A multi-family apartment building in Upper Manhattan purchased this year at a record price per unit by an affiliate of Manhattan-based Atias Enterprises was acquired with allegedly illegal funds and federal prosecutors want that property and a smaller one in Brooklyn turned over to the government.
Prosecutors say the Atias affiliate used $2.2 million that came from so-called structured account transfers, which are deposits made in small batches to circumvent federal bank reporting laws, to buy the 38-unit 134 Haven Avenue in Washington Heights on Feb. 29, according to a civil complaint filed yesterday by the U.S. Attorney for the Eastern District of New York in Brooklyn.
Federal law requires banks to file reports when transactions of $10,000 or more are made — or multiple transactions that add up to more than $10,000 — and it’s a violation of the law to evade those regulations.
The total purchase price for the Washington Heights property was $9.05 million, setting a record level per unit for the neighborhood of $239,000, the broker on the deal, Massey Knakal Realty Services, said in a news release last month.
Prosecutors identified three individuals with the structured transactions. Real estate operator Sameh Jacob and Mokhless Yakob were the signatories on a Citibank account, and Jacob alone was the signatory on accounts with M&T Bank, TD Bank, Capital One and Sovereign. Jack Atias, owner of Atias Enterprises, was the signatory on a JPMorgan Chase account. Combined, the three were signatories on accounts in which more than $3.4 was deposited in approximately 361 transactions generally between $9,000 and $9,900 from March 3, 2011, to Jan. 27, 2012, court records say. While the transactions themselves were not said to be illegal, the alleged intent to evade federal reporting rules is illegal.
A spokesperson for the U.S. Attorney declined to comment, and Jacob, Yakob and Atias could not be immediately reached for comment. Jacob is identified in court records as a principal owner of property management firm 45-51 Ave. B, LLC, which owns the four-unit building at that address.
A New York real estate source, who declined to be identified speaking about questionable activity, had seen a small number of real estate purchases funded through apparently illegal sources over the years.
“The few groups that I have come across in the past have been trying to get capital out of emerging markets or to avoid taxes,” the source said.
Atias lists six apartment buildings in Manhattan and the Bronx, on its website, with a total of 139 units that it owns and manages, including the 26-unit 458 West 52nd Street in Clinton and the 14-unit, 39-41 First Avenue in the East Village.
While the complaint does not charge the men with any crime it suggests such transactions are suspicious, says that generally, “Many individuals involved in illegal activities such as narcotics trafficking, tax evasion and money laundering, are aware of the reporting requirements, and take active steps to cause financial institutions to fail to file [the reports].”
A law enforcement source said prosecutors use a variety of tactics when going after suspected illegal activity, and sometimes start with a forfeiture action before — or instead of – filing a criminal complaint. The source noted that the most common reason people structure bank deposits is to avoid paying taxes, not to launder money gained through criminal activity such as drug dealing.
The government is also seeking the forfeiture of a 3,025-square-foot single-family home at 11 86th Street in Bay Ridge, which Jacob purchased Dec. 9, 2011, for $1.125 million, city property records show. That was purchased with just over $1 million of allegedly structured cash deposits, the complaint said.