REENA RAGGI, UNITED STATES DISTRICT JUDGE
By letter dated February 28, 2002 but recently received by this court, pro se plaintiff Kevin Watkins requests the production without cost of transcripts from the proceedings on the following dates: August 20, 1999, March 24, 2000, April 18, 2000, and May 16, 2000. Since plaintiff has not shown a specific need for these transcripts, the court denies his request without prejudice.
Portions of the court file in Drew Plaza Tenants Association, Inc. v. Linden Realty Associates, No. 95-CV-5238 (SJ), are now available for plaintiff's review to assist him in the preparation of his amended complaint. Mindful of the difficulties plaintiff has experienced in obtaining a copy of the complaint, the court attaches a copy of the body of the complaint, without the voluminous attachments, for plaintiff's convenience. If plaintiff wishes to review the attachments, he may do so in the Clerk's Office.
Plaintiff is hereby ordered to file his amended complaint on or before May 1, 2002. If plaintiff fails to file his amended complaint within that time, the case will be dismissed for failure to prosecute. No applications for extensions of that deadline will be entertained.
ATTACHMENT 1
ATTACHMENT 2
UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK
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DREW PLAZA TENANTS ASSOCIATION, INC., A. ANDERSON, OZELLER ATKINS, TAMMY BENNETT, DENISE BETHEL, ANDREA BOOTHE, CHRISTINE BOWERS, MELISSA BROWN, OLIVE BROWN, TABATHA BROWN, TONYA BROWN, CHARLENE BURWELL, JOE BYNUM, FELICIA CHEATHAM, CATHERINE COLEY, DONNA CREWS, RENEE DASENT, MARIE DAVIS, ANNIE DEESE, YVETTE DOZIER, ARZELIA EVERETT, TANYA FARROW, BESSIE FORD, DEBORAH GORDON, CYNTHIA JACKSON, ADRIENNE JOHNSON, JOAN JOHNSON, MERINA JOHNSON, LORETTA JONES, FANNIE KEYES, CAROL LYBS, YVETTE MAXWELL, AMANDA NEAL, MARTHA NIMMONS, HARRIET PETERSON, ROLANDA RODRIGUEZ, DAVID SYKES, FRANCIA TORRES, RACHEL WASHINGTON, CHERYSE WILLIAMS, MARGARET WILLIAMS, BARBARA ALLEN, ELAINE ALLEN, JOSEPH BENJAMIN, VICTORIA BLACKMAN, CRYSTAL BROWN, HORTENSE BRYANT, VALERIE COLSON, ANGELA DAVIS, EDWIN DAVIS, TANYA DAVIS, PEARL FISHER, MONIQUE GAVIN, ALICE GILLMAN, LAKISHA JOHNSON, JACQUELYNE NEVINS, MAYRA PADUANI, STEFANIE RACKS, HAWAA RAHEEM, BEATRICE SAVON, RAMONA SMALLS, DEBORAH SMITH, VIOLA SMITH, DEBORAH SYKES, VIRGINIA TAYLOR, GERTRUDE UPSHUR, DEMETRIA WALKER, DEBORAH WASHINGTON, SHAMIKA WEBB, VANESSA WILLIAMS, CARRIE WILSON, TABATHA WILSON, SANDRA ABMAN, LAQUITIA BROOKS, JUANITA BROWN, NICOLE BURT, ALMA BYRD, COMPLAINT LATISHA CAMPBELL, GWENDOLYN DAVIS, LENORA EVANS, DELORES FIELDS, JOSHIE FORD, JULIET 95 CIV () FREEMAN, BETTY GARNER, O'NEILL GOVAN, KATRINA GRAVES, JANET JAMES, MINYAN JOHNSON, NICOLE JOHNSON, SAMANTHA JOHNSON, STELLA LAROC, ALTHEA LEVY, VIOLA LOVELL, VERA MARSHALL, ERNESTINE MCKAY, BELLA NETBURN, GIRTHA PIERRE, MICHELLE ROBINSON, VERTELL ROBINSON, YVONNE THORNTON, SHARON WALKER, M. WASHINGTON, SHARON WEST, TIWANNA YOUNG, SEDRENA AUDRAIN, CLAUDETTE BOYD, FARIES BRABHAN, ANGELINA BROWN, ELOISE CAMPBELL, KYHOZAMA COATES, ETHEL DENNIS, VERONICA DONTZLER, CLARETHA FIELDS, VERONICA FIELDS, BEVERLY FREEMAN, PEARL GRAHAM, ROBIN HAMILTON, FRANCES JACKSON, ANGIE JOHNSON, VICTOR JOSEPH, ANGELA MERRITT, BARBARA MERRITT, GWENDOLYN MERRITT, PINNCOLA MERRITT, LILLIAN PIERCE, MARGARITA PITTMAN, PATRICIA REESE, CHRISTINE SANDERS, MARIA SCOTT, LILLIE SMITH, LEROY TOWNES, ROBERTA TOWNS, MONICA WILLIAMS, DELEMIA ZAPATA, DENISE BETHEL, EGLANTINE CLARKE, CYNTHIA DAVIS, CYNTHIA DENNIS, ELSIE FINNEY, JACQUELINE LEAK, SHIRLEY LECKEY, HENRIETTA MONK, NORMA MOSLEY, JAMES PERRY, CLAUDETTE ROBINSON, BETTY STEVENS, WILLIAM TOTLE, BETTY VEREEN, PETILLA BROWN, CLEVELAND JONES, ANNIE KELLEY, V. SUKER-BEY, MILADYN TORRES,
Plaintiffs,
-against-
LINDEN REALTY ASSOCIATES, LEON MOCHKIN (a/k/a JUDAH MOCHKIN), RAP-FISH REALTY, INC., BERNARD RAPAPORT, CHAIN FISCHMAN, ALEXANDER ASSOCIATES and ALEXANDER SCHACTER,
Defendants,
-and-
UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT and NEW YORK CITY DEPARTMENT OF HOUSING PRESERVATION AND DEVELOPMENT,
Co-Defendants.
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Plaintiffs, by their attorneys MARTIN S. NEEDELMAN, ESQ. and PAUL J. ACINAPURA, ESQ., BROOKLYN LEGAL SERVICES CORPORATION "A", RICHARD J. WAGNER, ESQ. and JIM PROVOST, ESQ., of counsel, complaining of the defendants, alleges as follows:
PRELIMINARY STATEMENT
1. This is an action for permanent injunctive relief and monetary damages against the private owners and managers of Noble Drew Ali Plaza, a federally subsidized housing project located in the Brownsville section of Brooklyn, New York. This action seeks, inter alia, a) to permanently enjoin, pursuant to 18 U.S.C. § 1964 (a), the private defendants from exercising any managerial and/or operational and/or financial control of Noble Drew Ali Plaza, now or in the future, b) to compel the private defendants to make full monetary restitution to the project's account of all monies unlawfully or improperly taken or used by or distributed to private defendants for other than permissible purposes and to pay, as damages, treble the amount diverted and used, c) to permanently prohibit private defendants from owning and/or operating and/or managing publicly assisted or subsidized housing, and d) to obtain the appointment of a receiver pendente lite, or in the alternative, an Administrator pursuant to New York's Real Property Actions and Proceedings Law (RPAPL) § 770, et seq., to operate and manage said project until such time as the premises are restored to decent, safe and sanitary condition.
2. The United States Department of Housing and Urban Development (HUD) is named as a co-defendant herein for the reason that HUD is the mortgagee of the subject premises, as well as the contract vendee of the subsidy payment contract with the defendant Linden Realty Associates, and as such is a necessary party to this action.
3. The co-defendant New York City Department of Housing Preservation and Development is named as a necessary party to an action or proceeding seeking the appointment of an Administrator pursuant to RPAPL § 771.
JURISDICTION
4. Jurisdiction is conferred upon this court by 42 U.S.C. § 1343 (3) and (4) and by 18 U.S.C. § 1964 (a) and 28 U.S.C. § 1331 and 1337.
5. Supplemental jurisdiction is invoked pursuant to 28 U.S.C. § 1367.
PARTIES
Plaintiffs:
6. DREW PLAZA TENANTS ASSOCIATION, INC. (hereinafter, the "Tenants' Association") is a Not-for-Profit corporation whose members are solely composed of tenants of 37 New Lots Avenue, 250 Lott Avenue, 23-25 New Lots Avenue, 230 Lott Avenue, and 240 Lott Avenue, Brooklyn, New York which comprise Noble Drew Ali Plaza (hereafter Noble Drew).
7. The individual plaintiffs are tenants of 37 New Lots Avenue, 250 Lott Avenue, 23-25 New Lots Avenue, 230 Lott Avenue, and 240 Lott Avenue, Brooklyn, New York and comprise more than one-third (1/3) of the tenants of occupied apartments at Noble Drew. All are recipients of Section 8 rental assistance from the United States Department of Housing and Urban Development (HUD), and all are the third-party beneficiaries of the Housing Assistance Payment (HAP) contract and Regulatory Agreement between HUD and defendant Linden Realty Associates.
Defendants:
8. Defendant LINDEN REALTY ASSOCIATES (hereinafter, "Linden") is a partnership which is the owner of the subject premises and is registered as such with the New York City Department of Housing Preservation and Development (HPD) pursuant to Article 2 of the New York City Administrative Code. Linden receives Section 8 rental assistance from HUD on behalf of the individual plaintiffs and is the beneficiary of a below-market interest rate mortgage held by HUD.
9. Defendant LEON MOCHKIN (a/k/a JUDAH MOCHKIN) is a general partner of the owner and holds a 58 percent interest therein. He maintains offices at 37 New Lots Avenue, Brooklyn, New York.
10. Defendant RAP-FISH REALTY, INC. (hereinafter "RAP-FISH) is a general partner of the owner and holds a 42 percent interest therein. Upon information and belief, defendant BERNARD RAPAPORT is the president and defendant CHAIM FISCHMAN is the vice president of Rap-Fish which maintains offices at 2 West 47th Street, New York, New York.
11. Upon information and belief, defendant ALEXANDER ASSOCIATES and defendant ALEXANDER SCHACTER are the managing agents of the premises and maintain offices at 232 East 58th Street, New York, New York.
12. Upon information and belief, all of the above defendants are owners within the meaning of New York City Administrative Code § 27-2004(a) (45) and New York State Multiple Dwelling Law (MDL) § 4.
13. Co-defendant UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD) is the mortgagee of the subject premises and regulates the subject premises pursuant to various federal laws and regulations, as well as a Housing Assistance Payment (HAP) Contract and the Regulatory Agreement with Linden. Co-defendant HUD is a necessary party to this action due to its interest in and regulatory oversight of Noble Drew and pursuant to the New York State Real Property Actions and Proceedings Law (RPAPL) § 771.
14. Co-defendant DEPARTMENT OF HOUSING PRESERVATION AND DEVELOPMENT OF THE CITY OF NEW YORK is the agency charged with enforcement of the New York City Housing Maintenance Code and other New York City and State laws, standards and regulations concerning the maintenance and quality of housing within the City of New York and is a necessary party to this action pursuant to RPAPL § 771.
STATUTORY AND REGULATORY FRAMEWORK
15. The Section 8 program is intended to aid "lower-income families in obtaining a decent place to live", 42 U.S.C. § 1437f, as well as to further the purpose of the National Housing Act, to wit "the realization as soon as feasible of the goal of a decent home and suitable living environment for every American family." 42 U.S.C. § 1441, 1441(a).
16. To effectuate these statutory goals HUD provides, among other benefits, mortgage insurance or direct mortgages to the private sector at below-market rates for the development or purchase and the maintenance of low-income housing for the duration of the mortgage. MUD also provides Section 8 rental assistance on behalf of tenants of such housing in the form of monthly payments to the owner of that portion of each tenant's contract (total market rate) rent that exceeds 30% of said tenant's adjusted gross income. HUD regulates this housing through a Regulatory Agreement with the owner and a Housing Assistance Payment (HAP) Contract that provides for the payment of the Section 8 rental assistance on behalf of the eligible tenants.
17. Once an eligible person becomes a tenant of an apartment with Section 8 rental assistance attached they are legally entitled that the premises be maintained in decent, safe and sanitary condition and to continue to occupy the apartment and to receive rental assistance as long as they remain categorically eligible therefor. They cannot be deprived of this entitlement, in which they have a property interest, without due process.
18. HUD, through the HAP Contract and Regulatory Agreement, imposes upon private owners the duty inter alia, to determine individual tenant eligibility, select tenants, determine the amount of the rental subsidy for each tenant, provide services and maintain the premises in compliance with HUD regulations and procedures and in accordance with state and local law. The owner, in this role, is a "government actor" as a matter of law.
19. In addition, New York City and New York State law set minimum standards for all multiple dwellings (three or more units) within the City of New York which include, but are not limited to, the New York City Building Code (New York City Administrative Code §§ 27-101 et seq.), the New York City Housing Maintenance Code, (New York City Administrative Code §§ 27-2001 et seq.) the New York City Electrical Code (New York City Administrative Code §§ 27-3001 et seq.) and Multiple Dwelling Law §§ 78, 79 and 80 which establish an owner's duty to maintain multiple dwellings in "good repair", "provide adequate heat" and "keep all and every part of a multiple dwelling . . . clean and free from vermin, dirt, filth, garbage or other things or matter dangerous to life and health."
20. New York State Law also implies in every lease agreement, either written or oral, between landlords and tenants, a warranty that the premises so leased or rented and all areas used in connection therewith in common with other tenants or residents are fit for human habitation and for the uses reasonably intended by the parties and that the occupants of such premises shall not be subjected to any conditions which would be dangerous, hazardous or detrimental to their life, health or safety. Real Property Law § 235(b).
STATEMENT OF FACTS
21. Noble Drew Ali Plaza is a 383 unit low-income housing project located in the Brownsville section of Brooklyn, New York.
22. Noble Drew is comprised of two (2) multiple dwellings at 37 New Lots Avenue (with street addresses 37 New Lots Avenue and 250 Lott Avenue) and 11 New Lots Avenue (with street addresses 23-25 New Lots Avenue, 230 Lott Avenue, and 240 Lott Avenue). Upon information and belief, the rents for said apartments are as follows: Unit Type No. of Units Monthly Rent One bedroom 87 $586.00 Two bedrooms 186 $676.00 Three bedrooms 59 $749.00 Four bedrooms 52 $828.00 Total monthly rent potential: $263,965.00 Total annual rent potential: $3,167,580.00 23. Noble Drew receives subsidies from the United States Department of Housing and Urban Development (hereafter HUD) through the Section 8 Housing Assistance Program for the Disposition of HUD Owned Projects, 24 C.F.R. § 886.301, et seq.
24. In or about November, 1988, in an agreement "so ordered" by this court, HUD approved the sale (Transfer of Physical Assets) of Noble Drew to defendant Linden Realty Associates. The terms of the sale included,inter alia, that Linden would:
(a) assume the existing $1.8 million principal on the project's mortgage;
(b) cure mortgage delinquencies of approximately $800,000.00 (which HUD reduced from $2,336,728.70) pursuant to a schedule over three (3) years;
(c) execute a note in the amount of $2,308,677.00, secured by a second mortgage on the property, to secure HUD's claims for the recovery of alleged overassistance against the prior owner;
(d) perform major repairs within six (6) months of taking title pursuant to a "Management Improvement and Operating (MIO) Plan" secured by a $1.4 million letter of credit obtained by Linden which could be reduced, with HUD approval, as repairs progressed.
25. Upon information and belief, in reliance upon Linden's commitment to perform the work contained in the MIO Plan, HUD agreed to initially suspend Linden's obligation to maintain and contribute to a Reserve for Replacement Fund.
26. Linden also agreed, and subsequently did enter into a HAP Contract and Regulatory Agreement with HUD.
27. Linden is obligated pursuant to HUD regulations and standards and has agreed pursuant to the HAP Contract and Regulatory Agreement, inter alia to:
(a) maintain Noble Drew in decent, safe and sanitary condition. 24 C.F.R. § 886.307, 886.318, 886.323; HAP Contract (Amendment) Section 14; Regulatory Agreement § 7;
(b) rent apartments only to eligible families. 24 C.F.R. § 886.329; HAP Contract (Amendment) Section 12;
(c) submit financial and operating statements to HUD detailing the use and/or distribution of project funds. 24 C.F.R. § 886.318 (d); Regulatory Agreement § 9(e); HUD Handbook 4370.2;
(d) deposit all rents and other receipts of the project into a bank account in the name of the project and use these monies only for project expenses and the distribution of "surplus cash" as declared in an Annual Audited Statement after all other expenses of the project have been met. Regulatory Agreement §§ 6(c), 9(e), 9(g) and 13(f);
(e) submit requests for housing assistance payments from HUD on behalf of individual tenants. HAP Contract (Amendment) Section 9;
(f) maintain a Reserve for Replacement Fund to fund replacement of structural elements and mechanical equipment. Regulatory Agreement § 2;
(g) annually review tenant eligibility, redetermine (recertify) the amount of Section 8 rental assistance paid by HUD on behalf of each tenant based upon their household income and composition. 24 C.F.R. § 886.318 (a)(6), (7), 886.324; HAP Contract (Amended) Section 15; and
(h) transfer assisted tenants to an appropriate size unit upon change in household composition when said unit becomes available. Priority must be given over applicants on the owner's waiting list seeking the same size unit. 24 C.F.R. § 886.325.
28. At the time the sale was approved Noble Drew was managed and operated by a receiver appointed by the Federal Court pursuant to an action brought by tenants against the prior owner and HUD for their failure to maintain the project in decent, safe and sanitary condition. The sale, however, was contingent upon HUD securing the termination of the receivership.
29. Although the tenants initially opposed HUD's motion to relieve the receiver they later agreed since Linden pledged that ample resources would be dedicated to renovating Noble Drew that had not been available to the receiver.
30. Linden assumed ownership of Noble Drew Ali Plaza in or about December, 1988 and, upon information and belief, within five (5) months Linden had defaulted on its mortgage and HUD began to withhold mortgage and tax escrow fund payments from the monthly Section 8 payments to the project account.
31. In June and July, 1989 MUD conducted a physical inspection and management review of Noble Drew Ali Plaza which resulted in the project receiving HUD's lowest possible overall rating of "unsatisfactory". HUD specifically determined that Linden:
(a) placed HUD's security interest in jeopardy by withholding mortgage payments or willfully failing to maintain the property;
(b) violated equal housing laws or seriously violated the regulatory agreement;
(c) used policies and procedures that were ineffective or lacking, resulting in frequent findings of a general failure to comply with HUD requirements.
32. The report also found that defendant Leon Mochkin paid himself, his son Shimon Mochkin and another individual, Steve Katz, $10,000.00 in management fees over a one (1) month period in excess of the maximum allowable fee paid to Alexander Associates, the managing agent of record.
33. Upon information and belief, the individual named as the managing agent, Alexander Schacter, exercised no actual physical control or oversight over Noble Drew but was a participant in Linden's financial operation and management of the project.
34. Upon information and belief, at least two (2) other inspections and management reviews have been conducted by HUD since Linden assumed ownership which resulted in "below average" ratings.
35. Upon information and belief, since 1991 Linden has failed and refused to file an Annual Audited Statement with HUD which details the income, expenditures and distributions of project funds. Moreover, Linden failed and refused to submit monthly financial statements to HUD as it was required to do.
36. Upon information and belief, many major repairs called for by the MIO have never been performed or completed despite private defendants false and fraudulent representations to HUD that they have been satisfactorily implemented. Upon information and belief, in reliance upon private defendants' false and fraudulent representations that all MIO item had been completed, HUD authorized the release and discharge of the entire amount pledged in the letter of credit securing the repairs.
37. Upon information and belief, MIO items that were not completed include but are not limited to the following:
(a) four (4) of the nine (9) elevators have been inoperable since Linden took title and the other five (5) elevators have been in constant disrepair;
(b) most apartments have not been plastered or painted;
(c) while lobby entrance doors were replaced they were not maintained and door locks have only been operable for a few months in the past six (6) years;
(d) mechanical ventilators have not been replaced and all remain inoperable;
(e) fire escapes were not scraped of loose paint and rust before painting;
(f) sewer lines were not cleared and maintained clear;
(g) damaged kitchen cabinets have not been repaired or replaced;
(h) most apartments needing repair or replacement of ranges and refrigerators have not received them or received defective appliances;
(i) effective extermination services have not been made available;
(j) defective bath fixtures have not been repaired or replaced;
(k) seating benches have not been repaired or replaced;
(l) lawns and plantings have not been maintained;
(m) window screens have not been installed.
(n) parking areas have not been repaved and remain closed to tenants even though the approved rent levels were based in part on parking being provided to tenants at no additional cost;
38. Upon information and belief, housing code violations of record at the time that Linden took title were not removed nor systematically addressed and heat and hot water have not been consistently maintained as required by law.
39. Upon information and belief, drug dealing and other crimes occur on project grounds on a daily basis in full view of project managers and security personnel and no attempt is made to stop, discourage, prevent or report such crimes.
40. In addition, there remain 1,604 violations of record of the New York City Housing Maintenance Code. of these 158 are classified as "C" (Immediately Hazardous) violations that are required to be corrected within 24 hours and 1,122 are classified as "B" (Hazardous) violations that are required to be corrected with 30 days.
41. Upon information and belief, many more conditions exist in plaintiffs' individual apartments and the common areas of the project that were not the subject of governmental inspections and which are listed in the check lists appended hereto and made a part hereof.
42. Upon information and belief, the above described conditions existing within the apartments and common areas of Noble Drew, are dangerous and hazardous to the life, health and safety of the individual plaintiffs and their families and have existed for more than five (5) days.
43. Private defendants LINDEN REALTY ASSOCIATES, LEON MOCHKIN (a/k/a JUDAH MOCHKIN), RAP-FISH REALTY, INC., BERNARD RAPAPORT, CHAIM FISCHMAN, ALEXANDER ASSOCIATES and ALEXANDER SCHACTER have maintained a course of conduct of continued deprivation of services and other acts dangerous and hazardous to the life, health and safety of the plaintiffs, other tenants and their families since having taken possession of Noble Drew.
44. Private defendants LINDEN REALTY ASSOCIATES, LEON MOCHKIN (a/k/a JUDAH MOCHKIN), RAP-FISH REALTY, INC., BERNARD RAPAPORT, CHAIM FISCHMAN, ALEXANDER ASSOCIATES and ALEXANDER SCHACTER owe a statutory and contractual duty to plaintiffs and their families to provide them with a decent, safe, secure and sanitary place to live.
45. Upon information and belief, private defendants have failed and refused, since at least 1991, to submit any accounting of their use of project funds to HUD as they were obligated to do pursuant to the Regulatory Agreement and federal regulations.
46. Upon information and belief, private defendants have failed and refused to submit these audited statements and other accountings to HUD in order to conceal their unlawful conversions, misappropriation and diversion of project funds in violation of federal criminal statutes as well as the HAP Contract, Regulatory Agreement and the law.
47. Upon information and belief, private defendants have been unjustly enriched by their misuse and misappropriation of project funds consisting of plaintiffs' rent payments and the payment of Section 8 rental assistance by HUD, made on plaintiffs' behalf.
48. Paragraph 6(c) of the Regulatory Agreement, of which individual plaintiffs are third party beneficiaries, provides that any unauthorized distribution of project assets or income "shall be held in trust" by the owner.
49. Private defendant LINDEN REALTY ASSOCIATES is an "enterprise" as defined in 18 U.S.C. § 1961 (4) and defendants LINDEN REALTY ASSOCIATES, LEON MOCHKIN (a/k/a JUDAH MOCHKIN), RAP-FISH REALTY, INC., BERNARD RAPAPORT, CHAIM FISCHMAN, ALEXANDER ASSOCIATES and ALEXANDER SCHACTER are a group of individuals "associated in fact" and therefor an enterprise as defined by said section.
50. By virtue of their participation in Federal housing programs and receipt of federal funds, the above enterprises have engaged in or affected interstate commerce within the meaning of 18 U.S.C. § 1962 (a) from on or about December 1988 through and including the present.
51. Upon information and belief, private defendants have participated as principals in said enterprises within the meaning of 18 U.S.C. § 2.
52. Private defendants LEON MOCHKIN (a/k/a JUDAH MOCHKIN), RAP-FISH REALTY, INC., BERNARD RAPAPORT, CHAIM FISCHMAN, ALEXANDER ASSOCIATES and ALEXANDER SCHACTER are all persons within the meaning of 18 U.S.C. § 1961 (3).
53. Plaintiffs are persons within the meaning of 18 U.S.C. § 1961 (3).
54. Upon information and belief, from in or about December 1988 through and including the present, defendants LINDEN REALTY ASSOCIATES, LEON MOCHKIN (a/k/a JUDAH MOCHKIN), RAP-FISH REALTY, INC., BERNARD RAPAPORT, CHAIM FISCHMAN either personally or through their employees and/or agents conspired to and did knowingly:
(a) mail, or transmit by facsimile or other electronic transmission, regular monthly applications for Section 8 rental assistance on behalf of individual plaintiffs to HUD which falsely certified that apartments and common areas at Noble Drew were in decent, safe and sanitary condition;
(b) that each application for Section 8 rental assistance described above resulted in the transfer of money from the Treasury of the United States to defendants or to the project account by means of the mail and/or by electronic transfers of funds between banks;
(c) mail, or transmit by facsimile or other electronic transmission, written assurances to HUD that repairs had been done or were being done in response to HUD inspections when said repairs had, in fact, not been done and were not in the process of being done;
(d) mail, or transmit by facsimile or other electronic transmission, written claims and assurances to HUD concerning management practices and maintenance routines and procedures used at Noble Drew that were not, in fact, used or followed; and
(e) make unauthorized distributions of project funds, other than surplus cash, to themselves or to others in the form of checks or other financial instruments that resulted in electronic transfers of project funds to accounts controlled by defendants or by others.
55. Upon information and belief, defendants LINDEN REALTY ASSOCIATES, LEON MOCHKIN (a/k/a JUDAH MOCHKIN), RAP-FISH REALTY, INC., BERNARD RAPAPORT, and CHAIM FISCHMAN either personally or through their employees and/or agents conspired to and did knowingly conceal their diversions of project funds by their written refusal, on pretextual grounds, to submit Annual Audited Statements and/or other accounting of their use of project funds to HUD. Upon information and belief, said writing was mailed, or transmitted by facsimile or other electronic transmission to HUD.
56. Each of the above knowingly false communications with HUD and each transfer of funds by HUD to defendants in reliance upon those communications and each unauthorized distribution of project funds constitutes a mail fraud in violation of 18 U.S.C. § 1341 and/or a wire fraud (electronic transfer of funds between banks) in violation of 18 U.S.C. § 1343 and together constitute a pattern of racketeering activity as defined by 18 U.S.C. § 1961 (1)(B) and (5).
57. Upon information and belief, defendants ALEXANDER SCHACTER and ALEXANDER ASSOCIATES aided, abetted, assisted and/or facilitated the commission of these acts by serving as agent for LINDEN REALTY ASSOCIATES and were employed or associated with the enterprises and did conspire and collude with defendants LINDEN REALTY ASSOCIATES, LEON MOCHKIN (a/k/a JUDAH MOCHKIN), RAP-FISH REALTY, INC., BERNARD RAPAPORT, and CHAIM FISCHMAN in the conduct of the affairs of LINDEN REALTY ASSOCIATES and of their association in fact through a pattern of racketeering activity within the meaning of 18 U.S.C. § 1961 (1)(B) and (5), to wit, multiple instances of mail fraud in violation of 18 U.S.C. § 1341 and wire fraud in violation of 18 U.S.C. § 1343.
58. As a result of defendants' conduct as alleged above defendants were able to financially enrich themselves through fraudulently secured rental assistance and unauthorized distributions of project funds without maintaining, and providing services to Noble Drew Ali Plaza as legally required and as they represented to HUD.
59. Plaintiffs' Section 8 tenancies (in which they have a property interest as entitlement under Federal Law and through their leaseholds) were damaged in that they were deprived of a decent, safe and sanitary home for themselves and their families and were instead forced to live in conditions dangerous and hazardous to life, health and safety.
60. Upon information and belief, private defendants have received income from a pattern of racketeering activity, as described above, and used said income in the operations of the enterprises described herein in violation of 18 U.S.C. § 1962 (a).
61. Upon information and belief, private defendants have, through a pattern of racketeering activity as described above, maintained their interest and control of the enterprises described herein in violation of 18 U.S.C. § 1962 (b).
62. Upon information and belief, private defendants have, through a pattern of racketeering activity as described above, conducted and/or participated in the conduct of the enterprises described herein in violation of 18 U.S.C. § 1962 (c).
63. Upon information and belief, private defendants have, through a pattern of racketeering activity as described above, conspired to violate 18 U.S.C. § 1962 (a), (b) and (c).
FIRST CLAIM FOR RELIEF
64. Plaintiffs reallege paragraphs one (1) through sixty-three (63) as if fully restated here.
65. Plaintiffs are entitled to relief pursuant to 18 U.S.C. § 1964 (a) as follows:
(a) ordering the dissolution of LINDEN REALTY ASSOCIATES and the association in fact of private defendants (the enterprises) and the trusteeship and/or receivership of LINDEN REALTY ASSOCIATES and all of its assets wherever situated;
(b) ordering private defendants to divest themselves of any interest, direct or indirect, in LINDEN REALTY ASSOCIATES and the association in fact of private defendants (the enterprises) and in Noble Drew Ali Plaza; and
(c) prohibiting private defendants from engaging in the same type of endeavor, to wit; the ownership, provision or management of publicly-assisted housing including Noble Drew Ali Plaza, in the future.
SECOND CLAIM FOR RELIEF
66. Plaintiffs reallege paragraphs one (1) through sixty-five (65) as if fully restated here.
67. Plaintiffs are entitled to an accounting of all project assets and income and to the imposition of a contractual and/or constructive trust upon all unauthorized distributions of project fund and/or assets and all property obtained therewith, including but not limited to real and personal property, property in the form of investments, stocks, bonds and/or securities and all profits, rents, interest and/or other things of value obtained or realized as a direct and proximate result of defendants' use of said monies.
68. Plaintiffs are entitled to the restitution, pursuant to 18 U.S.C. § 1964(c) to the project and/or project account of threefold the amount of project funds and/or assets diverted (including distributions to any of defendants) therefrom, as well as any monies, property, interest and/or other things of value derived or realized from the use and/or investment thereof as described above.
THIRD CLAIM FOR RELIEF
69. Plaintiffs reallege paragraphs one (1) through sixty-eight (68) as if fully restated here.
70. Plaintiffs are entitled to a judgement directing that:
(a) an administrator be appointed pursuant to New York State Real Property Actions and Proceedings Law (RPAPL) § 778;
(b) from the date of entry thereof, all rents and rent subsidies due from the plaintiffs and from HUD on the plaintiffs' behalf and all rents due from all other tenants of Noble Drew Ali Plaza and rent subsidies paid by HUD on their behalf, upon service of said judgement upon them and all other monies from whatever source intended for the maintenance and repair of Noble Drew Ali Plaza, shall be deposited with such administrator;
(c) all rents and rent subsidies that become due in the future from the plaintiffs and all other tenants of Noble Drew Ali Plaza and all other monies from whatever source shall be deposited with such administrator;
(d) that all monies contained in the project account and all security deposits be transferred to such administrator;
(e) such deposited rents, rent subsidies and other monies shall be used, subject to the court's direction and according to the order of priority in RPAPL § 778 to the extent necessary to manage the project and provide services in compliance with law and to remedy the conditions alleged herein;
(f) such administrator be authorized and empowered, in accordance with the direction of the court, to make application for, accept and repay such monies as may be received from the co-defendants NEW YORK CITY DEPARTMENT OF HOUSING PRESERVATION AND DEVELOPMENT (HPD), HUD or from other sources, for the purposes of making any an all repairs and replacements authorized by the court;
(g) defendant HPD may file a mechanic's lien against the property for the cost of such work performed by it, or for which it loaned or advanced funds, which shall have the duration of four (4) years;
(h) such administrator shall, periodically as may be required by the court and upon completion of the work prescribed in the judgement, file with the court a full accounting of all receipts and expenditures for such work.
WHEREFORE plaintiffs respectfully request that the relief requested upon their First, Second and Third Claims for Relief be granted, that plaintiffs be awarded costs and attorneys fees herein and that this court grant plaintiffs such other and further appropriate relief as it may deem just and proper.
DATED: BROOKLYN, NEW YORK
DECEMBER 18, 1995
MARTIN S. NEEDELMAN, ESQ. PAUL J. ACINAPURA, ESQ. RICHARD J. WAGNER, of counsel (3017) JIM E. PROVOST, of counsel (7352) BROOKLYN LEGAL SERVICES CORP. "A" 80 Jamaica Avenue Brooklyn, New York 11207 (718) 345-6200 Attorneys for All Plaintiffs
LAURA EFFEL, ESQ. THE CHASE MANHATTAN BANK, N.A. ANDREW KOSLOFF, of counsel MATHEW LEONARD, of counsel WARREN STONE, of counsel ONE CHASE MANHATTAN PLAZA NEW YORK, NEW YORK 10081 (212) 552-7859 Attorneys for All Plaintiffs