Real estate developer Yair Levy is no longer allowed to sell apartments Downtown or anywhere else in New York State, per a June 29 State Supreme court case won by State Attorney General Eric Schneiderman.
In May, Levy was found guilty of defrauding apartment owners and tenants in the Rector Square Condominium, at 225 Rector Place, by depleting the condominium’s reserve fund that is supposed to be used for much-needed major capital improvements to the building.
Schneiderman discovered that Levy used money from the fund to pay off his car lease, credit card bill and other personal and business expenses. Levy also reportedly left Rector Square residents without heat and hot water during winter 2008-9.
As a result, the A.G. has ordered Levy to pay the condominium a $7.4 million award in restoration funds and the state several hundred thousand dollars in civil violations and discretionary allowances.
“The state of New York has no tolerance for the kind of fraud perpetrated by Yair Levy,” said Schneiderman. “With [the recent] judgment, Yair Levy is out of business, and tenants and homebuyers in New York are more secure without this predator in the marketplace.”
Marc Held, the attorney representing the condominium owners in an ongoing $100 million law suit against Levy in 2009, praised the A.G.’s decision, saying Schneiderman “has now taken extraordinary action against the Sponsor, Yair Levy, by banning the Sponsor from ever selling real estate again. It is the hope and expectation that Mr. Levy will improve the finances of the condominium by making restitution to the unit owners for what was done to them.”
After converting the building’s rental apartments into condominiums, Levy, Held said, sold one-quarter of the units and then left the residence in deplorable conditions for months — the lobby had unfinished, concrete walls, the hallways lacked lighting and the pool and other common areas were closed.
Rector Square Condominium residents weren’t available for comment.
“The unit owners have previously faced extraordinarily difficult and unprecedented living conditions and financial challenges in a condominium conversion that was supposed to be their dream home,” Held said on behalf of the residents.
The bank that was financing the building subsequently foreclosed it and ceded control of the building to a court-appointed receiver, who performed the necessary capital improvements to the building before Related Companies purchased the remaining apartment units last January.
Levy is planning on appealing the A.G.’s decision, according to Crain’s New York Business. Levy’s attorney, Starr Associates partner Andrea Roschelle, didn’t return calls for comment.
— Aline Reynolds
