He started it: Jemal brothers accuse each other in lawsuits

Family feud involves wealthy siblings and mom who shared real estate empire

TRD New York /
May.May 13, 2020 09:30 AM
The Jemal brothers are accusing each other of taking cash from their real estate companies. (Credit: iStock)

The Jemal brothers are accusing each other of taking cash from their real estate companies. (Credit: iStock)

The bad blood between brothers Steven and Alan Jemal dates back to at least the 1980s, according to a lawsuit Steven filed on Friday.

Steven spent that decade working hard to build his family’s real estate business, while Alan spent it enjoying the fruits of Steven’s labor, the suit says.

“As Steve was building the family business in the 1980s, 1990s, and early 2000s, Alan expended only minor effort and energy on the business, but he lived large off of it,” it says, claiming that Alan’s “lavish lifestyle” included a roughly $200,000 party for his wife’s 50th birthday and $2 million weddings for his children.

The feud between the brothers has now erupted into dueling lawsuits, with each accusing the other of stealing from their companies. Ruth Jemal, Alan and Steven’s mother, is on Alan’s side in the suits — a defendant in Steven’s and a plaintiff in Alan’s. The three are equal partners in entities that own and operate roughly 100 buildings throughout the city, according to both suits.

Jemal is a famous name in New York retail history: The late Norman Jemal in 1976 opened an electronics store on Fulton Street in Brooklyn called The Wiz, which four of his sons — Marvin, Stephen, Douglas and Lawrence — built into a regional chain called Nobody Beats the Wiz that had more than 60 stores and $1.2 billion in sales when it filed for bankruptcy in late 1997. (It was sold to Cablevision for $80 million and closed in 2003.)

The family hails from the same tight-knit Syrian neighborhood in Gravesend, Brooklyn, that Alan, Steven and their mother Ruth Jemal do, but a connection to the Jemals who owned the electronics-store chain could not be determined, and Steven’s attorney Gil Feder said the two families are not related. Another Jemal family business, JJ Operating, and its sister corporations have properties from Manhattan to Pittsburgh totaling 9 million square feet, according to its website.

In the current litigation, Alan and Ruth sued first, on May 5, naming Steven and his wife, Victoria, as defendants. Their suit accuses Steven of stealing more than $650,000 from several of the management entities that he, Alan and Ruth control, in part to pay off his personal American Express bill. It also alleges Steven refused to pay back $84,000 in loans he took from their firm JSA Management, some of which he used to buy an Aston Martin.

“Steven has refused to repay, even though Steven has recently sold the automobile for his own benefit,” the lawsuit says.

It alleges Steven has been putting the misappropriated funds into bank accounts for himself and Victoria, who has been writing daily $500 checks made out to “CASH” from each of the accounts to prevent the money from being traced, according to the lawsuit.

The suit also claims that Steven took $1 million from a trust that Ruth created without the consent of the trustees and about $2 million from entities that he has a one-sixth interest in. It alleges that his “illegal and furtive behavior is escalating.”

The lawsuit seeks about $1.7 million in damages from Steven, along with an injunction barring him from spending what he has taken and from taking more money from the entities without unanimous consent from their members.

“Steven is hell-bent on getting as much money out of the companies as possible,” a representative for Alan wrote to Steven’s attorney, according to the lawsuit, “no matter what the consequences.”

Michael Devorkin, an attorney at Golenbock, Eiseman, Assor, Bell and Peskoe representing Alan, issued a statement on his client’s behalf saying that this and two additional lawsuits were not claims by Alan against Steven but were rather authorized by trustees and other members of the companies.

“They were filed to protect each entity solely because Steven withdrew money from them without any authority to do so,” he said, adding that Steven “does not dispute the complaints’ allegations that he withdrew the money or that he had no authority to do so.”

Feder said that his client does in fact dispute these allegations.

Steven’s lawsuit, which he filed three days after Alan’s, essentially reverses these allegations, painting a picture of Steven as the responsible brother and Alan as the one who has been looting their companies.

Alan started to manage the Jemal family business around 2002, and although Steven had reservations about his behavior for years, he kept them quiet until 2016, when Alan “was caught trying to bring excess cash with him on a luxury trip to France,” court papers say. He asked Alan and Ruth to negotiate a new management structure soon after, but Alan delayed taking action on this for years, according to the lawsuit.

Steven requested access to the companies’ books and records late last year, and Alan eventually agreed to provide him with limited records, court papers say. Steven identified millions of dollars that had disappeared from the companies without explanation, along with “suspicious and unexplained payments, and other unjustified expenses” in the records, the lawsuit says.

He and his forensic accountants also found instances of overpaid management fees, new bank accounts being opened for no reason and incorrect account balances, according to the lawsuit. It describes their findings as indicating “a high likelihood of fraud” and says that Ruth and Alan have started “openly taking money” from company bank accounts — more than $500,000 in April alone.

Alan refused to provide Steven with several of the requested records and told the companies’ banks to ignore Steven’s inquiries, according to court papers.

Alan and his mother stopped paying Steven distributions early this year to pressure him into dropping his inquiries, the lawsuit claims. They also started calling company meetings on very short notice and refinanced several of their LLCs over his objections early in the year, according to the lawsuit.

One meeting, scheduled for May 1, was meant to remove Steven from his position as a director of their company JEM Realty Management, but Steven still has not received any information about whether that happened, court papers say.

The suit describes these moves as “blatant power grabs by Alan and Ruth, designed to exclude Steve once and for all from not only managing the business, but from even obtaining information to ensure that they are properly managed.”

The charges Steven levies against his brother and mother in the suit include unjust enrichment and breach of contract. He is asking the court for an unspecified amount of damages.

“We will vigorously seek to enforce our client’s rights,” said Feder.

Devorkin described the allegations in Steven’s lawsuit as “mere smoke screens.”

“There simply are no such facts to support Steven’s complaint, and all of his wild and unsubstantiated allegations are denied,” he said. “There is no ‘there’ there. Any claim that Alan acted improperly is untrue.”


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