Downtown Properties legal saga continues

By David Jones | July 14, 2010 04:30PM

JPMorgan faces appeal from West 11th Street building that Richard Bassik’s Downtown Properties manages, as criminal case continues against Bassik and his company

JPMorgan Chase is facing an appeal from Riverbank South Owners Corp., after a state Supreme Court judge dismissed charges against the lender in an ongoing civil case against Richard Bassik, the property manager that was charged with stealing up to $2 million in property funds.

Judge James Yates ordered charges dismissed on June 10 against the lender after lawyers for the co-op, located at 377 West 11th Street, claimed JPMorgan was negligent for allowing the misappropriation of funds.

Bassik, of Manhattan-based Downtown Properties, allegedly used a $500,000 check drawn on a Bank of America account to open a savings account at Chase in 2008, then transferred the funds to other accounts for his own benefit.

Yates cited existing case law that states that the risk of loss of a dishonest agent falls on the principal that selected the agent in the first place, meaning the building that hired Bassik to manage its finances.

“Under these precedents, Chase had no obligation to protect Riverbank from its agent, and therefore that part of the negligence claim predicated on Chase’s failure to prevent Bassik from opening the Chase account should be dismissed,” Yates wrote.

Lawyers For Riverbank South Argued That The Court did not take into account “the factual circumstances” surrounding the building’s claim against Chase. Lawyers also noted that the court should have permitted discovery, in which further evidence is collected.

Bassik, 67, was indicted late last month on charges he stole more than $2.1 million from 13 residential buildings, mainly in Lower Manhattan.  According to the Manhattan district attorney’s office, Bassik used more than $400,000 to pay for American Express bills, and also bought airline tickets to the Caribbean, groceries, gasoline and hotel stays at a Ritz Carlton hotel.

Lawyers for Bassik told the New York Post that he was spending up to $25,000 a month in lottery tickets in the hope that he could pay back the money.

A spokesperson for the DA said a court hearing was scheduled for this morning, and was adjourned until Aug. 5. If convicted of the most serious charge, Bassik could be sentenced to five to 15 years in prison.

Levi Lubarsky & Feigenbaum’s Andrea Weiss, an attorney for JPMorgan, said she would not comment on ongoing litigation, and JPMorgan officials were not immediately available for comment. Lawyers for Riverbank South declined to comment. Bassik is being detained, the DA’s office said. And Michael Soshnick, Bassik’s attorney, was not immediately available for comment.