Courts roundup: State alleges $5M Bay Ridge condo fraud, $5.2M Lenox Hill bankruptcy

State alleges $5M condo fraud in Bay Ridge: The Office of Attorney General Letitia James of the State of New York alleges that a developer sold apartments in a purported condominium building that had not in fact been divided into separate tax lots, therefore defrauded at least 20 buyers of $5 million or more, according to a complaint filed yesterday in State Supreme Court in Manhattan. The court action relates to the development of 345 Ovington Avenue in Bay Ridge, Brooklyn.

Court filings are the positions of one party and are not necessarily accurate or complete.

According to the complaint, the Office of the Attorney General’s investigation revealed, “that [the defendant] defrauded at least 20 prospective purchasers (and likely more) by purporting to sell to them real estate securities that did not exist. As a result of this illegal conduct, [the defendant] personally and through his companies stole more than $5 million from these victims… OAG’s investigation also revealed that [the defendant] violated the rules governing the property tax exemption program under Section 421-a of the N.Y. Real Property Tax Law by improperly renting out apartments in the Building without providing tenants the protections of New York Rent Stabilization Law.”

The complaint seeks to permanently enjoin the defendant and an alleged accomplice from, “directly or indirectly engaging in any business or activity related to real estate development, real estate finance, construction, property development, or the transaction involving any interest in real estate in the State of New York, other than their own personal residences.” LINK

On the tax lot, the most recent condominium plan was filed by 345 Ovington, LLC to create 25 residential units in a building at 345 Ovington Avenue in Bay Ridge, Brooklyn, called Ovington Condominium that has a $11.3 million sellout, according to an January 7, 2013 submission to the New York State Attorney General. The state in 2015 declared the condo plan effective, but the property was never subsequently divided into separate tax lots, according to a review of city records. The most recent loan on the building is for $5.85 million, given in 2015.

Developer Xi Wu submitted a new building construction project for a 25-unit, 21,824 square-foot residential (R-2) building at 345 Ovington Avenue. The plan was filed on February 16, 2011 and was permitted on June 28, 2012. It calls for the construction of a 50-foot tall, five-story building and was filed with the New York City Department of Buildings under job number 320270577. The project is described in the filing as: erect a five story and cellar, 25 class ‘a’ apartments. For the tax lot building, it received its initial certificate of occupancy on March 12, 2015.

Direct link to the property’s ACRIS page and link to DOB NOW portal.

$5.2M bankruptcy filed in Lenox Hill: Ezra Chammah filed for bankruptcy protection to block a pre-foreclosure process brought by lender SKW Funding. Chammah claims the property is worth more than $10 million and has debts under $10 million. In October 2022, a state Appellate Division justice denied a motion to stay the appointment of a receiver. The parties were set to have a conference call today, November 3, which will likely be adjourned because of the bankruptcy filing. The additional owners are Emmanuelle Chammah, Michele Chammah, Vanessa Chammah. The Wrublin’s SKW Funding in December 2020 bought the loan with an original principal of $5.2 million from Bethpage Federal Credit Union. SKW Funding filed to foreclose in February 2021. Pre-foreclosure link: 850019/2021 Bankruptcy link: 22-11458-jpm