Landlords try to push AWOL attorney Kossoff into bankruptcy

Lawyer’s clients claim he misappropriated millions in escrow funds

New York /
Apr.April 13, 2021 01:49 PM
Mitchell Kossoff (Photo via Kossoff, PLLC)

Mitchell Kossoff (Photo via Kossoff, PLLC)

Real estate investors who say they’ve been scammed out of millions in escrow funds from attorney Mitchell Kossoff’s law firm now want to push the firm into bankruptcy.

A group of four investors filed a petition for involuntary bankruptcy Tuesday against Kossoff PLLC, listing slightly more than $8 million in “misappropriated” escrow funds, filings with New York’s Southern District bankruptcy court show.

A representative for the Kossoff firm could not be immediately reached. The company has taken down its website since The Real Deal first reported last week that founder Mitchell Kossoff seemed to have disappeared, leaving several of the city’s biggest multifamily landlords concerned about what happened to their escrow funds. Tuesday’s lawsuit also contends he has not been located.

The Manhattan district attorney’s office is also investigating Kossoff, Law360 previously reported.

The largest debtor of the four investors who filed suit, Miami-based developer Gran Sabana Corporation, also filed a civil claim in federal court alleging Mitchell Kossoff violated the contract on their $4.5 million escrow fund.

“Rather than hold the money for the anticipated real estate transactions — as Kossoff agreed to do (and was bound to do by legal and ethical requirements) — Kossoff siphoned Gran Sabana’s funds, as well as the funds of other clients, out of the escrow account for his own personal use,” the lawsuit claimed.

The other creditors in the bankruptcy case are United American Land, which says it’s missing about $2.4 million, Louis and Jeanmarie Giordano, who say they’re missing about $1 million and Thomas Sneva, who claims he’s missing more than $57,000.

The allegations echo those in at least two other lawsuits filed against Kossoff’s firm last week. Westchester-based investor Rob Yaffa and Long Island-based investor SSM Realty Group each filed complaints over nearly $2 million missing escrow funds combined.





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