Landlord claims he was “sandbagged” by Maverick while in prison

Herman Epstein says Customers Bank and Maverick never allowed him to extend his loan

Maverick Real Estate Partners Ted Martell
Maverick Real Estate Partners Ted Martell (Maverick Real Estate Partners, Getty)

Maverick Real Estate Partners is back at it.

The aggressive lender, which has taken on real estate titans including Joe Chetrit and Steve Croman, is foreclosing on a notorious Brooklyn landlord who claims he never received a payoff notice because he was behind bars.

A judge nonetheless allowed Maverick to move ahead with its foreclosure on Herman Epstein’s three-story, multifamily building at 848 Hart Street in Bushwick.

Herman Epstein, who in 2017 was sentenced to up to six years in prison for bribing a New York City Department of Buildings official, claims the previous holder of the loan “sandbagged” him by not giving him proper notice about its maturity.

Epstein claims Customers Bank led him to believe that he could extend the loan after his release from prison. But just as Epstein returned to the free world in early 2021, Customers sent him a notice that the loan had matured and he could not restructure it.

“This is when I first realized that Customers had sandbagged me, knowing I was sitting in jail and thus unable to exercise the extension,” Epstein said in a court filing.

Maverick purchased the loan by May of last year and sent Esptein another notice for payment. It demanded $1.45 million in principal and $373,312 in interest and fees, which included default interest accruing at 24 percent.

Epstein said his lawyers presented Maverick with a plan to pay off the loan, but Maverick rejected it.

In its filing, Maverick said Epstein was given proper notice of a default and the lender was not required to give an extension.

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“Borrower parties fail to submit a defense to their maturity default,” Maverick’s attorney, Michael Bonneville of Kriss & Feuerstein said in a filing.

A judge ultimately ruled in Maverick’s favor, issuing a judgment granting default. The judge also appointed a referee to determine the amount owed. Epstein’s attorney is appealing.

In early 2017, Epstein was convicted of third-degree felony bribery for paying a buildings inspector to remove stop-work orders, complaints and violations on properties he owned and managed.

“Herman Epstein is a serial briber who has shown time and again that nothing — including criminal convictions — will stop him from cutting corners to make a profit,” then-Manhattan District Attorney Cyrus Vance said in a statement at the time.

An inquiry into Epstein started in 2013 and became a years-long probe by the DA’s office and the city’s Department of Investigation of bribes paid to city workers. The investigation led to the indictment of 12 Department of Buildings employees, five Department of Housing Preservation and Development workers and 34 property managers, expeditors and contractors.

Maverick has been among the most active debt acquirers in New York City. The Manhattan-based company, led by David Aviram and Ted Martell, started off acquiring debt backed by small properties across the city, but the firm’s ambitions have grown in recent years.

Earlier this year it foreclosed on Chetrit Group’s 323-key, 33-story hotel near Penn Station. Chetrit filed a lawsuit  this month alleging that the lender ran off other potential bidders so it could take control of the property at a fraction of the fair market value. Chetrit cited The Real Deal’s January profile of Maverick in his lawsuit.

Neither Maverick’s nor Epstein’s attorneys returned a request for comment. Customers Bank also did not respond.

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