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The $1.3 billion deal for Brooklyn developer Berkshire LLC to buy federally subsidized Brooklyn housing complex Starrett City may be blocked by State Attorney General Andrew Cuomo and the federal Department of Housing and Urban Development. Cuomo announced that his office will enforce an injunction barring the lead investor David Bistricer from completing "certain real estate for life and will not permit the conversion of any of the property to cooperative apartments." Cuomo's statement was pretty damning, calling Bistricer's real estate history "sordid" and saying, "The material I turned over today should be enough to ban him from this deal at the start."

Findings that led to the court order against Bistricer include that he failed to disclose the terms of refinanced mortgages in amendments filed prior to the auction of apartments he owned, a violation of the Martin Act. He was ordered to pay $450,000 in restitution to residents and $50,000 to the State Attorney General’s office.

The Attorney General’s office also fielded complaints against Bistricer in 1989 from tenant shareholders at the Fort Tryon Apartment Corp. in upper Manhattan, which had been converted into co-op apartments by Bistricer and his parents. Complaints included that Bistricer used corporate funds for work on his family’s personal apartments and failed to permit shareholder participation in the running of the co-op.

In 1992, shareholders again complained that Bistricer and his family refused to surrender control of the co-op board, a violation of regulations and representations in the Fort Tryon co-op offering plan. Shareholders also raised questions about the refinancing of the apartment corporation’s mortgage, which was held by the Bistricer family, including the extraction of a large prepayment penalty as part of the transaction negotiated by Bistricer.

A NY State Supreme Court injunction from 1998 barred Bistricer from co-op conversions and sales. Now, if you're in a group of investors offering to shell out $1.3 billion, don't you think you should make sure the parties involved are qualified to buy the property?

Cuomo handed over evidence to HUD Secretary Alphonso Jackson today. Jackson told people at a meeting in a church near Starrett City, "This transaction threatens the low-income housing market and those who are most in need...I want to review every aspect of this sale. I do not want to prejudge anything. However, it's very difficult for me to believe that if you pay $1.3 billion dollars for that property that it can stay affordable. It's almost impossible." Jackson said he will make a decision in two weeks. Still, it's unclear whether Starrett City could find another bidder to buy the complex, but maybe there would be certain restrictions.

Mayor Bloomberg had alluded to Bistricer's problems last week. And earlier this week, Senator Charles Schumer told the NY Times he would "do everything I can to block" to block the sale.

Photograph of Senator Schumer embracing 5-year-old Iyanna Brown in front of Starrett City earlier this week by Kathy Willens/AP