Two Large New York City Landlords Accused of
Defrauding HUD's Section 8 Voucher Program
In October 2009, the United States Attorney's Office for the Southern District of New York filed notices in the U.S. District Court for the Southern District of New York, located in Manhattan, to partially join two False Claims Act cases brought by tenant Edmund Rosner against two large NYC residential landlords, accusing them with defrauding the U.S. Department of Housing and Urban Development (HUD)'s Section 8 Voucher Program.
In his separate complaints against WB/Stellar IP Owner, LLC, as well as its owner Laurence Gluck (06-cv-07115 (SAS))) and Glenn Gardens Associates, LP (index number 06-vi-07715 (SAS)), Rosner, a tenant in a WB/Stellar owned complex known as Independence Plaza North, alleges that the landlords improperly obtained millions of dollars of HUD Section 8 reimbursements using higher market rate rents when they should have been using lower rent stabilized ones because in each instance the landlords were receiving so-called "J-51 tax abatements," which restrict residential apartment owners from charging more than rent-stabilized rates.
Under the Section 8 Program, HUD pays landlords the difference between the rental amount low-income tenants are required to pay and the gross amount that the landlords are legally entitled to charge. Rosner also names the City of New York in his Complaints, alleging that the Office of Housing Preservation and Development (HPD) colluded with the landlords by allowing them to terminate their J-51 benefits and backdate the effect of the termination so that they could unlawfully avoid liability for rent overcharges. The United States' Complaints charge the landlords with committing various common law civil offenses for the same conduct alleged in the Rosner Complaints, although it did not join him in the False Claims Act allegations or the allegations against the City of New York. All of the related cases have been assigned to U.S. District Judge Shira A. Scheindlin, who ordered Rosner's Complaints, which had been filed in 2006 under seal, to be made public.
Related filed court documents:
Second Amended Complaint and Demand for Jury Trial (PDF)
First Amended Complaint and Demand for Jury Trial (PDF)
Unsealing Order (PDF)
Complaint: USA vs Glenn Gardens (PDF)
Complaint: USA vs WB/Stellar (PDF)
Notice of Partial Intervention (PDF)