The Real Deal New York

Developers of troubled Harlem condo reach deal with AG

Scarpinito, Sanjana avoid contempt charge but still face Attorney General suit over Mirada filings

February 19, 2014 01:55PM
By David Jones

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161 East 110th Street and Eric Schneiderman

The developers of the Mirada condominium in Harlem have reached an agreement with State Attorney General Eric Schneiderman to avoid a contempt charge — if they make the required repairs and obtain a permanent certificate of occupancy at the property.

The developers, Joseph Scarpinito and Shiraz Sanjana, have agreed to deposit $200,000 into an escrow account and make repairs to stop flooding and other defects at the 161 East 110th Street condo, which are required to obtain a certificate of occupancy from the city Department of Buildings.

“We’re going to work as expeditiously as as we can to obtain the certificate of occupancy,” said attorney Maurice Sercarz, who represents Scarpinito. “I’m hopeful this is a step towards resolving all the outstanding issues that resulted in the order to show cause.”

In December, Schneiderman filed suit against the developers, alleging they submitted false filings to his office in claiming that Scarpinito’s 83-year-old mother was the actual developer of the 68-unit condo.

According to court records, Sanjana would submit documents with the signature of Scarpinito’s mother to Harold Gruber, the attorney who handled the condo’s offering plan, and the documents would be notorized without her being present. In addition, Scarpinito, a veteran real estate developer, failed to disclose a personal bankruptcy and a 1998 conviction for felony bank fraud in the Mirada’s offering plan.

The suit also alleges that the developer released $3.2 million in escrow deposits from purchasers without ever obtaining a permanent certificate of occupancy, which is required to release those funds. A state Supreme Court judge granted a motion by Schneiderman to temporarily ban both the developers and attorney Harold Gruber, who prosecutors say, helped draft the fraudulent offering plan, from participating in any condo or coop sales in the state.

Lawyers for the condo board, after battling with the developers in a $3 million fraud suit filed in 2011, sent a complaint to the AG in September 2013 detailing extensive defects in the building, including water leaks entering the building from the roof and façade. They expressed hope that the agreement would help get the repairs completed.

“This is definitely a step in the right direction for which the board is appreciative of the Attorney General’s efforts,” said attorney Steve Sladkus, co-chair of the real estate department at Wolf Haldenstein, which represents the condo board. “The developer has always in our opinion shirked its responsibilities in fixing defects.”

The attorney for Sanjana declined to comment. Gruber was not immediately available for comment.

According to the order, the developers are required to submit weekly reports to the AG’s office detailing progress on the repairs and obtaining the certificate of occupancy.

What remains unclear is how the Attorney General’s office plans to proceed with the fraud charges if the certificate is obtained. Melissa Grace, a spokesperson for the AG declined to comment other than to say, ‘the investigation continues.”

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