District Attorney Candidate Wants to Prosecute Owners for IAI Fraud

Diana Florence has joined the crowded field challenging Cyrus Vance, the incumbent District Attorney of New York County. Florence is one of nine candidates challenging incumbent DA Cyrus Vance in a primary race that will culminate next June 2021. She began her career as a prosecutor 25 years ago in the Manhattan District Attorney’s Office, which included time as head of its Construction Fraud Task Force.

Florence is advocating for a Housing Bureau Initiative. According to her website, a newly created Housing Bureau would investigate and prosecute systemic fraud in the housing arena, from rent-stabilized apartments to NYCHA. These investigations would center on tenant inequities, such as illegal rent destabilization due to inflated and nonexistent improvements, fraudulent deed cases, tenant harassment, overbilling for poor or fraudulent repairs, and falsifying inspections for mold, asbestos, pests, and lead-based peeling paint within the home.

Florence intends to pay particular attention to fraud committed by owners who falsify individual apartment improvement (IAI) costs to collect more rent on rent-stabilized apartments than they’re entitled to receive. She states, “Because these falsifications have thrived unchecked in housing court, it has resulted in the monthly theft of hundreds of thousands of dollars in illegal rent from tenants across Manhattan. This is because unscrupulous landlords have registered apartment rents higher than they are entitled to receive under rent stabilization, and have induced their tenants to pay the higher rents under false pretenses. The Housing Bureau will vigorously investigate these thefts and bring appropriate felony grand larceny and scheme to defraud charges.”

In an AMNY op-ed, she argued that IAI fraud deserves to be treated as a crime. “In New York, it is a felony to file a false statement with a public agency. It is also a felony to use false pretenses to steal thousands of dollars from a person. Each false document carries a term of imprisonment of up to four years,” she wrote. “The fact is, housing fraud is a systematic crime of power that has ripple effects on every part of society, and law enforcement needs to start treating it as such.”

The 2019 reforms to the state’s rent-regulation law scaled back the amount of rent increase an owner can get from an individual apartment improvement and limited the lifespan of those increases, likely curtailing the potential for fraud. Nevertheless, Florence has said the fact that current rents could reflect fraud committed decades ago should be pursued.