Manhattan District Attorney Alvin Bragg announced multiple indictments on Wednesday against six real estate developers accused of falsifying records about apartments legally designated as affordable in order to reap the benefits of a controversial tax incentive.
During a press conference Wednesday, Bragg said the developers — who altogether owned six northern Brooklyn properties in the case — submitted false documents to New York City and state to qualify for tax incentives under 421-a, a lucrative tax break that expired in June.
Bragg claimed the developers falsely claimed affordable apartments would go to tenants with qualifying incomes, when in reality, they did not.
“This illegal activity was perpetuated for years because the developers filed false paperwork to the city and state indicating falsely that they were following all appropriate guidelines,” Bragg said.
The indictments span several years' worth of allegations, from 2011 to 2019. Developers charged “exorbitant rents” for more than 20 affordable units, Bragg said, and did not get approval from the city for tenants, as required by law.
The district attorney has accused the developers — Joel Kohn, Michael Ambrosino, Alen Paknoush, Mendel Gold, Ioan Sita, and Gheorghe Sita — and their relevant business entities of reaping $1.6 million in incentives through their purported falsehoods under the program. Bragg was joined on Wednesday by Jocelyn Strauber, the commissioner of the city Department of Investigation, whose office partnered with the district attorney in the investigation.
It’s the latest blow from local law enforcement to beneficiaries of 421-a, who have since been accused of wrongdoing. It is also believed by Bragg’s office to be the first criminal tax fraud case under the program.
Earlier this month, Attorney General Letitia James announced that a different developer settled claims that it had shorted dozens of workers on pay, violating prevailing wage requirements under the tax benefit. The company paid $3 million to settle the case.
During its lifetime, the 421-a program spurred contentious debate between developers and pro-business groups, who deemed it critical to new construction in the five boroughs, and progressive critics, who called it a handout to the real estate industry.
Mayor Eric Adams had been among those pushing for the renewal of 421-a through the state legislature ahead of its legal sunset in June. Gov. Kathy Hochul had presented a replacement, 485-w, that was largely similar to the original framework, though it failed to get traction in Albany.
Developers exceed the cap on affordable units by as much as $1,000 more per month, according to Bragg’s office.
Emails and phone calls to the developers’ attorneys and their offices were not immediately returned with comment.