Civil Racketeering Lawsuit Filed Against Three New York City Real Estate Developers For Taking Millions Of Deposits From Buyers Of Houses

GREAT NECK, N.Y., Jan. 4, 2021 /PRNewswire/ -- Gary Rosen, Esq. of Rosen Law LLC, Great Neck, New York filed a federal Civil RICO lawsuit on December 30, 2020 in the United States District Court for the Eastern District of New York against New York City real estate developers Hok Kwai Chau, Bo Jin Zhu, Andy Chau and Wing Fung Home Realty Group Inc.

A lawsuit was filed against three New York real estate developers under the rarely used federal Civil RICO statute. RICO stands for Racketeer Influenced and Corrupt Organizations Act, which is a federal statute often used against organized crime figures. However, it is also available for civil actions where there is a pattern of racketeering activity. Proving a violation of Civil RICO can mean an award of triple damages plus attorney's fees, giving plaintiffs an incentive to bring a Civil RICO action where the facts support RICO. For a RICO case, it must be shown that there was an enterprise among the defendants, a purpose for the enterprise, a relationship between those associated with the enterprise, and that the enterprise was operating for several years to achieve the purpose of the enterprise.

Andy Chau and Hok Kwai Chau are a real estate salespersons with Wing Fung Home Realty Group Inc. in Elmhurst, New York and also developers of condominium and residential buildings. Andy Chau's 19 Bogart Realty Development Inc. allegedly sold the Bogart Hotel at 19 Bogart Street in East Williamsburg to Prakashkamur G. Patel's 19 Bogart Hotel Realty LLC on November 19, 2019.  An entity related to Andy Chau allegedly also purchased property in Flushing for $44.5 million from Sam Chang's McSam Group and signed a contract to sell the property to Sam Strulovitch on January 3, 2020.

Bo Jin Zhu is a real estate investor / developer whose company 1989 3 Ave LLC allegedly sold the real property at 1985/1987 Third Avenue, Manhattan to Yufeng Sun's North Capital Investments LLC on November 4, 2019 for $20,750,000.

The Plaintiffs in the lawsuit are two sisters who decided in 2010 to buy one of the eleven four family homes in the development containing a total of 61 apartments in the eleven buildings, that the Defendants built through their company 41-23 Haight Realty Inc. The two sisters worked in their restaurant to be able to pay the deposits and then borrowed monies on their credit cards from 2010 to 2015 to pay the $750,000 deposit on the $1,300,000 house.  The sisters were told that the $750,000 in deposits were needed to pay for the construction of the house and the monies were not held in escrow but paid directly to the defendants' company. Other buyers also paid a total of millions of dollars to 41-23 Haight Realty Inc. and then 41-23 Haight Realty Inc. borrowed millions of dollars from a bank and then defaulted on the loan and all of the eleven houses were lost in foreclosure to the lender, leaving the buyers of the houses with no houses and losses of their deposits. The 61 apartment development sold on September 14, 2020 through the bankruptcy court to J&C International Group who paid $38.1 million for the 61 unit project, of which the buyers of the houses are likely to recover little, if any of their deposits.

In numerous state court lawsuits, other buyers of houses filed lawsuits against 41-23 Haight Realty Inc., Bo Jin Zhu and Andy Chau for taking deposits totaling millions of dollars and not delivering the houses and not returning the deposits. Those lawsuits went nowhere when 41-23 Haight Realty Inc. was placed into bankruptcy.

It is alleged in the lawsuit that the defendants preyed on Asian buyers who were not sophisticated and who trusted the defendants who were also of Asian descent.

The lawsuit alleges a pattern of racketeering activity which is required for a RICO lawsuit. As part of the pattern of racketeering are the allegations of fraud upon the New York State Department of Law, Office of the Attorney General in connection with condominium offering plans, the New York City Department of Housing Preservation and Development and the New York City Department of Finance in connection with partial tax exemption benefits pursuant to Section 421-a of the Real Property Tax Law.

As part of a pattern of racketeering activity, it is alleged in the lawsuit that Andy Chau was the principal of sponsor of the Wing Fung Plaza Condominium located at 64-05 Woodside Avenue, Woodside, New York, and created this 27 apartment building as a condominium but fraudulently transferred one unit to a relative of his to create a condominium deceiving the New York State Attorney General, and also the New York Department of Finance who granted a partial tax exemption to Andy Chau's entity worth over $2,500,000 million dollars in real estate tax benefits based on the building being a condominium, and not a rental apartment building.

A copy of the complaint is available at: 
https://www.dropbox.com/s/nk1h3tclm7x6ncj/FILED%20COMPLAINT.pdf?dl=0    

For information: Gary Rosen, Esq., Rosen Law LLC, 516-729-3300

SOURCE Rosen Law LLC

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