Tricky Government Contracts and the Kushner Empire – Ethicists Welcome News…

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https://therealdeal.com/2017/05/10/kushner-companies-scraps-planned-orthodox-jewish-community-in-jersey-city/

Kushner Companies scraps planned Orthodox Jewish community in Jersey City

Had it been granted the $150M bid, the company could have built 8,100 homes at formerly contaminated Bayfront site

UPDATED, May 10, 12:30 p.m.: Kushner Companies was the leading bidder on an industrial site called Bayfront in Jersey City that would become home to a planned Jewish community geared toward members of Orthodox sects who are being priced out of Williamsburg, Brooklyn.

But when Bloomberg reporters asked company spokesperson James Yolles about the bid on Tuesday, Yolles said that the company already dropped any intentions it had to buy the site from Honeywell and Jersey City for $150 million. An unnamed Kushner employee also told the news site that these plans were dropped late last year, but the office of Jersey City Mayor Steven Fulop said it was unaware of this and has yet to receive any word of Kushner’s withdrawal from consideration.

It’s unclear if the Kushners decided to abandon the project for ethics reasons, but Honeywell, a Fortune 100 list conglomerate, has billions in government contracts that could prove tricky in any dealmaking tied to the Kushners. The development would likely also require federal subsidies to improve the infrastructure within and surrounding the site. “It’s a good sign that they are pulling out,” Larry Noble, general counsel of the Campaign Legal Center, told Bloomberg. “Though the question is whether or not it’s just because of the publicity or because they actually see there is a potential conflict of interest in these situations.”

In a statement to The Real Deal, Yolles said “a decision was made late last year not to pursue the project because the company was not persuaded by the economics of the deal.”

Last weekend, the company made front page news when White House senior adviser Jared Kushner’s sister Nicole promoted a Jersey City project at One Journal Square to Chinese investors. The sales pitch made mention of Kushner Companies’ ties to the White House and Nicole told the audience the project was “important” to her entire family. It was later reported that the project in question is going through a rough spot, losing an anchor tenant in WeWork and at risk of losing a key 30-year tax abatement.  [Bloomberg]  — Will Parker

 

To read the article in TheRealDeal click here.

 

See Also:

National Real Estate Investor: http://www.nreionline.com/investment/kushners-abandon-property-bid-pressures-mount-over-conflicts

Gun Licenses in Brooklyn in Exchange for Political Favors – More of Shaya Lichtenstein Investigation

LAW ENFORCEMENT, THE CRIMINAL JUSTICE SYSTEM, THE JUDICIAL SYSTEM: CRIMES COMMITTED REPRESENT AN EXISTENTIAL THREAT – LM:

A police officer trades gun licenses for money and favors thereby committing one or several crimes. He defiles the very institution of criminal justice. A Brooklyn prosecutor involved in this scheme is not only committing a crime but violating the very tenets of the legal system and his oath as an attorney.

All of this is in the name of personal gain.

Is the law enforcement officer not also rigging the job market for other police officers? Is he not manipulating the tax system used to pay the salaries of those officers?  Is the prosecutor not also potentially creating more work for himself, thereby increasing dependence upon him and the office in which he sits?

We posit that corruption within the ranks of law enforcement, the justice system, the legal profession and the supporting political system represents an existential threat to our survival and should be viewed under that lens.

LM 

The New York Times: https://www.nytimes.com/2017/04/25/nyregion/3-former-police-officers-and-a-former-prosecutor-are-charged-in-widening-corruption-investigation.html?_r=0

3 Retired Officers and Ex-Prosecutor Charged in Graft Inquiry

Three retired police officers and a former Brooklyn prosecutor were charged on Tuesday in a widening federal corruption investigation into the New York City Police Department and its gun-licensing division.

The charges revolve around a scheme in which so-called gun-licensing expediters bribed police officers in exchange for approvals of hard-to-obtain gun permits, according to two criminal complaints unsealed on Tuesday in Federal District Court in Manhattan.

The complaints also show that a former New York police sergeant, David Villanueva, and a gun-license expediter who interacted frequently with the department’s license division have pleaded guilty to bribery and other charges and are cooperating with the authorities.

The charges are the most significant development in the long-running police corruption inquiry since June, when two police commanders were arrested and accused of accepting expensive gifts from two politically connected businessmen in return for illicit favors. Sergeant Villanueva and an officer were also charged at the time in relation to the gun-licensing scheme.

The former officers charged on Tuesday were Paul Dean, who had been a lieutenant, and Robert Espinel; both had been assigned to the license division. A third defendant, Gaetano Valastro, who retired as a detective in 1999, owned and operated a store in Queens that sold firearms and related equipment and also provided firearms training courses, the complaint says.

All three men were charged with two counts of conspiracy to commit bribery; Mr. Dean and Mr. Espinel were also charged with one count of extortion and Mr. Valastro with one count of making false statements.

The former prosecutor who was charged is John Chambers, a lawyer who specialized in helping clients navigate the gun application process in both New York City and Nassau County. He was charged with bribery and conspiracy.

Mr. Chambers gave then-Sergeant Villanueva of the gun-licensing division tickets to Broadway shows, a Paul Picot watch valued at $8,000, tickets to sporting events, sports memorabilia and cash, according to a criminal complaint sworn by an F.B.I. agent. In return, Sergeant Villanueva “ensured that renewals of N.Y.P.D. gun licenses for Chambers’ clients were approved significantly faster,” the complaint charges.

Mr. Chambers was an assistant district attorney in Brooklyn in the 1980s.

The charges were announced at a news conference on Tuesday by Joon H. Kim, the acting United States attorney in Manhattan; William F. Sweeney, the head of the F.B.I.’s New York field office; and James P. O’Neill, the police commissioner. The F.B.I. has been conducting the investigation with the Police Department’s Internal Affairs Bureau since 2013.

The charges come weeks after a Brooklyn man, Alex Lichtenstein, was sentenced to 32 months in prison on charges that he paid police officials thousands of dollars in bribes to obtain expedited handgun licenses for his clients.

A Platinum/Uber Collaboration and $8M In Losses to Investors

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How several small-time investors got hosed when Uber crashed the taxi market

Unhappy about their losses the green cab owners have sued their broker and his partners for allegedly cheating them out of $8 million

When Dr. Amarpreet Singh received a tip from a patient back in 2013, he was all ears. The city was expanding its taxi fleet, the patient explained. Would he be interested in investing in cabs? “I said I’d certainly like to talk to someone about that,” recalled Singh, chief of oculo-facial plastic surgery at Harlem Hospital Center.

Singh’s patient introduced him to a taxi broker, who said the city was issuing thousands of permits for a new line of cabs, called green taxis, that would pick up passengers in the outer boroughs and upper Manhattan. Some green-taxi owners were already reaping profits of as much as $550 every week, the broker said, and it wasn’t expensive to get in on the action, because the city was offering incentives for cabs retrofitted to accommodate passengers in wheelchairs.

Singh liked the idea of helping disabled New Yorkers get around town, so he paid the broker $75,000 for five green-cab permits, plus another $325,000 for vehicles. Then he waited for drivers to rent his taxis. And waited some more. After nearly two years he got in touch with his patient to see what was up with the investment. Singh learned his cabs were lying fallow in Mill Basin, Brooklyn. He dashed over and found a parking lot filled with 600 cars, none with license plates and some not even outfitted as taxis.

“It was just a sea of green,” said Singh. “I walked out telling myself, Oh my God, what have I done?”

The collapse of the taxi business has dramatically altered New York’s streetscape. Spurred by the advent of Uber and other apps, the number of drivers looking for passengers has grown by 40%, but the surge has meant less business for cabbies, who are making 30% fewer trips than only three years ago. Those who invested in yellow or green cabs are seeing their investments wiped out as drivers flock to rivals or pursue other work and cars sit idle. Since 2013 5,000 taxi drivers have thrown in the towel, and last month Queens-based Melrose Credit Union was seized by state regulators after delinquent cab loans soared tenfold in just 18 months. The stock price of the city’s preeminent taxi lender, Medallion Financial Corp., has fallen so far that one share now costs less than a subway ride.

Among those sucked into the vortex are scores of novice investors who saw the same potential in green cabs as what yellow-taxi medallions offered decades ago: cheap investments (the first medallions sold for $10 in 1937 before peaking at more than $1 million) with yearly returns that far outpaced the stock market. But these small-time players bought green cabs just before the taxi business began its free fall. Singh is in this group along with a dozen other investors, including a home health care company president, a purchasing manager at a software firm, a vice president of sales at a printing company and a commercial real estate broker in Baltimore.

Jake Zamansky, a prominent plaintiff lawyer on Wall Street, said people need to be wary about buying into taxis and other investments that don’t have the same disclosure requirements as publicly traded stocks and bonds. “It’s imperative investors do their own due diligence or stay away,” he said.

The taxi investors are not happy about their losses and have sued in Brooklyn state court, alleging their green-cab broker and his partners cheated them out of $8 million by selling taxi permits “in the manner of a Ponzi scheme.” They also allege the defendants funneled millions of dollars’ worth of taxi money into Platinum Partners, a large hedge fund that federal prosecutors likened to a Ponzi scheme after it collapsed last year.

Billed as a slam dunk

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Williamsburg Waterfront Transformer (and all Related Companies) Sued – Investor Fraud

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Case 1:17-cv-02161-CBA-RML Document 1 Filed 04/10/17

 

DNAInfo – https://www.dnainfo.com/new-york/20170418/bushwick/real-estate-landlord-tenant-housing-scam-investors

Man Behind Williamsburg Waterfront Transformation Sued for Investor Fraud

WILLIAMSBURG — The Brooklyn developer who laid the groundwork for an explosion of residential properties along the Williamsburg waterfront ran a get-richer-quick real estate scheme for five years, conning a small group of Israeli investors out of more than $20 million, according to a Brooklyn federal lawsuit.

Instead, the duo overcharged investors Jacob Schonberg, Binyomin Schonberg, Binyomin Halpern and Raphael Barouch Elkaim hundreds of thousands of dollars for each property and funneled the extra funds into 20 “secret properties,” according to the suit filed on April 10. From those hidden assets, they collected all the rental income — an extra $90 million for themselves.

While the buildings Strulovich and Oberlander were supposed to be refurbishing sunk into neglect, accruing building violations and stop-work orders, the partners sent their investors fictitious updates to trick them  into believing things were going according to plan, and to encourage them to invest in additional properties, the lawsuit charges.

Williamsburg developer Yechezkel Strulovich and his Israeli business partner, Yechiel Oberlander, sweet-talked four well-heeled investors into sinking millions of dollars into 20 properties in Bushwick, Williamsburg, East New York, Bedford-Stuyvesant and Prospect-Lefferts Gardens, promising to fix up and manage the buildings and give the investors their money back in a matter of months, according to the suit filed on April 10. They also promised the funders a big cut of future profits.

The elaborate scam began in 2012, when Oberlander, a member of the small Orthodox Jewish community living in Israel, propositioned the four Israelis about investing in a series of Brooklyn properties, according to the suit.

They would see a full return on their investment within a matter of months, and they would reap 45 percent of the profits after that, Oberlander said, promising to take care of all the construction, renovation and property management needs.

Oberlander advertised his connection to Williamsburg developer Strulovich, whose “vision” for the Williamsburg waterfront in 1998 — which involved converting factories in loft apartments — led Crain’s New York to anoint him as one of “Brooklyn’s miracle makers.”

But in purchase after purchase, Strulovich and Oberlander lied to the investors about the sale price of the properties they’d bought, the lawsuit claims. The two charged overcharged for properties at 901 Bushwick Ave., 106 Kingston Ave. 1213 Jefferson Ave., 369 Gates Ave., 853 Lexington Ave., and 14 other locations by hundreds and thousands of dollars, the investors later found out.

All that extra money supported their “lavish lifestyles” and paid off their personal debts, the complaint claims, although much of it appears to have been funneled into the 20 “secret properties” that Strulovich and Oberlander bought with cash and loans using the investors’ properties as collateral, according to the suit.

Strulovich and Overlander led on their four marks with periodic payouts and photographs of construction sites as evidence of their project’s progress, the lawsuit claims.

The duo intentionally took advantage of the four Israeli investors and “knew that they were not United States citizens or residents, knew they were unfamiliar with the complexities of New York real estate and construction,” the lawsuit reads.

In truth, their actual properties were “languishing, unoccupied and unrenovated” and plagued with stop work orders, code violations and defaulted loan payments, the lawsuit says.

Take, for example, the commercial property at 73 Empire Blvd. in Prospect Lefferts Gardens, where the partners claimed they had paid $1M to secure control of the ground-floor commercial lease.

They actually paid far less than that, the lawsuit alleges, and they never made any repairs on the building, eventually losing a potential contract with Dollar Tree, because actual trees growing inside made the building structurally unsafe, according to the lawsuit.

Another building at 454 Central Ave. has an active stop work order, 23 open Department of Building violations and owes the city more than $130,000 in unpaid Department of Building fines, city records show. It has been cited over the years for tilting dangerously and for collecting hazardous garbage and debris inside and out, DOB violation records show.

The investors first became suspicious in the spring of 2016, after Strulovich and Oberlander took out additional mortgages on three properties they said had run out of money. Then, in February, they found out the duo was trying to sell two of their properties without telling them, raising red flags and prompting them to probe their other investments.

The investors’ attorneys at Oved Law didn’t didn’t return a request for comment.

Judah Zelmanovitz, the attorney who represented the sales of several of the buildings, according to property records, couldn’t be reached for comment.

To read the article in its original format and for access to the case file click here.

Off the Books Entitlements, Section 8, Bilking the System in One of the Most Gentrified Neighborhoods

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NY Daily News Photograph.

Hasidic neighborhood in South Williamsburg is a top beneficiary of Section 8, but some question whether law is strictly followed

From the NY Daily News

Little boys in yarmulkes peer from apartment balconies, watching the men below toss bread into a bonfire.

The annual spring ritual marks the first day of Passover in the Hasidic Jewish enclave of South Williamsburg, Brooklyn, where daily life is built on ancient laws and religious devotion. But the insular community depends on outside money to survive — federal subsidies to help many low-income Hasidic families cover the rent.

New York City’s 123,000 vouchers make this the largest Section 8 voucher program in the country. Reluctant landlords and rising rents are making vouchers nearly impossible to use in many areas of the city. Tenants, especially larger families, are often relegated to the edges of Brooklyn and the Bronx. That’s why this cluster of Hasidic households stands out.

The neighborhood is home to one of the highest concentrations of Section 8 housing vouchers in the city, according to federal data analyzed by WNYC and the Daily News. In several of its census tracts, Section 8 tenants compose more than 30% of residents, a level reached only in scattered pockets of the Bronx.

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Bribery, Guns and 32 Months

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DNA INFO

Brooklyn Businessman Sentenced to 32 Months in NYPD Bribery Scheme

MANHATTAN — A Brooklyn businessman who bribed NYPD officers in exchange for expediting gun licenses for clients was sentenced to nearly three years in prison Thursday.

Alex “Shaya” Lichtenstein, 45, had pleaded guilty to bribery and conspiracy charges after paying tens of thousands of dollars in cash bribes since 2013 to Sergeant David Villanueva in the licensing division, who then shared some of the money with Officer Richard Ochetal.

“By engaging in an egregious scheme to trade cash for gun licenses, Alex Lichtenstein and his co-defendants in the New York City Police Department corrupted the sensitive process of evaluating gun license applications in New York City,” acting Manhattan U.S. Attorney Joon Kim said.

“Today’s sentence shows that individuals who so brazenly abuse the public’s trust in law enforcement — whether they are the officers receiving bribes or the citizens paying them — will be held to account for their crimes.”

Lichtenstein — who served as the leader of the Borough Park neighborhood patrol, Shomrim — made off with between $150,000 to $250,000 from his clients, some of whom had criminal convictions and a history of domestic violence.

He was finally banned from the licensing division in 2016 after rumors spread about his client fees and he then tried to bribe another officer who recorded the Brooklyn businessman offering a $6,000 bribe.

Lichtenstein was also sentenced to three years of supervised release and was ordered to forfeit $230,000.

TO READ THE ARTICLE IN ITS ENTIRETY CLICK HERE.

A Platinum Story -de Blasio Unscathed

 

The Real Deal

De Blasio won’t face federal, state charges in fundraising probe

News comes just days after Preet Bharara was fired

Mayor Bill de Blasio won’t be facing federal or state criminal charges for fundraising activities tied to his now defunct Campaign for One New York, officials announced on Thursday.

“After careful deliberation, given the totality of the circumstances here and absent additional evidence, we do not intend to bring federal criminal charges against the Mayor or those acting on his behalf relating to the fundraising efforts in question,” acting U.S. Attorney Joon Kim announced on Thursday.

The investigations hinged on whether de Blasio solicited donations from developers and others who had business before the city in exchange for political favors. In October, the New York Time’s reported that Jona Rechnitz, the real estate developer at the center of the NYPD corruption scandal, was cooperating with authorities. The mayor was accused of giving a retired police official a high-level position in his administration after Rechnitz called him and requested the appointment as a “personal favor.” The federal investigation was conducted by the Manhattan U.S. Attorney’s Office and the FBI. The Manhattan District Attorney’s Office led the state probe.

In his announcement, District Attorney Cyrus Vance stated that there wasn’t enough evidence to prove that the mayor violated state election laws in his efforts to help Democrats take over the Republican-controlled state Senate. The investigation focused on whether he wrongfully sidestepped contribution limits to individual candidates by directing donations to upstate county committees. Vance said, however, that the actions “appear contrary to the intent and spirit of the laws that impose candidate contribution limits.”

Kim noted the unusual nature of announcing that his office wouldn’t pursue criminal charges, saying that, in this case, it was appropriate to not “unduly influence the upcoming campaign and Mayoral election.” The announcement comes just a few days after President Donald Trump fired Preet Bharara from his post as U.S. Attorney for the Southern District of New York.

The decision not to prosecute clears what was a black cloud over the mayor’s re-election campaign. It remains to be seen if potential Democratic challengers who were waiting on the sidelines as the investigation dragged on will now step aside. Meanwhile, Republican mayoral candidate and Cushman & Wakefield executive Paul Massey announced Wednesday that he raised twice as much as de Blasio since Jan. 12.

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