UPDATE: April 13, 2016 at 12:50 p.m.: A scandalous real estate dispute is playing out in the courts, where the children of Great Neck-based real estate investor Jacob Harounian are duking it out over allegations of fraud and the misappropriation of millions of dollars in family funds.
Mehrnaz Nancy Homapour is suing her brother, Mark Harounian, claiming he’s used millions in proceeds from 16 various LLCs that control the family’s real estate properties in New York City as a personal piggy bank — buying Picassos, luxury cars and taking vacations.
Homapour’s complaint, filed in New York state Supreme Court in November and amended in March, claims the family’s business interests have suffered “enormous financial harm as a direct result of Harounian’s egregious misconduct,” which allegedly includes misappropriating funds from the family’s LLCs to “finance his outrageously lavish lifestyle.”
The family owns about roughly 30 “income-producing,” predominantly multifamily rental buildings across Manhattan through the 16 LLCs, the suit alleges.
Harounian, who is “solely responsible for the day-to-day management” of the family’s real estate interests, per the lawsuit, allegedly used those funds to “purchase mansions, luxury cars and famous artwork,” as well as “sporting event tickets, personal vacations, jewelry and rent-free apartments for his mistresses.”
Homapour also claims her brother has used the family’s money to acquire, renovate and maintain “additional properties outside” of the family’s business holdings, in addition to paying himself “handsome distributions by mortgaging and refinancing the buildings owned by [the Harounians], and cashing out the monies for his own personal use.”
In legal filings, Harounian’s attorneys described Homapour’s complaint as “meritless” and defended his use of the revenue stream — claiming it is “indisputable” that he’s done his best to boost the value of the family’s business over the last 30 years.
“Every bit of the payments from the Family LLCs to Mark, either directly or through purchases made for him, constitute Mark’s reasonable compensations as manager,” wrote Harounian’s attorney, Todd Soloway. “Mark’s compensation additionally reflects the fact that he is responsible for all of the business affairs associated with each of the properties owned by the Family LLCs.”
The lawsuit details how Homapour demanded an audit of the family’s company books between 2008 and 2015, with Harounian subsequently consenting to the request and providing select records earlier this year. Harounian denies that the documents weren’t available to his sister.
That audit allegedly revealed a trail of funds misappropriated by Harounian, from the family’s business interests, and used for his “own purposes” – including millions cashed out from the refinancing of properties owned by the family; real estate commissions paid to Harounian himself; company funds used to make monthly payments on luxury vehicles and acquire works by artists Pablo Picasso and Keith Haring; and school tuition payments for Harounian’s daughter.
Homapour, who herself owns a minority stake in each of the family’s holding companies, is seeking damages to be determined at trial, as well as punitive damages “in no event less than $50 million.” She is also seeking to remove Harounian from his position as managing member of the family’s real estate business and appoint “a temporary receiver in his stead.”
Legal representatives for Homapour declined to comment on the matter. Harounian’s attorney declined to comment.
This article has been updated to include Harounian’s response in legal filings.