Brooklyn real estate developers were indicted on charges of defrauding the state’s tax exemption program meant to promote affordable housing, prosecutors announced.
Joel Kohn, Michael Ambrosino, Alen Paknoush, Mendel Gold, Ioan Sita and Gheorghe Sita, and their real estate corporations, were charged in five separate New York State Supreme Court indictments with multiple counts including Theft Grand Second Degree, City Criminal Tax Fraud. and Offering a false instrument for presentation in the first degree. If the defendants are found guilty of the criminal charges, they could face prison terms.
“These developers allegedly abused a government program intended to provide New Yorkers with access to much-needed affordable housing. Not only did they illegally charge far above market rents for years, but they did so while personally reaping the benefits of generous property tax breaks. When I announced our Housing and Tenant Protection Unit last week, I said we would take a targeted approach to the complex and widespread criminal activity that depleted our already limited stock of affordable housing, and this case is just one example. of this,” said District Attorney Alvin Bragg.
of 421st program was a tax benefit that spurred the creation of income-restricted, rent-stabilized affordable housing within new multifamily apartment buildings throughout the city. The program gives generous tax breaks to property developers who agree to reserve a certain percentage of the building’s apartments as affordable units.
An investigation found that each defendant allegedly violated the terms of the program from 2011 to 2019. According to court documents, the defendants, who owned six buildings in Brooklyn, allegedly filed documents with the city and state purporting to false that they were renting designated affordable units in accordance with the 421-a rules. In reality, they were subletting higher rent units to unauthorized tenants who were not approved by HPD. Some of the rates were more than $1,000 a month above the approved affordability level.
The buildings included in the indictment are:
- 70 Bushwick Avenue, Brooklyn, owned by Kohn and Bushwick Powers LLC
- 300 Eldert Street, Brooklyn, owned by Ambrosino and Ambrosino Equities-300 Eldert LLC
- 682 Bushwick Avenue, Brooklyn, owned by Paknoush and Bushwick Plaza LLC
- 305 Stockholm Street, Brooklyn, owned by Ioan Sita and Gheorghe Sita and 305 Stockholm LLC
- 140 Stanhope Street, Brooklyn, owned by Gold and 140 Stanhope Group, LLC
- 1140 Bushwick Avenue, Brooklyn, owned by Gold and 1140 Realty Corp. LLC
As a result, the defendants are alleged to have collectively reaped more than $1.6 million in illegal property tax benefits.
“At a time when affordable housing is critical to New Yorkers and to the city’s recovery from the pandemic, these landlords, they are accused, enriched themselves by fraudulently obtaining over $1 million in city tax credits intended to promote affordable housing,” , said New York Department of Investigation Commissioner Jocelyn E. Strauber. “Instead, it is alleged that these landlords charged New Yorkers higher rents, made no effort to determine whether they qualified for such housing, and misrepresented the city to receive tax credits for which they did not have right. DOI and our partners in the Manhattan District Attorney’s Office and the City Department of Housing Preservation and Development will continue to protect affordable housing benefits for eligible New Yorkers and hold accountable those who take advantage of these loans. tax for their personal benefits.
Editor’s note: A version of this story was originally published in amNY. Click here to view the original story.