New York’s biggest, baddest and juiciest real estate lawsuits of 2022
Landlords, politicians, tenants and scammers all had their day in court
New York’s legal eagles billed plenty of hours to real estate clients last year on both sides of the courtroom, where landlords, tenants, scammers and profligates all had their day. A lawsuit over a ring of illegal Airbnb rentals drew the most attention from readers of The Real Deal, and City Hall’s crackdown on negligent landlords garnered a lot of clicks too. Several disputes over rent regulation were also represented among the lawsuits our readers noticed most.
Here are more details on the 10 most popular lawsuits TRD covered in 2022:
The Wolf of Airbnb
The legal travails of Konrad Bicher, the self-proclaimed “Wolf of Airbnb,” came to a head last year. His scheme to rent Manhattan apartments on the online marketplace might have worked had he not stiffed a string of landlords along the way and refused to vacate the properties. Bicher is also accused of scamming his way into receiving Federal PPP loans worth $565,000.
The bad behavior appears to have begun before Covid, but grew when travel and tourism halted due to the pandemic. He told TRD that his nickname “means someone who is hungry and ruthless enough to get on top of the financial ladder.”
His enterprise first reported by TRD in February, Bicher was arrested in Florida over the summer and charged by federal authorities in October with committing fraud and identity theft. Airbnb reportedly banned Bicher from the platform.
Mayor vs. Moshe
New York City hauled landlord Moshe Piller into court after he amassed enough tenant complaints and building violations to land him on Public Advocate Jumaane Williams’ “worst landlords” watchlist. Mayor Eric Adams’ administration claimed in April that Moshe failed for years to address housing, fire code and health violations in his properties, allowing apartment buildings containing 927 units to fall into disrepair. Among the accusations, which Moshe has denied in court, are creating apartments with inadequate fire exits and failing to address peeling lead paint and pest infestations.
Earlier this month, the city brought similar lawsuits against landlords Fred Ohebshalom and Efstathios Valiotis.
Landlords Fred and Alex Hay copped to a long-running scheme that included fake tenants and phantom improvements as a way of raising rents at an Upper Manhattan apartment building. The scam involved reporting to housing authorities inflated rents on some units and misusing a now-defunct law that permitted rents to increase during periods of vacancy.
Real tenants who rented units after the fake ones ended up paying higher rents than allowed by law. The state attorney general’s office discovered discrepancies between rents reported to officials and those charged to tenants by subpoenaing financial agreements with the property’s lender. The Hays agreed to repay victimized tenants tens of thousands of dollars but escaped punitive fines.
An eviction case that left 98-year-old Ida Robinson fighting for her family home of nearly 70 years unfurled like a Dickensian saga in Crown Heights, Brooklyn. What began with a paid-off mortgage of $17,000, originated in 1951, became a protracted dispute over a subprime mortgage loan against the home in 2007 and a buyback agreement which saw the deed transferred to landlord Menachem Gurevitch in 2016.
Gurevitch attempted an eviction but was halted by the Crown Heights Tenants Union and Brooklyn Eviction Defense, which moved the family back into the home. Allegations that Robinson’s grandson had pocketed money from the buyback agreement muddied the waters, as did the city’s eviction moratorium. Litigation over the deed to the home is ongoing.
A tangled web of overcommitted collateral and underperforming assets landed WeWork’s first investor, Joel Schreiber, in legal disputes with a multitude of foes over his real estate portfolio. After borrowing money from Goldman Sachs, Adam Neumann, an Orthodox Jewish congregation and a reinsurance company with roots on Durham, North Carolina’s historic Black Wall Street, Schreiber lost his most prized property — a one-million-square-foot commercial building in Downtown Los Angeles — to Barry Sternlicht’s Starwood Capital through foreclosure.
Twin lawsuits challenging the constitutionality of tenant-friendly changes made in 2019 to the state’s rent laws remain before the Second Circuit Court of Appeals. An expected loss could yield a berth before the U.S. Supreme Court, where a conservative majority might look kindly on landlords. Plaintiffs allege that New York’s rent stabilization violates the Fifth Amendment, which bars the taking of private property without “just compensation,” as well as the Fourteenth Amendment’s due process clause.
Hamptons luxury developer Joe Farrell found himself in hot water after allegedly cutting down 120 mature trees from a neighbor’s property in Southampton without her permission. Homeowner Susan Burnside asked a Suffolk County court for $36 million in damages, an amount triple the purported value of the arboreal assets, because the destruction was done “intentionally, willfully and with knowing disregard.” Activists and elected officials in the Hamptons have lately taken more notice of tree-clearing among builders, arguing that overdevelopment risks environmental and cultural harm to the coastal enclave.
Embattled former HFZ Capital principal Nir Meir narrowly escaped the ire of a judge that had grown weary of his “procedural maneuvers” to escape accountability when he settled a dispute with Israeli auto magnate Yoav Harlap. Harlap was among the investors who sued Meir and HFZ Capital founder Ziel Feldman over the firm’s 2020 collapse. After trying to collect on an $18.5 million judgment against Meir, Harlap wanted Meir thrown in jail for allegedly lying about the sale of a blue convertible Aston Martin, which would violate a restraining order against selling assets.
Robert Gans, the owner of a West Side real estate portfolio with valuable development potential, cried conspiracy when lenders including affiliates of Gary Barnett’s Extell Development and Joseph Tabak’s Princeton Real Estate Partners moved to foreclose on his property. A company led by a member of the Tabak family bought the senior debt on Gans’ portfolio for $148 million last April and quickly initiated foreclosure proceedings, prompting Gans to throw his businesses into bankruptcy. The portfolio also includes property in Queens and the Chelsea nightclub Scores, which inspired the film “Hustlers” starring Jennifer Lopez.
Paul Manafort, once a campaign manager to former President Donald Trump, lost his 4,400-square-foot brownstone in Carroll Gardens to foreclosure. The property, which Manafort renovated into a single family home, fetched $4.8 million at public auction. The townhouse at 377 Union Street was cited in a 2017 indictment by Robert Mueller alleging that Manafort bought it as part of a money laundering and tax evasion scheme. Manafort had agreed to forfeit the home, but ultimately lost it to lenders following a presidential pardon. Manafort paid around $3 million for the townhouse in 2012.