Africa Israel Investments Ltd. (AFIL), a real estate company controlled by billionaire Lev Leviev, was barred from offering securities including condominiums in New York pending a fraud probe by the state attorney general.
Attorney General Eric Schneiderman today said in a statement that his office’s Real Estate Finance Bureau is investigating allegations of fraud in the offering of units at the Downtown Condominium at Broad and Wall streets, which sits directly across from the New York Stock Exchange and was once part of J.P. Morgan & Co. headquarters.
The probe is related to the disposition of escrow funds, the developers’ obligations to complete construction, and their refusal to give up control of the property to the owners and residents of the units, Schneiderman said.
Justice Richard F. Braun of State Supreme Court yesterday issued an order barring Tel Aviv-based Africa Israel and condominium developer Jeshayahu “Shaya” Boymelgreen from offering securities in New York.
The order requires the company to give up control of the condominium’s board to the owners of the 400 units in the building and deposit $470,000 that should have been held in escrow into a court-supervised account, Schneiderman said.
The attorney general said Africa Israel and Boymelgreen began to renovate the condominium in 2002, sold the units in an offering that grossed them at least $360 million, and then abandoned the renovation.
Aaron Abraham, an attorney with Goulston & Storrs PC in New York representing Africa Israel, didn’t immediately respond to a voice-mail message seeking comment on the state’s action.
A message sent to an e-mail address on the website of Boymelgreen Developers was rejected. Brian Itzkowitz, Boymelgreen’s lawyer, according the attorney general’s office, couldn’t be reached immediately.
Leviev, chairman of Africa Israel, was listed No. 974 on Forbes magazine’s list of billionaires worldwide, with a net worth of $1.5 billion as of March 2013.
The case is Schneiderman v. 15 Broad Street LLC, 450454/2014, New York State Supreme Court, New York County (Manhattan).
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