Developer ordered to pay $7.4M in restitution
NEW YORK (Legal Newsline) - New York Attorney General Eric Schneiderman announced on Wednesday that a real estate developer and his company have been permanently barred from selling apartments in the state.
Former real estate developer Yair Levy and YL Rector Street LLC, his company, must also pay considerable fines and restitution for allegedly illegal and fraudulent business practices under terms of the full judgment.
"The state of New York has no tolerance for the kind of fraud perpetrated by Yair Levy," Schneiderman said. "With today's judgment, Yair Levy is out of business, and tenants and homebuyers in New York are more secure without this predator in the marketplace."
Levy and his company allegedly defrauded the purchasers and tenants of the Rector Square Condominium in Battery Park City by emptying the condominium's reserve fund and failing to make payments in lieu of taxes to the Battery Park City Authority. The fund was meant to ensure the safety and health of the condominium's residents.
In May, the Supreme Court of the State of New York ruled in favor of Schneiderman's office. The case was initiated by the office in June 2010 and alleged that Levy spent the residents' reserve fund on his personal and general business expenses and then abandoned the condominium without hot water or heat in the winter of 2008.
As part of the judgment, Levy and YL Rector Street LLC are permanently enjoined from engaging in any business activity related to the offer, sale or advertising of securities, including condominium and co-operative apartments, a must pay $7.4 million in restitution to the Rector Square Condominium. Levy must pay an additional $360,000 in civil penalties to the state. The state was also awarded another $4,000 in discretionary allowances from Levy and his company.
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