Real Estate Scammer Russell Mainardi Mismanages Fund, Puts 54 Low-Income Co-op Residents at Risk of Losing Their Homes
AG James Bans Mainardi From New York Real Estate Business
NEW YORK – New York State Attorney General Letitia James and New York State Housing and Community Rehabilitation (HCR) Commissioner RuthAnne Bisnaukas announced today that they have maintained an affordable housing cooperative (co-op) development in Rockland County. Did. In the course of his two-year investigation, the Office of the Attorney General (OAG) found that a building at 18-36 Columbus Avenue in Spring Valley was at risk of foreclosure due to unlawful misappropriation by its partners. discovered. Russell Mainardi, a real estate scammer, and his girlfriend, who was the co-op’s estate manager. Mainardi and his girlfriend grossly mismanaged the building’s finances for personal gain, putting residents at risk of losing their homes. Rockland Housing Action Coalition (RHAC), Community Preservation Corporation (CPC) ), and the law firm Nixon Peabody, OAG and HCR were able to maintain and stabilize their assets both financially and physically.
The agreement required Minardi and his collaborators to pay the cooperative $148,681 in damages and $250,000 in damages, his girlfriend resigned as property manager, and Minardi moved to New York City. Permanently prohibited from property development or fundraising activity on existing residential land. The agreement also requires Mainardi to void a $696,647.00 lien improperly placed on the property.
“No one should risk losing their home because of someone else’s illegal or fraudulent activity. Attorney General James“Minardi and his associates have defrauded the way this affordable building is managed and have brought residents to the brink of losing their homes due to fraud and deception. Safe, decent and affordable housing.” Access should be a basic right for every New Yorker, and thanks to our partners at HCR, all of these individuals are able to stay home.”
“Through no fault of their own, the homeowners of 18-36 Columbus Street were in grave danger of foreclosure, long-term financial distress and the loss of their hard-earned homes,” it said. . Home and Community Renewal in New York State Commissioner Ruthuan Visnaukas. “The state intervention has ensured that the cooperative remains affordable, well managed and in good standing. 18-36 Columbus Avenue is located in an increasingly expensive area and Offers income and middle-income individuals an opportunity to achieve otherwise unaffordable homeownership, essential to preserving this affordable housing resource that will benefit New Yorkers for decades to come We thank the Attorney General’s Office, the Rockland Housing Action Coalition, the Community Preservation Corporation, and Nixon Peabody for their support.”
“As New York continues to face a devastating housing crisis, the loss of existing affordable units, especially through poor management, is not an option for our community. New York City Comptroller Brad Lander“New York City Retirement Systems is proud to participate in this investment with CPC through its Public Private Apartment Rehabilitation Program. Thank you for your work.”
Built in 1970, 18-36 Columbus Avenue is a limited stock co-op originally funded by the Federal Housing and Urban Development Agency. In the fall of 2018, OAG launched an investigation into co-op operations following complaints from residents. When the building’s operator, Spring He Valley Housing Development Fund (HDFC), was facing financial troubles in his 2014, Mainardi asked the former board chairman to help finance the cooperative, according to a survey. I persuaded him to hire me for this, but charged an inflated rate. Mainardi has never worked for a low-income cooperative and misrepresented his experience and background, hiding felony convictions for mortgage fraud and tax evasion. He then placed his girlfriend in a position as a “no-show” property manager, and double-billed the co-op for the same administrative tasks that both entities allegedly performed. Mainardi also set up the director so that he was paid as a director and not required to pay for the maintenance of the cooperative unit, in violation of the regulations of the board.
Other findings regarding misconduct against Mainardi include:
- Offering fraudulent means to third party lenders to induce them to fund cooperatives.
- When the original lender discovered his fraudulent submissions, the cooperative incurred hundreds of thousands of dollars in unnecessary costs in a second loan.
- Failing to complete a promised funding demand project and receiving hundreds of thousands of dollars in co-op loan proceeds for incomplete and unsatisfactory work. When,
- Expenditure of general operating funds for personal goods and services.
As a result of these fraudulent activities, Spring Valley HDFC quickly defaulted on a high-interest loan brokered by Mainardi and faced foreclosure. Fifty-four low-income co-op shareholders were at risk of losing their home ownership. OAG helped avoid a co-op foreclosure when he recruited RHAC to work with co-op residents to elect a new board. The new board then recruited her RHAC as the cooperative’s new property manager.
CPC was able to provide a $3.7 million bridge loan to pay off the cooperative’s existing underlying debt and related fees. The CPC loan allowed the cooperative to avoid a planned foreclosure auction and allow the partnership to move forward with its conservation efforts.
As a result of the refinancing, all 54 homes will be affordable for households earning 120% or less of the regional median income. HCR is also providing $3 million through the state’s Small Building Participation Loan Program to fund modest rehabilitation activities such as roof replacement, safety improvements and HVAC repairs. CPC provides her additional $2.8 million in construction loans for rehabilitation work and more than $2 million in permanent loans through a partnership with the New York City Retirement System, which is administered by the New York City Board of Accounts. The Mortgage Insurance Fund of the New York State Mortgage Agency provides mortgage insurance for perpetual loans.
“This is a big win for Housing Justice in Spring Valley.” US Congressman Mondea Jones“Law enforcement has long been a pervasive problem in New York State and we are pleased that the Office of the Attorney General has concluded this investigation. Thanks to the tireless efforts of the HCR Commissioner and Attorney General, these residents’ homes no longer face foreclosures due to negligence or fraud.Rockland County And we must continue the fight to protect safe and affordable housing in all communities.”
“I commend Attorney General James and HCR Commissioner Visnaukas for taking decisive action against fraud and mismanagement that nearly cost Rockland co-op owners homes,” it said. State Senator Elijah Reichlin Melnik. “Owning a home is part of the American dream, and it’s hard enough to afford in Rockland without real estate scammers illegally exploiting people for their own personal financial gain. Great job by the Attorney General and HCR Commissioners who stepped in to protect cooperative owners and ban these villains from future real estate transactions in New York.
“Those who break the law must be brought to justice,” he said. Congressman Mike Lawler“Anyone caught embezzling funds from a cooperative or HOA should be held accountable for their actions. These funds should be misused for personal gain. No. It’s particularly maddening that someone attempted this with funds from a cooperative designed to provide affordable housing for Rockland County residents.”
“Across the state, the need for access to affordable housing continues to grow, and Rockland County is no exception.” Congressman Ken Zebroski“Any attempt by the unscrupulous to use these properties for personal gain would put hard-working families at risk of losing their homes and depriving our communities of the affordable housing stock they need. We take action against these individuals and thank her for her continued efforts against real estate fraud.”
“We are proud that the CPC was able to provide the necessary funding to get the co-op back on its feet and, most importantly, prevent residents from foreclosing their homes through the negligence of a few villains. I think,” said Sadie McKean, President, Community Preservation Corporation. “With cities across the state facing a housing affordability crisis, consolidating resources to maintain existing affordable homeownership is crucial to the stability and stability of communities like Spring Valley. It’s more important than ever to our vitality, and we thank Attorney General James, HCR Commissioner Visnaukas, partners Nixon Peabody, RHAC and our shareholders for their patience.”
“We are proud to support the cooperative and help protect the homes of 44 low-income families.” Attorney Richard Shore, Nixon Peabody’s Affordable Housing & Real Estate practice, led the law firm’s litigation team“These shareholders were taken advantage of by former property management companies and exposed to harsh money lender interest rates that bordered on predatory. Without coordinated intervention from our team, many families living in these affordable homes they own would have been lost forever.” Adding Shore, Nixon’s Peabody The litigation team included the bankruptcy team of Marissa Mascarella, Christopher Desiderio and Robert Christmas. “We really appreciate the opportunity to be a part of this project in order to keep our home ownership affordable,” added Shore.
The matter was brought to the attention of Brent Meltzer, Chief of the Home Protection Division, Hannah Bech, Assistant Attorney General of the Office of Internet Technologies, with the assistance of assistant legal counsel Cecily Mills and Brenda Heredia, and investigator Ismael Hernandez, and It was handled by Jane Landry Reyes of the Home Protection Division. The Division of Housing Protection is part of the Division of Social Justice and is led by Chief Deputy Attorney General Megan Four and overseen by First Deputy Attorney General Jennifer Levy. The Internet Technologies Office is part of the Division of Economic Justice and is overseen by Chief Deputy Attorney General Chris D’Angelo and First Deputy Attorney General Jennifer Levy.