Illegal profit venture wrapped in a fake common cost.

Defendants maliciously and willfully misbehaved to form an illegal profit venture masked by a common cost project solely for the personal gain of board insiders.

This violated condominium rules and NYS condominium laws that require boards to distinguish between individual and group cost responsibilities. A “purchase offer” was misused to defraud owners into believing that the board of the condominium was the property owner of an elevator shaft, as if the common element had been severed from the building, and as such was now the Sponsor of new real estate. It had not been. The board had undertaken none of the formalities and disclosures required by the condominium governing documents or condominium law to accomplish that. This misrepresentation fraudulently induced owners to purchase overpriced personal improvements, for which the condominium governing documents clearly made them solely responsible, in a board-created profit venture that was structured to the sole benefit of the individual defendants. This created a small, utterly economically irrational—and hence arbitrary and capricious—economic subsidy of shaft nonusers by shaft users—and a large and unjust transfer to Defendant One of roof real estate in common use, as well as of shaft real estate that was in multiple exclusive uses within the common element of the interior shaft. The roof and the shaft had nothing to do with one another and should not have been grouped. The grouping was apparently an effort to deceive naive board members into believing that this grouping made the matter a “common” one. The evidence will show that Defendant One engineered this fraud in collusion with his co-defendants and with hired gun “experts” that common funds were misused to retain, at common expense, to create the deceptive paperwork that purported to justify his significant thefts of real property, and to convert the condominium entity into a money laundry to alter owner cost responsibilities in violation of NY RPP §339-m and of the explicit terms of the condominium documents. All acts of this board were ultra vires in a number of respects including basic matters of non-election and violations of rules of order, number and quorum.