Nearly 20 limited liability companies for individual multifamily buildings that are linked to a federal fraud complaint are now bankrupt.
The filings late last month in a U.S. bankruptcy court in White Plains also relate to over a dozen foreclosure cases initiated by an affiliate of Maverick Real Estate Partners, which in court filings is seeking information on the identity of the owner behind the low-rise, residential properties, all of which are scattered throughout Brooklyn.
In April 2017, Israeli investors Jacob and Binyomin Schonberg, Binyomin Halpern and Raphael Barouch Elkaim alleged in a complaint filed in federal court in Brooklyn that Yechezkel Strulovich and Yechiel Oberlander defrauded them out of more than $20 millionin a scheme carried out “in the style of Bernie Madoff.”
Eleven properties that are now in Chapter 11 proceedings — located predominantly in the neighborhoods surrounding Williamsburg and Crown Heights — were also named as defendants in the fraud case against Strulovich and Oberlander. That case, which a judge dismissed in part and sent to arbitration in 2017, included more than 40 defendants, mostly LLCs that have not filed for bankruptcy.
The LLCs that are bankrupt and own the underlying Brooklyn properties all list David Goldwasser of GC Realty Advisors as their authorized signatory, according to court filings. GC Realty is described as a commercial real estate advisory firm, per its LinkedIn page, which notes that it is based in Boca Raton, Florida, and has offices in New York. The state’s Division of Corporations shows that GC Realty has an address in East Midwood, Brooklyn.
Goldwasser is also listed as a principal at FIA Capital Partners, which is also based out of Florida and New York, according to his apparent LinkedIn profile.
A message left with FIA was not returned by the time of this story. The firm specializes in acquiring distressed properties and portfolios, according to its website.
Questions over control
The series of bankruptcies filed in White Plains starting on May 20 show that all of the properties, which number at least 18, are also affiliated with 73 Empire Development LLC. The latter owns the ground lease on a roughly 30,000-square-foot development site — it’s currently a vacant one-story retail building — at 73 Empire Boulevard in Crown Heights.
Empire Development, which is one of the defendants in the fraud case against Strulovich and Oberlander, also filed for bankruptcy in February. The debtor’s plan, according to court records in White Plains, is to build a 58,000-square-foot, two-story retail property at 73 Empire Boulevard.
But the connection between Goldwasser’s GC Realty, Empire Development and the 18 other bankrupt properties is not yet clear. Maverick, the debt fund led by David Aviram that buys distressed mortgages, wants some clarity on the matter.
A recent filing from the debtors claims that one of Maverick’s affiliates, Brooklyn Lender LLC, took on 13 notes and mortgages — totaling $36 million — on 26 properties that originated with Signature Bank. As a result of the Chapter 11 filings, Maverick wants a judge to allow a full examination into who controls the various debtors, pointing to Goldwasser’s name in court documents.
“To Brooklyn Lender’s knowledge, Goldwasser was not previously involved with the Debtors, and understanding his new role and responsibilities with respect to these Bankruptcy Cases and the Debtors’ management is of paramount importance,” Maverick said in a recent filing.
Maverick noted that when the Signature Bank loans were made, Strulovich maintained that he was the 100 percent sole member of the debtor entities. In the fraud case, however, he admitted this was not the case. In October 2017, Maverick’s Brooklyn Lender filed 14 foreclosure cases against the now bankrupt properties, alleging that the loans were in default, in part due to misrepresentations by their owners.
The petition made by Maverick in bankruptcy court now asserts that a further examination is needed to determine who actually owns the Brooklyn properties, citing a guilty plea by Goldwasser to defrauding two banks in the early 2000s. Goldwasser was sentenced to 27 months in federal prison — Federal Bureau of Prisons records show he was released in September 2005 — and ordered to pay $2.8 million in restitution. A judge also ordered that Goldwasser “is not to be employed in any position requiring fiduciary responsibilities.”
All of the debtors in the bankruptcy cases, except Empire Development, have opposed the motion by Brooklyn Lender, claiming that its parent Maverick has an “unspoken agenda” and that they are working on a plan that includes paying back Maverick. Lists of unsecured creditors in the various bankruptcy cases show that Brooklyn Lender is owed between $2.7 million and nearly $5 million, while the New York-based law firm Abrams Fensterman is owed a little more than $150,000.
Mark Frankel, an attorney with New York’s Backenroth Frankel & Krinsky representing the debtors in bankruptcy proceedings, declined to comment, as did Maverick’s Aviram, which is being represented in bankruptcy court by Stroock & Stroock & Lavan. Strulovich and Oberlander could not be reached and their lawyers did not return requests for comment.
Unresolved fraud claims
In the fraud case against Strulovich and Oberlander, the defendants said that the money they received from the plaintiffs would be invested in Brooklyn properties that they would buy, develop and rent out, with returns on those investments coming in six to seven months. The plaintiffs also would receive 45 percent of the profits from the multifamily purchases.
But plaintiffs claimed that Strulovich, Oberlander and other defendants inflated the value of that real estate and used their money to acquire and develop properties for their own personal benefit, pay off personal debts and support their “lavish lifestyles,” according to the civil complaint filed two years ago. The Brooklyn sites purchased with their funds were “left to languish, undeveloped and dilapidated,” alleged the plaintiffs.
“The entire process was nothing more than an elaborate fraud to personally enrich the individual defendants,” said their lawsuit.
Court filings in that litigation claim that Oberlander allegedly approached the plaintiffs in early 2012 about investing in a project with him and Strulovich at 908 Bergen Street in Crown Heights. Oberlander sent prospectuses for 19 properties between 2012 and 2014 that were meant to entice the plaintiffs into make more investments, they asserted in the dispute.