Harlem developers blocked from condo sales, ordered to deposit $3.2M

161 East 110th Street and Eric Schneiderman
161 East 110th Street and Eric Schneiderman

Two developers and a lawyer involved with the 68-unit Mirada condominiums in Harlem have been temporarily banned from developing apartments in the state and ordered to set aside $3.2 million, pending a court case over alleged defects at the project, a spokesperson for New York State Attorney General Eric Schneiderman told The Real Deal.

Specifically, developers Joseph Scarpinito and Shiraz Sanjana and lawyer Harold Gruber were banned from any securities-related work or activity related to condos or co-ops in New York State and ordered to fork over the deposit to the court, under an order from a New York State judge.

Gruber declined to comment. Maurice Sercarz, an attorney for Scarpinito, was not immediately available for comment. Sanjana could not immediately be reached for comment.

The move comes a day after Schneiderman filed suit against the developers in New York State Supreme Court, alleging a range of fraud and concealment at the eight-story development at 161 East 110th Street, which allegedly suffered from extensive leaks and other construction defects. The ban will remain in place at least until the suit is resolved.

According to Schneiderman, the developers submitted at least nine false filings to his office and claimed that Scarpinito’s 83-year-old mother was the sole person controlling the sponsor, an entity called 110th Street Development, without her knowledge. Sixty-seven unit owners complained to the AG’s office about problems at the building, Schneiderman said.

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“Because of their egregious conduct and their failure to cooperate, my office sought a court order under the Martin Act that stops these actors from operating in the securities market and safeguards the purchasing public and the victims at the Mirada as we continue to investigate,” Schneiderman said in a statement.

Scarpinito, 59, is a long time developer who was convicted of felony bank fraud in 1998, which he also failed to disclose in the Mirada offering plan, according to the AG.

A hearing is scheduled for Dec. 11 when the defendants will have to appear with tax returns, contracts and other financial documents.

Correction: Due to an editing error, a previously published version of this article misstated Harold Gruber’s first name.