The Real Deal New York

Boymelgreen: My family firm owes $50M in court judgments

In legal filing, developer claims he doesn’t even have enough cash to dissolve company

May 12, 2014 10:15AM
By David Jones

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From left: Jeshayahu “Shaya” Boymelgreen and 92 Laight Street

Developer Jeshayahu “Shaya” Boymelgreen, facing a $1.2 million judgment in a lawsuit connected to his River Lofts condominium in Tribeca, says he already has $50 million in judgments against him, according to court filings.

William Setters, a former contractor at the 416 Washington Street property, and his wife Kathleen, filed suit in February alleging that Boymelgreen and co-developer Africa Israel, illegally converted the profits from the 68-unit building. The ex-contractor, who says he was severely injured in an accident at River Lofts in 2014, claims developers allegedly sold out with more than $131 million in revenue.

But Boymelgreen, a Brooklyn-based developer, said in an affidavit filed last week in Manhattan Supreme Court, that his business –called Boymelgreen Family — suffered a series of “calamitous events” that left him without the financial resources to pay the judgment.

Boymelgreen says his company’s former offices at 750 Pacific Street, in Brooklyn, were taken by eminent domain about five years ago, and that a majority of the company documents were lost during the eviction, according to a sworn affidavit. He says that the eviction came with only 12 hours to clear out and most of the company documents were lost.

“Additionally I suffered over $50 million in judgments,” Boymelgreen states in the affidavit. “Thus I do not have funds to pay the accountants, or even to dissolve Boymelgreen Family.”

Boymelgreen was previously held in contempt after failing to respond to a 2013 subpoena from the plaintiffs requesting all financial and legal records related Boymelgreen and Africa Israel.

Damien Stein, chief operating officer of Africa Israel, said in an April affidavit that Africa Israel does not possess any distributions from the condo sales, either. He says that funds from the River Lofts sales were used for various expenses, including paying off a project loan and other project expenses, and says the funds were transferred off in 2009, according to a sworn affidavit.

Stein says the sponsor entity that developed the condo, a firm called W Squared, effectively ceased business operations in 2009, but the entity still remains and is solvent.

Africa Israel and Boymelgreen are co-defendants in a separate suit at 15 Broad Street, where New York state Attorney General Eric Schneiderman is investigating the developers over the failure to obtain a certificate of occupancy at the condominium, which is marketed under the name Downtown By Starck.

Unit owners allege the property is plagued by construction defects and filed suit in 2011 against the developers. Africa Israel previously claimed that it got out of the project, following a split between Boymelgreen and the firm, which combined on several condo projects in New York and South Florida. Schneiderman, in his lawsuit, claims that millions of dollars set aside in a fund to address defects at the property cannot be accounted for.

Both developers have been banned from marketing or selling condos and coops in New York state, while the investigation continues. Just last month, a judge restored an order for Africa Israel to turn over control of 15 Broad to the building’s unit owners.

A lawyer for Boymelgreen, did not return a request for comment. Boymelgreen could not be reached for comment. Africa Israel declined to comment, through a spokesperson.

  • WannaBeLandlord

    I call BS on the 12 hour eviction notice. If your developing a bldg. that does a $131m in sales you have enough brain capacity to know the timeline of when your eminent domain move is happening. Check the paper shredder for the docs

  • no-permits

    this guy is one of the biggest frauds in the game.

  • Mark Henselt

    Does anyone here believe his story??
    A good team of accountants with subpoenas should be able to help B. find all those missing millions. When people like this attempt to commit such fraud, they should not only have to return all the money they’ve stolen, but also be fined an additional amount equal to the fraud total. If that wipes them out of everything they’ve ever accumulated, tough luck! If their wives have to lose their diamonds and their family move to tawdry apartments, well, they had a good ride while it lasted. Perhaps if the punishment truly fit the crime, there would be a hell of a lot less crime.

  • getreal

    Just a plain old fashion goniff.

  • AnneeZ

    Seems to me every developer sued has a similar story. Dig away and chase the money trail. It’s there.

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