Feds Uncover Alleged Ramapo Haredi Housing Scam

The federal government's agent asked for an investigation into what he called “abuses and illegalities” by Ramapo and its quasi-economic development agency, the Ramapo Local Development Corp. The Elm Street development, built with large families in mind, appears to have sold many of its units to investors – not needy families – living in heavily hasidic areas of New York.

Ramapo Commons

Ramapo affordable-housing project faces scrutiny on claim that investors bought most units
Steve Lieberman • JournalNews

RAMAPO — A Rockland County housing agency representing the federal government is reviewing Ramapo’s affordable-housing project on Elm Street, based on a complaint that investors bought up most of 24 units already sold, for potential rental properties.

Bruce Levine, a former legislator and Spring Valley village attorney, also sent his complaint to the state Comptroller’s Office and Attorney General’s Office. Levine asked for an investigation into what he called “abuses and illegalities” by Ramapo and its quasi-economic development agency, the Ramapo Local Development Corp.

The corporate ownership and condominium rentals could jeopardize $1.44 million from the state and $200,000 from the federal government aimed at lowering the cost of the units, which were priced at $349,000 for the first 48 units.

The complaint states that County Clerk’s Office records show 17 of approximately 24 condominiums already sold have been purchased by limited liability companies, a business entity that’s not a corporation.

Only seven units sold so far by the Ramapo Local Development Corp. are owned by people, the complaint says. Five of those individuals gave Brooklyn addresses, one signed was by an LLC owner in Ramapo, and one gave a Monsey address.

“Of these units, 17 were sold to LLCs (sometimes multiple units to one LLC) even though the rules of the development are that the units be owner-occupied by eligible (means tested) families,” Levine wrote in his complaint.

“There is also evidence that some of the investor-owned units are in fact being rented out,” Levine wrote. “In addition to the affordable financing and affordable housing issues, there are also gifts of public funds issues that arise from these actions.”

Levine’s complaint spurred a review by the Rockland Office for Community Development on behalf of the Department of Housing and Urban Development.

Community Development Director Joseph Abate said Tuesday that the Ramapo Commons project was deemed eligible for $200,000.

“Upon receiving Mr. Levine’s email pointing out issues he discovered, we are setting up a federal monitoring on the behalf of the federal program to audit the records and to make sure the program is within compliance,” Abate said. “If it is not in compliance we would then address the issue to bring compliance or return the funds.”

Ramapo Supervisor Christopher St. Lawrence, who chairs the RLDC, didn’t returns calls Tuesday.

The RLDC executive director, Deputy Town Attorney Aaron Troodler, said the federal grants for Ramapo Commons were appropriately used for predevelopment costs and will be spread over the 132 units.

“As a result, we will be able to have the requisite number of qualified purchasers during the course of the three construction phases and will be able to fully comply with all relevant HUD requirements,” Troodler said.

Abate’s office notified the agency about the review, Troodler said.

“We have taken great care throughout the life of this project to ensure that the Ramapo Local Development Corporation was able to fulfill its objective of providing much-needed affordable housing units,” he said.

The 132-unit development is on 8 acres off Union Road, bordering Spring Valley and Monsey.

The development has drawn interest from ultra-Orthodox Jews, since each condominium offers four to six bedrooms, with space for an extra kitchen and a shed for the Jewish festival of Sukkah.

In phase one, 36 of the first 48 condominiums were eligible to be subsidized $40,000. Despite initial interest from hundreds of people, the RLDC secured just 10 families who met financial requirements for the units, Troodler said in January.

Comments

[Sol]

The development has drawn interest from ultra-Orthodox Jews, since each condominium offers four to six bedrooms, with space for an extra kitchen and a shed for the Jewish festival of Sukkah.

Makes sense. A couple with say two kids would have no use for a 6 bedroom apartment.

[flat earth]

First the tax payers get hosed to subsidize the construction of 6 bedroom 2 kitchen affordable homes. Then they are bought by Hasidic LLCs and rented out via section 8 housing subsidized by the tax payer again.

And no politician in the Town, County or State will do a god damn thing.

Maybe the Feds will one day step up to the plate.

As a Rockland taxpayer I am just SICK of
paying for these worthless deadbeat tax fraud cheating child molesting racist sexist taliban scum of the earth.

[Devorah]

Feds investigate, but no one is ever really prosecuted in Ramapo. You can set a man on fire and still get off with little time served.

[Jewish Cynic]

Tip of the iceberg.
If they did a real investigation they'd have to arrest Drooler, St.Lawless and half the black hats/hassids in greater Monsey.
Of course it'll never happen. If things get too hot they'll find some fall guy to take the rap.

[seymour]

Makes sense. A couple with say two kids would have no use for a 6 bedroom apartment.

Posted by: Sol | March 02, 2012 at 09:24 AM

I see you missed the point of the story

[flat earth]

Devorah - I agree it would be worth a few years to set St Lawrence or Troodler on fire.

[Skeptical]

FYI - LLC's are corporations - "limited liability corporations." This allows the "member" (not a shareholder), to treat the entity as a pass-through for income, etc. It is also the most popular form for new, closely held corporations. Typically, there is one member or, if more than one, the members are family held trusts. I would not be at all surprised to find out that the corporate structure is geared to insulating these greedy jerks from liability while minimizing any taxes they must pay, all the while giving the male head of the family maximum control.

[David]

Charedi “abuses and illegalities”?

Well, fancy that.

[Emanuel]

Classic real estate scam.