these deals as well.. ran into many of them buy sub to never pay of the mortgage rip the rents and down the road..some off those folks got criminally charged and got prison time..

Very bogus behavior.

Put a lien on the property(s) they own, this is needed by some court action (i.e. lawsuit in civil/criminal court)