Two Brooklyn Owners Charged with Fraud

Two Brooklyn owners were arrested for intentionally wrecking apartments in order to drive tenants out of their rent-stabilized buildings. The owners, who are brothers collectively known as JBI Management, had destroyed the kitchens and bathrooms of two ground-floor apartments with a sledgehammer, taking down a wall that divided the apartments in the process. The owners said the work was necessary for repairs, and would be done in three weeks; it took 17 months and the hiring of a lawyer for the apartments to be returned to a usable condition, the indictment says.

The prosecution of owners is rare, but the case follows years of complaints at several buildings the brothers own. The brothers pleaded not guilty to charges of fraud, burglary, grand larceny, submitting false documents, and unlawful eviction, among others.

At the arraignment, Assistant District Attorney Gavin Miles said the brothers gained between $60,000 and $150,000 by illegally pushing out tenants paying $650 to $1,000 a month and replacing them with others paying upward of $3,500.

The most serious charge, second-degree burglary, carries a maximum prison term of 15 years. It was based on what prosecutors called the illegal entry into an apartment. And District Attorney Kenneth Thompson stated that the grand larceny charges related to depriving the tenants of basic services and stealing the value of their homes.

“We simply will not allow the hardworking people of Brooklyn to be intimidated and harassed or have their apartments destroyed by those who seek to force them out just to make money from the lucrative real estate market,” Thompson said in a statement. “Rent-stabilized apartments are designed to protect tenants and cannot be turned into market value apartments through intimidation and fraud. It’s against the law, and we will investigate and vigorously prosecute those who harass and prey on innocent tenants in Brooklyn.”

The state Tenant Protection Unit last year served a subpoena on JBI Management to force it to produce records related to rent rolls and business practices for 10 Brooklyn buildings that the company owns in Bushwick, Greenpoint, and Williamsburg. And officials with the city’s Department of Housing Preservation and Development, which had already sued one brother over building code violations, went to Housing Court last year to remove him from managing one building and to request that a judge appoint an independent administrator for the property.