ATTORNEY GENERAL CUOMO BARS CONDOMINIUM DEVELOPER FROM FUTURE SALES
Developer hid that one of its principals was the escrow agent, and controlled the company that certified the project's budget
Under settlement all purchasers are offered the right to rescind their contracts
Yesterday, Attorney General Andrew M. Cuomo announced that his office has reached an agreement barring an East Side condominium developer from future sales. The settlement with 250 East Borrower, LLC and its principals, Alexander Gurevich, Gene a/k/a Gennady Kiselman, Eliot Eliyahu Spitzer, and Michael Steinberg, is the result of an investigation of the Alexander Condominium, located at 250 East 49th Street in Manhattan.
Under the terms of the settlement, the developer is required to offer rescission to all purchasers and must pay the state a total of $300,000 in costs, penalties and fee. In addition, developer Alexander Gurevich has been removed from the project and is barred from offering or selling condominiums, cooperatives, or other real estate securities for three years. The developer has also transferred all funds remaining in escrow to an independent escrow agent, and has arranged for independent certification of the projected budget and title insurance.
"Today's settlement sends a clear message to property developers that deception and double-dealing will not be tolerated," said Attorney General Cuomo. "Purchasers are entitled to full and honest disclosure and must be able to rely on all representations made to them."
Starting in September of 2009, the Attorney General's Office began an investigation of the Alexander Condominium. The investigation revealed, in violation of the Martin Act and the Attorney General's regulations governing new construction condominiums, that the developer had an undisclosed principal, Alexander Gurevich, who served as the escrow agent for the project, as well as being the sole principal of the mortgage lender and title company recommended by the developer to purchasers. In addition, Mr. Gurevich controlled the company that certified the accuracy of the developer's budget projections.
The case was handled by Assistant Attorneys General Joseph Wilson, Susan Scharbach, Lewis Polishook and Marissa Piesman of the Real Estate Finance Bureau under the supervision of Deputy Attorney General Michael Berlin.