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SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ------X THE CITY OF NEW YORK, Index No. /2019
Plaintiff, SUMMONS -against-
OPERATOR DEFENDANTS: METROPOLITAN PROPERTY GROUP, INC. a/k/a METROPOLITAN PROPERTY GROUP II, INC., MAXIM BECKMAN, SIMON ITAH a/k/a SHIMON ITAH, ALON KARASENTY, SAMI KATRI, SHELY KATRI a/k/a SHELY VITENSHTEIN,
ALSI PROPERTIES LLC, AMS GROUP NYC, CORP. a/k/a AMS GROUP a/k/a ANS GROUP, BKI GROUP LLC, CLEAN STAY SERVICES INC a/k/a STAY CLEAN
SERVICES, DSG GROUP LLC, ERESOE HOUSING LLC a/k/a ERESOE HOLDING, HELLO SERVICES INC, IGA SERVICES INC a/k/a IGA SERVICES, IKB GROUP, INC., KBI GROUP LLC, KIB GROUP LLC, MASS GROUP, INC. a/k/a MASS GROUP, MIB SERVICE INC a/k/a MIB SERVICES INC. a/k/a MIB SERVICES, MIDTOWN WEST APTS, INC a/k/a MIDTOWN WEST APTS, MIDTOWN APTS, INC a/k/a MIDTOWN APTS a/k/a MIDTOWN APT a/k/a MIDOWN APTS a/k/a
MIDROWN APTS, SIMA HARLEM GROUP LLC a/k/a SIMA HARLEM GROUP, SPARGO GROUP, INC. a/k/a SPARGO GROUP a/k/a SPARGO INC a/k/a NYC SPARGO, SSAM GROUP, INC a/k/a SSAM GROUP a/k/a SSAM,
OWNER DEFENDANTS:
LINMAR, L.P., LINMAR GROUP, LLC, THE LAND AND BUILDING KNOWN AS 123 EAST 54™ STREET, BLOCK 1309, LOT 8, County, City and State of New York,
200 GROUP, LLC, HELM MANAGEMENT, INC., THE LAND AND BUILDING KNOWN AS 200 EAST 116™ STREET, BLOCK 1665, LOT 48, County, City and State of New York,
CARALEX HOLDINGS, LLC,
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THE LAND AND BUILDING KNOWN AS 207-215 27™ EAST STREET, BLOCK 908, LOT 9, County, City and State of New York,
30™ 230 EAST LLC, THE LAND AND BUILDING KNOWN AS 230 EAST 30™ STREET, BLOCK 910, LOT 46, County, City and State of New York,
2118 GROUP, LLC, 3RD THE LAND AND BUILDING KNOWN AS 2118
AVENUE, BLOCK 1643, LOT 39, County, City and State of New York,
DOE" DOE," and "JOHN and "JANE numbers 1 through
10, fictitiously named parties, true names unknown, the parties intended being the managers or operators of the business being carried on by Defendants, and any person c1aiming any right, title or interest in the real property which is the subject of this action,
Defendants. ------X
TO THE ABOVE-NAMED DEFENDANTS:
YOU ARE HEREBY SUMMONED TO ANSWER the Verified Complaint in this action
and to serve a copy of your answer on the Plaintiff CITY OF NEW YORK within twenty (20) days
after the service of this Summes, exclusive of the day of service, or within thirty (30) days after
service is complete if this Summons is not personally delivered to you within the State of New
York. In case of your failure to appear or añswer, judgment will be taken against you by default for
the relief demanded in the Complaint.
2
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The basis of the venue designated is the residence of the Plaintiff and the county in which
the properties affected by this action are located. Plaintiff designates New York County as the place
of trial.
Dated: New York, New York
January 14, 2019
By: FRANCINE VLANPUS O'KEEFFE Special Assistant Corporation Counsel Mayor's Office of Special Enforcement 4d" 22 Reade Street, Floor New York, NY 10007
Tel.: (212) 416-7830 Email: [email protected]
TO:
OPERATÖ1{ DEFENDANTS: METROPOLITAN PROPERTY GROUP, INC. a/k/a METROPOLITAN PROPERTY GROUP II, INC., 3rd 184 Fifth Avenue, FlOOr New York, New York 10010
MAXIM BECKMAN
c/o Yoram Nachimovsky, Esq. Yoram Nachimovsky, PLLC
299 Broadway Suite 605 New York, New York 10007
SIMON ITAH a/k/a SHIMON ITAH
c/o Yoram Nachimovsky, Esq. Yoram Nachimovsky, PLLC
299 Broadway Suite 605 New York, New York 10007
ALON KARASENTY
c/o Yoram Nachimovsky, Esq. Yoram Nachimovsky, PLLC
299 Broadway Suite 605 New York, New York 10007
3
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SAMI KATRI
c/o Yoram Nachimovsky, Esq. Yoram Nachimovsky, PLLC
299 Broadway Suite 605 New York, New York 10007
SHELY KATRI a/k/a SHELY VITENSHTEIN
c/o Yoram Nachimovsky, Esq. Yoram Nachimovsky, PLLC
299 Broadway Suite 605 New York, New York 10007
ALSI PROPERTIES LLC
c/o Yoram Nachimovsky, Esq. Yoram Nachimovsky, PLLC
299 Broadway Suite 605 New York, New York 10007
AMS GROUP NYC, CORP. a/k/a AMS GROUP a/k/a ANS GROUP c/o Yoram Nachimovsky, Esq. Yoram Nachimovsky, PLLC
299 Broadway Suite 605 New York, New York 10007
BKI GROUP LLC
c/o Yoram Nachimovsky, Esq. Yoram Nachimovsky, PLLC
299 Broadway Suite 605 New York, New York 10007
CLEAN STAY SERVICES INC a/k/a STAY CLEAN SERVICES
c/o Yoram Nachimovsky, Esq. Yoram Nachimovsky, PLLC
299 Broadway Suite 605 . New York, New York 10007
DSG GROUP LLC
c/o Yoram Nachimovsky, Esq. Yoram Nachimovsky, PLLC
299 Broadway Suite 605 New York, New York 10007
4
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ERESOE HOUSING LLC a/k/a ERESOE HOLDING
c/o Yoram Nachimovsky, Esq. Yoram Nachimovsky, PLLC
299 Broadway Suite 605 New York, New York 10007
HELLO SERVICES INC
c/o Yoram Nachimovsky, Esq. Yoram Nachimovsky, PLLC
299 Broadway Suite 605 New York, New York 10007
IGA SERVICES INC a/k/a IGA SERVICES
c/o Yoram Nachimovsky, Esq. Yoram Nachimovsky, PLLC
299 Broadway Suite 605 New York, New York 10007
IKB GROUP, INC. c/o Yoram Nachimovsky, Esq. Yoram Nachimovsky, PLLC 299 Broadway Suite 605 New York, New York 10007
KBI GROUP LLC
c/o Yoram Nachimovsky, Esq. Yoram Nachimovsky, PLLC
299 Broadway Suite 605 New York, New York 10007
KIB GROUP LLC
c/o Yoram Nachimovsky, Esq. Yoram Nachimovsky, PLLC
299 Broadway Suite 605 New York, New York 10007
MASS GROUP, INC. a/k/a MASS GROUP c/o Yoram Nachimovsky, Esq. Yoram Nachimovsky, PLLC
299 Broadway Suite 605 New York, New York 10007
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MIB SERVICE INC a/k/a MIB SERVICES INC. a/k/a MIB SERVICES
c/o Yoram Nachimovsky, Esq. Yoram Nachimovsky, PLLC
299 Broadway Suite 605 New York, New York 10007
MIDTOWN WEST APTS, INC a/k/a MIDTOWN WEST APTS, MIDTOWN APTS, INC a/k/a MIDTOWN APTS a/k/a MIDTOWN APT a/k/a MIDOWN APTS a/k/a MIDROWN APTS
c/o Yoram Nachimovsky, Esq. Yoram Nachimovsky, PLLC
299 Broadway Suite 605 New York, New York 10007
SIMA HARLEM GROUP LLC a/k/a SIMA HARLEM GROUP
c/o Yoram Nachimovsky, Esq. Yoram Nachimovsky, PLLC
299 Broadway Suite 605 New York, New York 10007
SPARGO GROUP, INC. a/k/a SPARGO GROUP a/k/a SPARGO INC a/k/a NYC SPARGO c/o Yoram Nachimovsky, Esq. Yoram Nachimovsky, PLLC
299 Broadway Suite 605 New York, New York 10007
SSAM GROUP, INC a/k/a SSAM GROUP a/k/a SSAM c/o Yoram Nachimovsky, Esq. Yoram Nachimovsky, PLLC
299 Broadway Suite 605 New York, New York 10007
OWNER DEFENDANTS: LINMAR, L.P. c/o Abington Holding 2"d 950 Third Avenue, Floor New York, New York 10022
LINMAR GROUP, LLC
c/o Abington Holding 2nd 950 Third Avenue, FlOOr New York, New York 10022
54™ THE LAND AND BUILDING KNOWN AS 123 EAST STREET, BLOCK 1309, LOT 8, County, City and State of New York,
6
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200 GROUP, LLC 59* 336 East Street
New York, New York 10022
HELM MANAGEMENT, INC. 59* 336 East Street
New York, New York 10022
116™ THE LAND AND BUILDING KNOWN AS 200 EAST STREET, BLOCK 1665, LOT 48, County, City and State of New York,
CARALEX HOLDINGS, LLC c/o Abington Holding 27* 950 Third Avenue, Floor New York, New York 10022
27™ THE LAND AND BUILDING KNOWN AS 207-215 EAST STREET, BLOCK 908, LOT 9, County, City and State of New York,
30™ 230 EAST LLC
c/o Abington Holding 950 Third Avenue
New York, New York 10022
30™ THE LAND AND BUILDING KNOWN AS 230 EAST STREET, BLOCK 910, LOT 46, County, City and State of New York,
2118 GROUP, LLC 59* 336 East Street
New York, New York 10022
3RD THE LAND AND BUILDING KNOWN AS 2118 AVENUE, BLOCK 1643, LOT 39, County, City and State of New York,
DOE" DOE," "JOHN and "JANE numbers 1 through 10
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SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ------X THE CITY OF NEW YORK, Index No. ______/2019
Plaintiff, VERIFIED COMPLAINT -against-
OPERATOR DEFENDANTS: METROPOLITAN PROPERTY GROUP, INC. a/k/a METROPOLITAN PROPERTY GROUP II, INC., MAXIM BECKMAN, SIMON ITAH a/k/a SHIMON ITAH, ALON KARASENTY, SAMI KATRI, SHELY KATRI a/k/a SHELY VITENSHTEIN,
ALSI PROPERTIES LLC, AMS GROUP NYC, CORP. a/k/a AMS GROUP a/k/a ANS GROUP, BKI GROUP LLC, CLEAN STAY SERVICES INC a/k/a STAY CLEAN SERVICES, DSG GROUP LLC, ERESOE HOUSING LLC a/k/a ERESOE HOLDING, HELLO SERVICES INC, IGA SERVICES INC a/k/a IGA SERVICES, IKB GROUP, INC., KBI GROUP LLC, KIB GROUP LLC, MASS GROUP, INC. a/k/a MASS GROUP, MIB SERVICE INC a/k/a MIB SERVICES INC. a/k/a MIB SERVICES, MIDTOWN WEST APTS, INC a/k/a MIDTOWN WEST APTS, MIDTOWN APTS, INC a/k/a MIDTOWN APTS a/k/a MIDTOWN APT a/k/a MIDOWN APTS a/k/a MIDROWN APTS, SIMA HARLEM GROUP LLC a/k/a SIMA HARLEM GROUP, SPARGO GROUP, INC. a/k/a SPARGO GROUP a/k/a SPARGO INC a/k/a NYC SPARGO, SSAM GROUP, INC a/k/a SSAM GROUP a/k/a SSAM,
OWNER DEFENDANTS: LINMAR, L.P., LINMAR GROUP, LLC, THE LAND AND BUILDING KNOWN AS 123 EAST 54TH STREET, BLOCK 1309, LOT 8, County, City and State of New York,
200 GROUP, LLC, HELM MANAGEMENT, INC., THE LAND AND BUILDING KNOWN AS 200 EAST 116TH STREET, BLOCK 1665, LOT 48, County, City and State of New York,
CARALEX HOLDINGS, LLC,
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THE LAND AND BUILDING KNOWN AS 207-215 EAST 27TH STREET, BLOCK 908, LOT 9, County, City and State of New York,
230 EAST 30TH LLC, THE LAND AND BUILDING KNOWN AS 230 EAST 30TH STREET, BLOCK 910, LOT 46, County, City and State of New York,
2118 GROUP, LLC, THE LAND AND BUILDING KNOWN AS 2118 3RD AVENUE, BLOCK 1643, LOT 39, County, City and State of New York,
and “JOHN DOE” and “JANE DOE,” numbers 1 through 10, fictitiously named parties, true names unknown, the parties intended being the managers or operators of the business being carried on by Defendants, and any person claiming any right, title or interest in the real property which is the subject of this action,
Defendants. ------X
Plaintiff, THE CITY OF NEW YORK, by its attorney, ZACHARY W. CARTER,
Corporation Counsel of the City of New York, for its Verified Complaint against Defendants,
alleges as follows:
1. Plaintiff, THE CITY OF NEW YORK (the “City”), brings this action to shut
down the illegal transient (less than 30-day) rentals that Defendants have proven themselves
eager to profit from and unwilling to prevent and stop, despite multiple chances to do so over the
past four years, in at least five buildings throughout Manhattan stretching from Kips Bay to East
Harlem.
2. Defendants have created, maintained, and/or permitted public nuisances in the
form of illegal transient rentals in at least the following five buildings they own, control, manage,
and operate (collectively, the “Subject Buildings”), all multiple dwellings that can only legally
be used as permanent residences:
2
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a. 123 EAST 54TH STREET, BLOCK 1309, LOT 8, County, City and State of New York (“123 East 54th Street”), a nine-story Class “A” multiple dwelling with 64 permanent residential dwelling units, providing amenities such as 24-hour doorman, on-site superintendent, concierge services, landscaped rooftop deck, fitness center, and laundry facility;
b. 200 EAST 116TH STREET, BLOCK 1665, LOT 48, County, City and State of New York (“200 East 116th Street”), a four-story Class “A” multiple dwelling with seven permanent residential dwelling units;
c. 207-215 EAST 27TH STREET, BLOCK 908, LOT 9, County, City and State of New York (“207-215 East 27th Street”), a nine-story Class “A” multiple dwelling with 80 permanent residential dwelling units;
d. 230 EAST 30TH STREET, BLOCK 910, LOT 46, County, City and State of New York (“230 East 30th Street”), an 18-story Class “A” multiple dwelling with 126 permanent residential dwelling units; and
e. 2118 3RD AVENUE, BLOCK 1643, LOT 39, County, City and State of New York (“2118 3rd Avenue”), a five-story Class “A” multiple dwelling with five permanent residential dwelling units.
3. Defendant METROPOLITAN PROPERTY GROUP, INC. a/k/a
METROPOLITAN PROPERTY GROUP II, INC. (“MPG”), is a brokerage company servicing
the residential and commercial real estate market in Manhattan, with over 200 agents at the
following three offices: (a) 184 Fifth Avenue, 3rd Floor, New York, NY 10010 (“Defendant
MPG’s Fifth Avenue Office”); (b) 255 West 36th Street, Suite 406, New York, NY, 10018; and
(c) 369 Lexington Avenue, Suite 1202, New York, NY 10017. Upon information and belief,
MPG started as a residential rental firm in 1998, and claims to have “cultivated and maintained
relationships with the most sought after landlords and management companies.”1
4. Presumably through the relationships Defendant MPG and its real estate agents
have allegedly cultivated, they have controlled, managed, operated, offered and advertised illegal
short-term rentals within the Subject Buildings as well as at least 30 other permanent residential
1 https://www.metropolitanpropertygroup.com/index.cfm?page=about
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buildings in Manhattan since at least 2014 with an estimate of at least 130 different apartments
converted from permanent residences to transient accommodations. The MPG’s agents who
have controlled, managed, operated, offered, and advertised such illegal short-term rentals,
include but are not limited to the following five Defendants (collectively, “Individual Operator
Defendants” or “MPG Brokers”):
(a) MAXIM BECKMAN (“Beckman”), a real estate agent affiliated with MPG;
(b) SIMON ITAH a/k/a SHIMON ITAH (“Itah”), a real estate agent affiliated with
MPG;
(c) ALON KARASENTY (“Karasenty”), a real estate agent affiliated with MPG;
(d) SAMI KATRI (“Katri”), a real estate agent, and founder, President and Chief
Executive Officer (“CEO”) of Defendant MPG; and
(e) SHELY KATRI a/k/a SHELY VITENSHTEIN (“Vitenshtein”),2 a licensed real
estate salesperson for Defendant MPG.
5. Defendants MPG and MPG Brokers have offered and advertised illegal short-term
rentals on online platforms such as www.Airbnb.com (“Airbnb”) through approximately 250
listings via about 101 hosts accounts.
6. Defendants MPG and MPG Brokers often utilized identical contact information
and inaccurate addresses to set up these numerous distinct Airbnb host accounts and listings, in
clear contravention of the online platform’s stated restrictions on the number of host accounts
and listing addresses to be utilized by any one individual or entity.3
2 To avoid confusion between Defendant Sami Katri and Defendant Shely Katri, Defendant Shely Katri is referred to by her maiden name “Vitenshtein.”
3 According to Airbnb’s “terms of service,” a host “may not register more than one (1) Airbnb Account.” https://www.airbnb.com/terms.
4
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7. For example, the phone number -9786 is associated with at least 19
different Airbnb host accounts for Defendants Beckman, Itah, Karasenty, and Vitenshtein,
featuring host names like “Alon Karas,” “Elona Karasen,” “David Itah,” “Pola Lamm”, and
“Molik Beckman” among others. Similarly, the phone number -3743 is associated with
11 distinct Airbnb host accounts that have been linked to Defendants Beckman, Itah, Karasenty,
and Vitenshtein, featuring host names such as “Alon Karasenty,” “Eti I,” “Offek Itah,” and
“Shely Vitenshtein,” – Defendant Vitenshtein – among other names.
8. Furthermore, Defendants MPG and MPG Brokers have offered and advertised
illegal short-term rentals on Airbnb with incomplete or false information about the
accommodation location, all but guaranteed to cause confusion for any consumers utilizing the
Airbnb service. Specifically, 167 out of the 250 listings OSE has identified as MPG listings
provided no house number to Airbnb, and nine listings provided no address information. An
additional 34 listings provided a seemingly deliberately incorrect, though complete, building
address.
9. For example, Defendants MPG and MPG Brokers provided Airbnb an address of
only “East 116th Street” with no house number for 11 different Airbnb listings, to simultaneously
advertise nightly rentals at multiple apartments at 200 East 116th Street. The City’s 2018
inspections have found that all seven apartments in this East Harlem building have been
On November 1, 2016, Airbnb launched a “one host, one home” policy for New York City, and states in an update on that policy that it is “concerned about hosts who may offer space that could otherwise have been on the long-term rental housing market in New York City.” https://www.airbnbcitizen.com/wp-content/uploads/2016/07/OneHostOneHomeNewYorkCity-1.pdf.
The site explains that, in “New York, NY,” “Hosts in select locations are only allowed to have listings at a single address within these locations. Hosts can have multiple listings at that address, but can’t have listings at different addresses.” https://www.airbnb.com/help/article/1333/why-can-t-i-have-listings-at-more-than-one-address-in-select-locations.
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converted from permanent housing to unlawful and unsafe transient lodgings for deceived
tourists.
10. Equally distressing, in order to receive their approximately $21 million dollars of
illegal short-term rental revenue generated through Airbnb, Defendants MPG and MPG Brokers
also set up the following 18 Defendant corporate entities, many of them featuring permutations
of the Named Defendants’ first and last initials: (a) ALSI PROPERTIES LLC (“Alsi”); (b)
AMS GROUP NYC, CORP a/k/a AMS GROUP a/k/a ANS GROUP (“AMS”); (c) BKI GROUP
LLC (“BKI”); (d) CLEAN STAY SERVICES INC a/k/a STAY CLEAN SERVICES (“Clean
Stay Services”); (e) DSG GROUP LLC (“DSG”); (f) ERESOE HOUSING LLC a/k/a ERESOE
HOLDING (“Eresoe”); (g) HELLO SERVICES INC (“Hello Services”); (h) IGA SERVICES
INC a/k/a IGA SERVICES (“IGA”); (i) IKB GROUP, INC. (“IKB”); (j) KBI GROUP LLC
(“KBI”); (k) KIB GROUP LLC (“KIB”); (l) MASS GROUP, INC. (“Mass”); (m) MIB
SERVICE INC a/k/a MIB SERVICES INC a/k/a MIB SERVICES (“MIB”); (n) MIDTOWN
WEST APTS, INC a/k/a MIDTOWN WEST APTS (“Midtown West”); (o) MIDTOWN APTS,
INC a/k/a MIDTOWN APTS a/k/a MIDTOWN APT a/k/a MIDOWN APTS a/k/a MIDROWN
APTS (“Midtown”); (p) SIMA HARLEM GROUP LLC a/k/a SIMA HARLEM GROUP
(“SIMA”); (q) SPARGO GROUP, INC. a/k/a SPARGO GROUP a/k/a SPARGO INC a/k/a
NYC SPARGO (“SPARGO”); and (r) SSAM GROUP, INC a/k/a SSAM GROUP a/k/a SSAM
(“SSAM”) (collectively with Defendants MPG and MPG Brokers, “Operator Defendants”).
11. From 2015 to 2018 alone, Operator Defendants, conducted over 13,600 illegal
short-term rental reservations spanning 55,000 nights, deceiving almost 76,000 guests through
their unlawful advertisements on Airbnb. The ill-gotten gains from just under 3,000 of these
illegal short-term rental transactions, totaling almost $4.2 million, were made payable directly to
6
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Defendant MPG’s Fifth Avenue Office. This astonishing amount of illegal short-term rental
transactions and revenue generated seems to place Operator Defendants among “the top 10% of
hosts earned a staggering 48% of all revenue.”4
12. Out of the approximately 250 Airbnb listings by Operator Defendants offering
unlawful transient accommodations, the City has identified at least 61 advertising nightly short-
term rentals for entire apartments within the Subject Buildings, without disclosing that such
occupancy is both illegal and unsafe.
13. In addition to the City’s encountering several of the MPG Brokers during separate
inspections of illegal short-term rentals in Manhattan, ConEd records list the MPG Brokers
and/or their family and associates as the utility account holders of multiple residential dwelling
units within the Subject Buildings, where illegal short-term rentals were found and advertised.
14. Operator Defendants have ignored actions from some responsible building
owners, and the City’s efforts to shut down their illegal short-term rental operations, with their
deceptive advertisements on Airbnb still up and available to unsuspecting tourists to this day.
15. In fact, even after the City personally served the Operator Defendants with the 5-
day Notice of Lawsuit signed by Michael Tiger, Deputy General Counsel of New York City
Department of Consumer Affairs, informing them that their short-term rental advertisements on
Airbnb are illegal, and of the City’s intention of filing a lawsuit against them, Operator
Defendants still kept their deceptive advertisements up on Airbnb, and an illegal short-term
rental was found on January 9, 2019 at one of the Subject Buildings located at 230 East 30th
Street.
4 A January 2018 report by Professor Wachsmuth of McGill University entitled “The High Cost of Short-Term Rentals in New York City” (“January 2018 Wachsmuth Airbnb Report”) found that “The top 10% of hosts earned a staggering 48% of all revenue last year [2017], while the bottom 80% of hosts earned just 32%.” https://mcgill.ca/newsroom/files/newsroom/channels/attach/airbnb-report.pdf at 2.
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16. For four years, the City has discovered illegal, deceptive, and hazardous transient
occupancies in multiple apartments in the Subject Buildings, owned and/or managed by the
following eight Defendants: LINMAR, L.P. (“Linmar”); LINMAR GROUP, LLC (“Linmar
Group”); 200 GROUP, LLC (“200 Group”); HELM MANAGEMENT, INC. (“Helm
Management”); CARALEX HOLDINGS, LLC (“Caralex Holdings”); ABINGTON HOLDING,
LLC; (“Abington Holding”); 230 EAST 30TH LLC (“230 East 30th”); and 2118 GROUP, LLC
(“2118 Group”) (collectively, “Owner Defendants”). Owner Defendants could easily, but refuse
to, properly monitor the persistent, unlawful short-term rentals taking place in their buildings.
17. In attempting to abate Defendants’ operation through extensive pre-litigation
enforcement efforts since 2014, the City has conducted no fewer than 17 administrative code
inspections of the Subject Buildings, and has taken enforcement actions including the issuance
of 58 Notices of Violations (“NOVs”)/Summonses with Commissioners’ Orders to certify
correction of violating conditions to the Subject Buildings’ owners by the New York City Fire
Department (“FDNY”) and New York City Department of Buildings (“DOB”). Defendants
continue their illegal hotel operation despite the “in violation” adjudications of
38 NOVs/Summonses already heard by the Office of Administrative Trials and Hearings/New
York City Environmental Control Board (“OATH/ECB”)5, and the pending prosecutions of
FDNY Criminal Court Summonses.
18. Instead, Owner Defendants permitted over 4,600 illegal short-term rental
reservations spanning almost 20,000 nights, with over 25,000 guests staying in the Subject
Buildings between 2015 and 2018, generating almost $6.2 million dollars in revenue in the same
5 18 out of the 58 total Summonses issued are pending adjudication at OATH.
8
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period through Airbnb.6 Moreover, this astonishing figure is compounded by the fact that Owner
Defendants permitted Operator Defendants to simultaneously operate and advertise illegal short-
term rentals in multiple apartments in the Subject Buildings.
19. In stark contrast to some responsible building owners in the City, who took
assertive actions against illegal short-term rentals, including filing complaints with OSE against
Operator Defendants, Owner Defendants here took no action whatsoever against Operator
Defendants.
20. Furthermore, Owner Defendants have repeatedly treated the violations and civil
penalties levied on them after administrative hearings as the cost of doing business – with more
than $150,650.00 in penalties imposed thus far – regularly submitting Certificates of Correction
to the DOB after each violation and before first hearing dates in order to mitigate penalties
imposed. Owner Defendants’ agents have sworn conclusory each time that transient use has
been discontinued in a given apartment and throughout the entire building. But in reality, they
repeatedly permitted the illegal transient business to continue in the Subject Buildings.
21. While Owner Defendants have failed to adequately maintain the Subject
Buildings in a safe and code-compliant manner – unlawfully converting at least 47 apartments
from permanent homes for New Yorkers to dangerous and illegal short-term rentals for tourists –
fewer and fewer apartments in the Subject Buildings remain available to New Yorkers.
22. The Subject Buildings and illegal short-term rentals operated and advertised by
Operator Defendants are all located in Manhattan in the neighborhoods of Kips Bay, Midtown,
6 All revenue information is from 2015 to 2018 as the subpoena response from Airbnb only concerned payout transactions from January 1, 2015 to October 22, 2018.
9
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and East Harlem, where a majority of all Airbnb listings in New York City are located,
contributing to increased rental housing prices and reduction in the housing supply.7
23. The City brings this action first to stop the public nuisance being maintained by
all Defendants at the Subject Buildings, including: (1) the illegal rental of permanent residential
dwelling units to numerous transient occupants, without having the more stringent fire and safety
features required in buildings legally designed to serve transient occupants; (2) the creation of
significant risks in buildings not staffed to handle the security issues associated with transient
occupancy, and a degradation in the quiet enjoyment, safety, and comfort of permanent residents
in the Subject Buildings and in neighboring buildings caused by noise, filth, and the excessive
traffic of unknown and constantly changing individuals entering their homes; and (3) the
unlawful reduction of the permanent housing stock available to the residents of New York City
at a time when there is a legislatively declared housing emergency. The conditions created by
Defendants’ illegal conduct in the Subject Buildings negatively affect the health, safety, security,
and general welfare of the residents of the City of New York and its visitors.
7 The damage to New York City housing from illegal short-term rentals has been documented in multiple recent reports. For example, the January 2018 Wachsmuth Airbnb Report estimated that “Airbnb has removed between 7,000 and 13,500 units of housing from New York City’s long-term rental market, including 12,200 frequently rented entire-home listings that were available for rent 120 days or more, and 5,600 entire-home listings available for rent 240 days or more.” https://mcgill.ca/newsroom/files/newsroom/channels/attach/airbnb-report.pdf at 2.
A June 2016 report from MFY Legal Services titled “Short Changing New York City – The Impact of Airbnb on New York City’s Housing Market” specified “Chelsea/Hell’s Kitchen, West Village/Greenwich Village” as two of the five “macro-neighborhoods” where 53 percent of all Airbnb listings are located, where some of the Subject Buildings and other buildings where Operator Defendants conduct illegal short-term rentals are located. http://www.hcc-nyc.org/documents/ShortchangingNYC2016FINALprotected_000.pdf at 5.
In its 2015 report titled “State of New York City’s Housing and Neighborhoods in 2015,” New York University’s Furman Center for Real Estate and Urban Policy identified rapid increases in housing prices between 1990 and 2014, reduction in the supply of affordable housing, and changes in neighborhood composition. http://furmancenter.org/research/sonychan/2015-report.
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24. The City also brings this action because Operator Defendants have been
repeatedly committing deceptive trade practices against visitors and tourists seeking short-term
accommodations in New York City, implicitly holding themselves out as engaging in a legal
business, when in fact they are conducting a business which places consumers in illegal
occupancies and exposes them to serious fire safety risks. These practices include advertising
and promoting the booking of illegal short-term accommodations in the Subject Buildings,
properties in which transient, short-term occupancies of less than 30 days are prohibited by New
York State and City laws.
25. The City brings this action pursuant to and by the authority of: Section 20 of the
New York General City Law; Section 394 of the New York City Charter; Section 20-703 of the
Administrative Code of the City of New York (“Admin. Code”), in order to enforce the
Consumer Protection Law of 1969, Title 20, Chapter 5, Subchapter 1, Section 20-700 et seq., of
the Admin. Code (the “Consumer Protection Law”); Section 306 of the New York Multiple
Dwelling Law (“MDL”); Sections 28-205.1, 7-704, and 7-706 of the Admin. Code; and pursuant
to the common law doctrine of public nuisance.
26. By this action, the City seeks preliminary and permanent injunctive relief and the
imposition of civil statutory penalties and compensatory and punitive damages against the
owners, managers, lessees, licensees, operators, and agents of the Subject Buildings, and against
the Subject Buildings themselves, for violations under the Admin. Code, the Consumer
Protection Law (“CPL”), the New York City Building Code (“Building Code”), the MDL, and
the New York Housing Maintenance Code (“HMC”), for creating nuisances as defined in the
New York City Nuisance Abatement Law (Admin. Code § 7-701, et seq.); and for creating
common law public nuisances.
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BACKGROUND
27. The Mayor’s Office of Special Enforcement (“OSE”) is a governmental entity
established by Mayoral Executive Order No. 96 of 2006, to address quality of life issues
citywide, including illegal hotels, lawless clubs and adult establishments, and trademark
counterfeiting bazaars. To accomplish its duties, OSE oversees and conducts joint investigations
and inspections with various City agencies to bring unsafe conditions into compliance with the
law. When property owners fail to remedy violating conditions for an extended period of time
through administrative enforcement mechanisms, the City seeks remedies in courts pursuant to
the Nuisance Abatement Law and other statutes to compel compliance and halt flagrant
violations. Through Mayoral Executive Order No. 22 of 2016, OSE is also tasked with enforcing
unlawful advertising of illegal occupancy in multiple dwellings.
28. Tourists and other visitors to New York City have been enticed by misleading
advertisements on numerous internet websites for short-term apartment accommodations located
within buildings designed and constructed only for permanent residency. Many of these visitors
are unwittingly led to book accommodations which are not only illegal, but also pose a
heightened risk to their health and safety, as well as to the health and safety of the lawful tenants
of those buildings. A business that misleads consumers by purveying illegal and unsafe
consumer goods or services without any indication that they are not legal or safe commits a
deceptive trade practice prohibited by federal, state, and local consumer protection laws. See
Admin. Code §§ 20-700 to 20-706.
29. Advertising, booking, and permitting transient accommodations in buildings
where such accommodations are illegal creates a public nuisance under both the Nuisance
Abatement Law and the common law. The law has long recognized that the conditions and
practices complained of herein, which endanger or injure the property, health, safety, or comfort
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of a considerable number of persons, constitute a public nuisance adversely affecting both
tourists and visitors to New York City, those who may lawfully reside in residential units in the
Subject Buildings, as well as neighbors and emergency personnel who would respond to any
situation at the Subject Buildings.
30. The City continually receives complaints about unlawful short-term transient
occupancies from many sources – calls to “311,” letters and emails from the public,
communications from elected officials and community groups – regarding excessive noise from
tourists, overflowing trash, vomit in hallways, fires, loud fighting, drugs, prostitution, and the
like.
31. Despite occupancy and safety rules prohibiting such use, dwelling units in
permanent residential apartment buildings in New York City are increasingly being utilized as
transient, short-term occupancy units for tourists and other visitors rather than tenants who intend
to establish a permanent residence. This practice has been abetted by the phenomenal growth of
the internet travel industry, and comes at a time when affordable housing accommodations for
the residents of New York City remain at historically low levels.
32. The spread of illegal transient occupancies, which some observers in New York
City have termed an “epidemic,”8 creates a number of serious problems for the City:
(1) a growing number of complaints from tourists who book accommodations over the internet, in most cases responding to advertisements unaware that rooms are being offered in violation of the law;
(2) serious safety hazards, in particular with regard to fire protection, as code requirements for permanent residency buildings are not nearly as stringent as those for units and buildings geared to transient occupancy, and also with regard to severe overcrowding;
8 “Hey, Wanna Rent My Couch; Short-term rentals have officially become illegal – and sneaking around the law has officially become epidemic,” by S. Jhoanna Robeldo, New York, November 27, 2011.
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(3) a burgeoning number of transient occupants, inter-mixed with permanent residents and neighbors, whose presence poses significant risks in buildings not equipped to handle the security problems associated with transient occupancy, as well as a degradation of quality of life for residents and neighbors;
(4) harassment of permanent tenants by owners who seek to evict those tenants illegally in order to pursue a more lucrative (albeit unlawful) transient market; and
(5) an illegal siphoning off of a significant portion of the city’s housing stock, occurring most acutely in the affordable housing sector.9
33. Due to these deleterious effects on the housing market and the safety concerns for
residents, tourists, the general public and emergency response personnel, illegal hotel operations
are a point of particular concern to the City and State governments in protecting New Yorkers’
quality of life.
34. To begin to address the illegal transient occupancy situation, the Legislature
enacted Chapter 225 of the Laws of New York State of 2010 (“Chapter 225”). Chapter 225,
which went into effect on May 1, 2011, prohibits renting units in Class “A” multiple dwellings,
as defined under the MDL10 and the HMC for less than 30 days.
35. The Legislature enacted Chapter 225 in response to the First Department’s 2009
City of New York v. 330 Continental LLC decision (60 A.D.3d 226), amending the MDL and
9 The City’s “acute shortage of dwellings” has created an affordable housing crisis that is a “serious public emergency.” See Emergency Housing Rent Control Law § 1, codified as N.Y. Unconsol. Law Ch. 249, § 1 (Lexis 2016) (making these legislative findings in establishing rent control system). See also Local Emergency Housing Rent Control Act § 1(2), codified as N.Y. Unconsol. Law Ch. 249-A, § 1(2) (Lexis 2016), Emergency Tenant Protection Act of Nineteen Seventy-Four § 2, codified as N.Y. Unconsol. Law Ch. 249-B, § 2 (Lexis 2016) (making identical legislative findings in establishing successor rent stabilization systems); and Bucho Holding Co. v. Temporary State Housing Rent Comm., 11 N.Y.2d 469, 473 (1962) (“The existence of an emergency justifying continued control of rents in the areas here involved may not [be], and indeed is not, denied.”).
10 In 1929, the Legislature enacted the MDL to “ensure the establishment and maintenance of proper housing standards requiring sufficient light, air, sanitation and protection from fire hazards.” See MDL § 2. The 1929 MDL created two distinct and mutually exclusive classifications of buildings that continue in the law today: “Class A” buildings used for permanent residence use, and “Class B” housing intended for short-term transient use. The MDL defines buildings used for permanent residence purposes, such as “tenements, flat houses, maisonette apartments, [and] apartment houses,” as Class A. See MDL § 4(4) (now, § 4(8)(a)). Similarly, the MDL defines buildings typically used for transient purposes, such as “hotels, lodging houses, rooming houses, [and] boarding houses,” as Class B. See MDL § 4(4) (now, § 4(9)(a)).
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other related laws to make clear, among other things, that the rental of any unit in a Class “A”
building for less than 30 days is prohibited. The legislative justification for Chapter 225 was
explained by the law’s sponsor in this manner:
The Multiple Dwelling Law and local Building, Fire and Housing Maintenance Codes establish stricter fire safety standards for dwellings such as hotels that rent rooms on a day to day (transient) basis than the standards for dwellings intended for month to month (permanent) residence. There are substantial penalties for owners who use dwellings constructed for permanent occupancy (Class A) as illegal hotels. However, the economic incentive for this unlawful and dangerous practice has increased, while it is easier than ever to advertise illegal hotel rooms for rent to tourists over the internet. This is especially so in New York City, which is attracting visitors and tourists from around the world in record numbers. In most cases tourists responding to such advertisements are unaware that the rooms are being offered in violation of the law. Not only does this practice offer unfair competition to legitimate hotels that have made substantial investments to comply with the law but it is unfair to the legitimate “permanent” occupants of such dwellings who must endure the inconvenience of hotel occupancy in their buildings and it decreases the supply of affordable permanent housing. It endangers both the legal and illegal occupants of the building because it does not comply with fire and safety codes for transient use. Recently, law enforcement actions against illegal hotels have been hindered by challenges to the interpretation of “permanent residence” that enforcing agencies have relied on for decades.
New York State Assembly Memorandum in Support of Legislation (S. 6873-B, 233rd Leg. (N.Y.
2010 (Sponsor’s Memo)) Bill No. A10008).
36. The plain language of the law, supported by its legislative history, makes clear
that the Legislature intended to eliminate all transient use in “all Class A buildings in existence”
as of the bill’s enactment and all those constructed thereafter. See Ch. 225 of the Laws of 2010,
at § 8; Governor’s Bill Jacket, Ch. 225 of the Laws of 2010, at 6 -17. No Class A building was
exempted from its coverage.
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37. Following the Legislature’s clear intent in Chapter 225, the First Department has
unequivocally held that the Chapter 225 provisions applied to all buildings in existence on the
date of its enactment, and no dwelling unit in a Class A multiple dwelling can be used
transiently. Matter of Grand Imperial, LLC v. New York City Bd. of Stds. & Appeals,
137 A.D.3d 579 (1st Dep’t), lv. denied, 28 N.Y.3d 907 (2016) (“[I]n enacting the amendments,
the legislature’s intent that a 30-day minimum occupancy requirement would apply to all, with
only narrow, specified exceptions, was sufficiently clear that petitioner’s saving clause right to
continue renting for the shorter period was extinguished.”) (internal citation omitted); Matter of
Terrilee 97th Street LLC v. N.Y.C. Envtl. Control Bd., 146 A.D.3d 716 (1st Dep’t), lv. to reargue
or appeal denied, 2017 N.Y. Slip. Op. 86314(U) (Sept. 19, 2017) (“Under the Multiple Dwelling
Law, as amended effective May 1, 2011, none of the units in petitioner’s Class A multiple
dwelling may be used for occupancy periods shorter than 30 days.”) (citations omitted).
38. The advertising, maintenance and operation of permanent residential properties
for transient occupancy where such use is prohibited and unsafe deceives consumers and creates
a public nuisance endangering or injuring the property, health, safety and comfort of residents in
those buildings, residents in surrounding areas, and tourists and visitors to New York City.
39. Most recently in 2016, as a further step to address this issue, the Legislature
amended the MDL and Administrative Code to expressly prohibit advertising the use or
occupancy of dwelling units in Class A multiple dwellings for other than permanent residence
purposes (i.e., short-term rental for less than 30 days). The law’s sponsor explained the
justification for adding a new Section 121 to the MDL and a new Article 18 to subchapter three
of chapter one of title 27 of the Admin. Code (i.e., Admin. Code § 27-287.1) as follows:
In 2010, in the face of an explosion of illegal hotel operators in single room occupancy buildings in New York City, New York
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State clarified and strengthened the laws regarding transient occupancy in class A multiple dwellings. Now, with the proliferation of online home sharing platforms that allow users to advertise their apartments for use that directly violates New York State’s “illegal hotels” law, the purpose of the “illegal hotels” law is at risk of being undone.
While it is already illegal to occupy a class A multiple dwelling for less than 30 days, this legislation would clarify that it also illegal to advertise units for occupancy that would violate New York law. However, online home sharing platforms still contain advertisements for use of units that would violate New York law. It rests with the city and state to protect communities and existing affordable housing stock by prohibiting advertisements that violate the law, creating a civil penalty structure for those who violate the prohibition, and clarifying activities that constitute advertising.
New York State Senate Memorandum in Support of Legislation (A. 8704 C, 239th Leg. (N.Y.
2016 (Sponsor’s Memo)) Bill No. S6340A) (emphasis added).
PARTIES
40. Plaintiff, the City, is a municipal corporation incorporated under the laws of the
State of New York.
41. Defendant METROPOLITAN PROPERTY GROUP, INC., a New York domestic
business corporation, has business and offices in the City and State of New York. Defendant
MPG’s CEO is Defendant Katri, and according to its website it has “over 200 agents.”
Defendants Beckman, Itah, Karasenty, Katri, and Vitenshtein were at all relevant times brokers
at Defendant MPG, and were all part of the illegal short-term rental operations which generated
just under $21.4 million of illegal revenue through Airbnb between 2015 and 2018.
42. Upon information and belief, Defendants advertised at least 61 illegal short-term
rental listings for entire apartments on Airbnb for the Subject Buildings, and advertised
approximately 181 illegal short-term rental listings on Airbnb for at least 30 other permanent
residential buildings in Manhattan, to support Defendant MPG’s illegal short-term rental
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operations. As such, almost 13,700 illegal short-term rental reservations took place, generating
a total of approximately $21 million in revenue from 2015 to 2018, and deceiving almost 76,000
transient guests who booked their accommodations through Airbnb.
43. Under Defendant Katri’s management, Defendant MPG has an F rating from the
Better Business Bureau,11 and has previously come under scrutiny for misleading advertisements
as far back as 2005, when renters reported being charged fees for listings advertised as no-fee.
At that time, Defendant Katri stated that any brokers engaging in such practice would be fired,12
although recent reviews suggest it continues to occur at Defendant MPG.
44. Defendant MAXIM BECKMAN, a natural person, upon information and belief, is
and at all times relevant has been actively engaged in the illegal advertising and operation of
transient rentals of permanent residential multiple dwelling units in the City and State of New
York, including the ones in the Subject Buildings.
45. Upon information and belief, Defendant Beckman was a licensed real estate
broker at all times relevant with Defendant MPG, although he appears to have allowed his
license to lapse.13 Airbnb subpoena response records show that the illegal advertisements for
short-term rentals associated with Defendant Beckman generated approximately $1.8 million in
revenue between 2015 and 2018 from the Subject Buildings, and approximately $4.5 million in
revenue from other permanent residential buildings in Manhattan during the same timeframe.
46. Upon information and belief, Defendant Beckman appears to handle much of the
staffing for Defendant MPG’s illegal short-term rental business, advertised, and operated via
11 https://www.bbb.org/us/ny/new-york/profile/real-estate-services/metropolitan-property-group-0121- 77702/complaints.
12 https://therealdeal.com/issues_articles/cracking-down-on-phony-ads/.
13 https://www.linkedin.com/in/max-beckman-a8a265b.
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Airbnb. His phone number, 347-578-5777, appears in several advertisements for housekeeping
services, including one from 2014 entitled “full time girl needed for vacation rentals” that sought
someone to clean, organize, and refresh apartments.14
47. Phone numbers associated with Defendant Beckman are related to seven Airbnb
host accounts created between 2013 and 2018 for the Operator Defendants’ illegal short-term
rental operation. Upon information and belief, Defendant Beckman is married to Inga Ograintz
Beckman. An additional 25 Airbnb host accounts with host names or email addresses linked to
Defendant Beckman and Ograintz family associates were also used to conduct illegal short-term
rentals.
48. On or about October 20, 2018, Defendant Beckman confronted OSE inspectors in
East Harlem as they were conducting illegal short-term rental inspections. Defendant Beckman
claimed that he only “occasionally” has guests, and asked OSE inspectors “how can we resolve
the short-term rental situation?” Upon further inquiry, Defendant Beckman provided that he had
one or two locations where he conducted illegal short-term rentals, offering accommodations to
“up to four guests” at a time.
49. On January 27, 2017, Defendant Beckman, along with Defendants Itah and
Karasenty, purchased 311 East 119 Street, a 4-unit residential building in East Harlem, for
$1,825,000.00. On January 28, 2017, a day after Defendants Beckman, Itah and Karasenty
purchased the building, 311 East 119th Street was transferred in a related-party transaction
without consideration to East 119 Group LLC, headquartered at 167 Madison Avenue, Room
305, New York, New York 10016 (“Defendant MPG Brokers’ Madison Avenue Office”), an
address used by Operator Defendants to receive about $15.4 million in revenue between 2015
14 https://www.facebook.com/groups/rotfront.newyork/search/?query=347-578-5777&epa=SEARCH_BOX.
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and 2018 from over 10,000 illegal short-term reservations on Airbnb. Upon information and
belief, Defendants MPG Brokers advertised and operated illegal short-term rentals at 311 East
119th Street via Airbnb.
50. Through Airbnb, Defendant Beckman along with Defendants Itah and Karasenty
also offered and ran an illegal short-term rental operation at 385 Greenwich Street in Tribeca,
where they have a rental agreement with the building owner. Although the rental agreement was
entered into by Defendants Beckman, Itah and Karasenty, the rental payments were made by
Defendants Beckman, Spargo, and DSG. In March 15, 2018, the building owner responsibly
forced Defendants Beckman, Itah, and Karasenty to surrender the apartment at 385 Greenwich
Street, on the basis of their illegal short-term rental operation.
51. Upon information and belief, Defendant Beckman has extensive affiliation with
real estate related corporate entities, several of which OSE has linked to illegal short-term
rentals. He is the listed recipient of process served through the Department of State for
Corporate Operator Defendant MIB Service Inc., as well as non-defendants KBB Equities Group
Corp., and MGA Hospitality Group Inc. He is also the vice president of MSM Funding Group
Inc.; the manager of KSB Funding Group Corp.; and the CEO of Seven Stars Hospitality Group,
Inc.15
52. Defendant SIMON ITAH, a natural person, upon information and belief, is and at
all times relevant has been, actively engaged in the illegal advertising and operation of transient
rentals of permanent residential multiple dwelling units in the City and State of New York,
including the ones in the Subject Buildings.
15 Those entities also appeared as beneficiaries to receive illegal short-term rental revenues for all of the locations affiliated with the City of New York v. Pavlenok investigation. 2018 N.Y. Misc. LEXIS 4101, Index No. 451832/2018 (Sup. Ct. N.Y. Co. Sept. 13, 2018). The records also suggest that Defendant Beckman operated illegal short-term rentals in the City with business partners Mark Kaminsky and Stepan Solyev.
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53. Upon information and belief, Defendant Itah was a licensed real estate broker at
all times relevant with Defendant MPG, although he appears to have allowed his license to
lapse.16 He is named in several of Defendant MPG’s advertisements for its alleged lawful real
estate business along with Defendant Karasenty.17
54. Phone numbers in Defendant Itah’s name are associated with 13 of the 101
Airbnb host accounts for illegal short-term rentals, and nine additional Airbnb host accounts
have names or email addresses that appear associated with Defendant Itah, or his family
members. Records show that the illegal advertisements for short-term rentals on Airbnb
associated with Defendant Itah generated approximately $1.1 million of revenue between 2015
and 2018 from the Subject Buildings, and approximately $2.2 million of revenue for other
permanent residential buildings in Manhattan during the same timeframe.
55. Defendant Itah is a registered agent for the following four Corporate Operator
Defendants, which between 2015 and 2018 directly received over $3.7 million in revenue from
Operator Defendants’ illegal short-term rentals through Airbnb: (a) ALSI PROPERTIES LLC;
(b) DSG GROUP LLC; (c) ERESOE HOUSING LLC; and (d) SIMA HARLEM GROUP
LLC.18
16 https://www.agorafy.com/listing/167638/212-East-14th-Street-Apartment-for-Lease-4BR-2.0BA-1R.
17 https://agorafy.com/listing/135140/221-Malcolm-X-Boulevard-Apartment-for-Lease-4BR-2.0BA-3.
18 Defendant Itah was previously listed as the officer for several now-defunct business entities in Florida, including an entity called “Kids Inspired Daily Society Inc.” which was also affiliated with Leedor Amrani, an individual associated with Airbnb host accounts used in Operator Defendants’ illegal short-term rental operation. http://search.sunbiz.org/Inquiry/CorporationSearch/ConvertTiffToPDF?storagePath=COR%5C2010%5C0406%5C4 0213364.tif&documentNumber=N10000003391.
Defendant Itah may also be affiliated with illegal vacation rentals in Florida, as a respondent by the same name was fined in Miami Beach for running illegal short-term rentals and was referred to as a “New York investor” in the press. https://therealdeal.com/miami/2016/08/24/miami-beach-fined-short-term-rentals-1-6m-over-the-last-five-months/
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56. Defendant ALON KARASENTY, a natural person, upon information and belief,
is and at all times relevant has been, actively engaged in the illegal advertising and operation of
transient rentals of permanent residential multiple dwelling units in the City and State of New
York, including the ones in the Subject Buildings.
57. Upon information and belief, Defendant Karasenty was a licensed real estate
broker at all times relevant with Defendant MPG, although he appears to have allowed his
license to lapse.19 Records show that the illegal advertisements for short-term rentals on Airbnb
associated with Defendant Karasenty generated approximately $2.9 million in revenue between
2015 and 2018 from the Subject Buildings, and approximately $8.9 million in revenue from
other permanent residential buildings in Manhattan during the same timeframe.
58. In the fall of 2017, the building owner of 354 Central Park West filed a complaint
with OSE alleging that Defendant Karasenty had rented an apartment in the building, and had
subsequently revealed his intention to operate the unit as an illegal short-term rental. Defendant
Karasenty allegedly stated that he ran over 250 such illegal short-term rental locations in the City
with his wife, and he submitted as part of his lease application a letter from an accountant
asserting that he had earned $427,000 in 2016. As part of the lease application, Defendant
Karasenty also provided his address as Defendant MPG’s Fifth Avenue Office.
59. Numerous building owners have also made complaints to OSE about Defendant
Karasenty due to his illegal short-term rental operations in their buildings, including142 West
132nd Street and 385 Greenwich Street.
60. Phone numbers in Defendant Karasenty’s name are associated with 32 of the 101
distinct Airbnb host accounts associated with Operator Defendants’ illegal short-term rental
operation, including several linked to phone number -7707, the same phone number that
19 https://streeteasy.com/profile/834242-alon-karasenty.
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also appears in the majority of Defendant Karasenty’s lawful long-term rental listings through
Defendant MPG.
61. On or about March 13, 2018, Defendant Karasenty confronted OSE inspectors as
they completed posting the illegal short-term rental violations issued against one of the Subject
Buildings: 200 East 116th Street. Defendant Karasenty provided that he is a real estate agent, but
claimed that he did not remember which apartment in the building was responsible for.
Defendant Karasenty proceeded to physically remove the posted violations from the front
entrance of 200 East 116th Street. When OSE inspectors requested Defendant Karasenty’s
authority to do so, he refused to elaborate and simply returned the posted violations to the OSE
inspectors.
62. DOB Inspector Cautela also issued two advertising summonses to Defendant
Karasenty for his March 14, 2018 and March 28, 2018 illegal advertisements of 214 East 24th Street
in Manhattan for transient stays on Airbnb.
63. On January 7, 2019, the OSE Inspection Team, including New York City Police
Department Sergeant, Kenneth Caesar, who is assigned to OSE, personally served Defendant
Karasenty with the 5-day Notice of Lawsuit signed by Michael Tiger, Deputy General Counsel
of New York City Department of Consumer Affairs and advertising summonses. After looking
over the 5-day Notice of Lawsuit, Defendant Karasenty appeared nervous, and provided that
Defendants Itah and Beckman are “my partners,” and the list of Defendant corporate entities on
the 5-day Notice of Lawsuit are “our companies.” When asked if he works for Defendant MPG,
Defendant Karasenty provided that Defendants Itah, Beckman, and he used to work for
Defendant MPG, but they have left because they “found a better way.”
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64. Upon information and belief, Defendant Karasenty is married to Shelly Lam. It
appears that between 2015 and 2018, Operator Defendants created at least 19 distinct Airbnb
host accounts to operate illegal short-term rentals under the name of Shelly Lam and her family
members, including her parents Paula and Volko Lam and possibly her brother Eric Lam.20
65. Much like MPG’s overall reputation, Defendant Karasenty has several negative
reviews from long-term residents who encountered him as a residential broker, prompting one
user to complain that “working with this company has been one of the worst experiences of my
life”21 because Defendant Karasenty introduced additional fees and then refused to provide a
refund when the apartment was no longer available.
66. Defendant SAMI KATRI, a natural person, upon information and belief, is and at
all times relevant has been, actively engaged in the illegal advertising and operation of transient
rentals of permanent residential multiple dwelling units in the City and State of New York,
including the ones in the Subject Buildings. Records show that the illegal advertisements for
short-term rentals on Airbnb associated with Defendant Katri generated approximately $171,000
in revenue between 2015 and 2018 from the Subject Buildings. 22
67. Defendant Katri, is a licensed real estate broker, in addition to the President and
CEO of Defendant MPG. Several of his current long term listings are in the Subject Buildings,
as well as in additional buildings liked to MPG illegal operation, including 230 East 30th Street, a
Subject Building, as well as 220 East 24th Street and 227 Mulberry Street.
20 Additionally, Shelly Lam is the registered agent for SKSK Properties LLC, an entity registered to do business in the State of New York in October 2017, with a business address listed at Defendant MPG’s Fifth Avenue Office.
21 https://www.yelp.ie/biz/metropolitan-property-group-new-york?q=alon
22 Upon information and belief, Defendant Katri is a managing member in multiple corporations with Defendant MPG’s Fifth Avenue Office listed as the business addresses, including 627 Blake LLC and 757 Whitehall LLC. Defendant Katri used these corporations to purchase properties in Brooklyn and the Bronx.
24
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68. Moreover, Defendant Katri and his wife, Defendant Vitenshtein, appear on
ConEd records for 200 East 116th Street, one of the Subject Buildings with seven apartments that
were fully converted to illegal short-term rentals, despite repeated enforcement actions by the
City.23
69. Upon information and belief, Defendant Katri has garnered numerous negative
reviews from prospective permanent tenants, who record abusive behavior, bait-and-switch
schemes, hidden fees and unreturned deposits.24
70. Defendant SHELY KATRI a/k/a SHELY VITENSHTEIN, a natural person, upon
information and belief, is and at all times relevant has been, actively engaged in the illegal
advertising and operation of transient rentals of permanent residential multiple dwelling units in
the City and State of New York, including the ones in the Subject Buildings.
71. Upon information and belief, Defendant Vitenshtein is a licensed real estate
broker and currently works as the vice president of sales for Defendant MPG.25 She has also
been married to Defendant Katri since 2008.
72. Records show that the illegal advertisements for short-term rentals on Airbnb
associated with Defendant Vitenshtein generated approximately $185,000 in revenue between
2015 and 2018 from the Subject Buildings, and approximately $90,000 revenue from other
permanent residential buildings in Manhattan during the same timeframe.
73. Defendant Vitenshtein is directly involved in Operator Defendants’ illegal short-
term rental operation, and she also appears on the ConEd records for the Subject Buildings at
23 https://streeteasy.com/profile/830643-sami-katri.
24 https://www.yelp.ie/biz/metropolitan-property-group-new-york?sort_by=date_desc,. Reviews for Defendant Katri specifically are here: https://www.yelp.ie/biz/metropolitan-property-group-new- york?q=sami.
25 https://www.linkedin.com/in/shely-katri-1437064a.
25
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200 East 116th Street, which was fully converted to illegal short-term rentals, despite repeated
enforcement actions by the City.
74. Defendant ALSI PROPERTIES LLC, a New York domestic limited liability
company, is and at all times relevant has been, receiving payments through Airbnb for Operator
Defendants’ illegal transient activity, including for some occurring at one of the Subject
Buildings, 2118 3rd Avenue, and earned approximately $424,000 in illegal short-term rental
revenue between 2015 and 2018.
75. The New York State Department of State Division of Corporations lists
Defendant Itah with the process service address for Defendant Alsi.26 Airbnb disbursed illegal
short-term rental revenue to Defendant MPG Brokers’ Madison Avenue Office for Defendant
Alsi’s payouts. Defendant Alsi is also the titled owner of one of Defendant Karasenty’s
properties located at 219 Malcolm X Boulevard, Brooklyn, NY.
76. Defendant AMS GROUP NYC, CORP. a/k/a AMS GROUP a/k/a ANS GROUP,
a New York domestic limited liability company, is and at all times relevant has been, receiving
payments through Airbnb for Operator Defendants’ illegal transient activity, including for some
of the illegal stays at 123 East 54th Street, one of the Subject Buildings, and received over $2
million in illegal short-term rental revenue between 2015 and 2018.
77. The New York State Department of State Division of Corporations lists the
process service address for Defendant AMS as Defendant MPG’s Fifth Avenue Office. Airbnb
disbursed illegal short-term rental revenue to Defendant MPG’s Fifth Avenue Office and
Defendant MPG Brokers’ Madison Avenue Office.
26 The process service address for Alsi is listed on the Department of State’s website as “SHIMON ITAH, 312 EAST 30TH STREET, PH1, NEW YORK, NEW YORK, 10016.”
26
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78. Defendant BKI GROUP LLC, a New York domestic limited liability company, is
and at all times relevant has been, receiving payments through Airbnb for Operator Defendants’
illegal transient activity, and received approximately $1.5 million in illegal short-term rental
revenue between 2015 and 2018.
79. The New York State Department of State Division of Corporations lists the
process service address for Defendant BKI as Defendant MPG Brokers’ Madison Avenue Office,
the same address Airbnb used to disburse illegal short-term rental payouts to Defendant BKI.
80. Defendant CLEAN STAY SERVICES INC a/k/a STAY CLEAN SERVICES, a
New York domestic business corporation, is and at all times relevant has been, receiving
payments through Airbnb for Operator Defendants’ the illegal transient activity, and has
generated more than $336,000 in illegal short-term rental revenue between 2015 and 2018.
81. The New York State Department of State Division of Corporations lists the
process service address for Clean Stay Services as “401 EAST 81TH STREET, APT 16D, NEW
YORK, NEW YORK, 10028,” the same address as that listed for Defendant MIB to receive
service via Defendant Beckman. Upon information and belief, this location is also Defendant
Beckman’s home address.
82. Defendant DSG GROUP LLC, a New York domestic limited liability company, is
and at all times relevant has been, receiving payments through Airbnb for Operator Defendants’
illegal transient activity, including some that occurred at Subject Building, 123 East 54th Street,
and received almost generated over $1.3 million in illegal short-term rental revenue between
2015 and 2018.
83. The New York State Department of State Division of Corporations lists the
process service address for Defendant DSG at Defendant MPG Brokers’ Madison Avenue
27
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Office, under Defendant Itah’s name. Airbnb disbursed illegal short-term rental revenue to
Defendant MPG’s Fifth Avenue Office and Defendant MPG Brokers’ Madison Avenue Office
for Defendant DSG Group LLC’s payouts. Defendant DSG also made rental payments for an
apartment at 385 Greenwich Street that was offered and operated for illegal short-term rental
through Airbnb by Operator Defendants.
84. Defendant ERESOE HOUSING LLC a/k/a ERESOE HOLDING, a New York
domestic limited liability company, is, and at all times relevant has been, receiving payments
through Airbnb for Operator the Defendants’ illegal transient activity, including for some that
occurred at Subject Building, 200 East 116th Street., and has received over $1.2 million in illegal
short-term rental revenue between 2015 and 2018.
85. The New York State Department of State Division of Corporations lists the
process service address for Defendant Eresoe at Defendant MPG’s Fifth Avenue Office, under
Defendant Itah’s name. The payout addresses used by Airbnb to disburse illegal short-term
rental revenue for Defendant Eresoe were Defendant MPG’s Fifth Avenue Office and Defendant
MPG Brokers’ Madison Avenue Office.
86. Defendant HELLO SERVICES INC, a New York domestic business corporation,
is and at all times relevant has been, receiving payments through Airbnb for Operator
Defendants’ illegal transient activity, and received nearly $285,000 of illegal short-term rental
revenue between 2015 and 2018.
87. The New York State Department of State Division of Corporations lists the
process service address for Defendant Hello Services as “401 EAST 81TH STREET, APT 16D,
NEW YORK, NEW YORK, 10028,” the same address at which Defendant Beckman is listed to
receive service for Defendant MIB.
28
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88. Defendant IGA SERVICES INC. a/k/a IGA SERVICES, a New York domestic
business corporation, is and at all times relevant has been, receiving payments through Airbnb
for Operator Defendants’ illegal transient activity, including for a portion of the activity
occurring at 230 East 30th Street, and received more than $223,000 in illegal short-term rental
revenue between 2015 and 2018.
89. The New York State Department of State Division of Corporations lists the
process service address for Defendant IGA as “401 EAST 81TH STREET, APT 16D, NEW
YORK, NEW YORK, 10028,” the same address where Defendant MIB listed Defendant
Beckman to receive service.
90. Defendant IKB GROUP, INC., a New York domestic business corporation, is and
at all times relevant has been, receiving payments through Airbnb for Operator Defendants’
illegal transient activity, including for a portion of the activity that occurred at three of the
Subject Buildings, 123 East 54th Street, 207-215 East 27th Street, and 230 East 30th Street.
Defendant IKB received over $2.3 million in illegal short-term rental revenue between 2015 and
2018.
91. The New York State Department of State Division of Corporations lists the
process service address for Defendant IKB as Defendant MPG’s Fifth Avenue Office. The
addresses Airbnb utilized to disburse Defendant IKB’s illegal short-term rental revenue are
Defendant MPG’s Fifth Avenue Office, and Defendant MPG Brokers’ Madison Avenue Office.
92. Defendant KBI GROUP LLC, a New York domestic limited liability company, is
and at all times relevant has been, receiving payments through Airbnb for Operator Defendants’
illegal transient activity, including for a portion of the activity at two of the Subject Buildings,
29
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123 East 54th Street and 207-215 East 27th Street, and received nearly $1.7 million in illegal
short-term rental revenue between 2015 and 2018.
93. The New York State Department of State Division of Corporations lists the
process service address for Defendant KBI as Defendant MPG Brokers’ Madison Avenue Office,
the same address Airbnb used to disburse Defendant KBI’s illegal short-term rental revenue.
94. Defendant KIB GROUP LLC, a New York domestic limited liability company, is
and at all times relevant has been, receiving payments through Airbnb for Operator Defendants’
illegal transient activity, including for a portion of the activity at two of the Subject Buildings,
207-215 East 27th Street and 230 East 30th Street, and received over $1.5 million in illegal short-
term rental revenue between 2015 and 2018.
95. The New York State Department of State Division of Corporations lists the
process service address for Defendant KIB as Defendant MPG Brokers’ Madison Avenue Office,
the same address Airbnb used to disburse illegal short-term rental revenue to Defendant KIB.
96. Defendant MASS GROUP, INC. a/k/a MASS GROUP, a New York domestic
business corporation, is and at all times relevant has been, receiving payments through Airbnb
for Operator Defendants’ illegal transient activity, including the ones occurred at two of the
Subject Buildings, 123 East 54th Street, and 207-215 East 27th Street, and received almost $2.3
million in illegal short-term rental revenue between 2015 and 2018.
97. The New York State Department of State Division of Corporations lists the
process service address for Defendant Mass as Defendant MPG’s Fifth Avenue Office. The
addresses Airbnb used to disburse illegal short-term rental revenue for Defendant Mass were
Defendant MPG’s Fifth Avenue Office and Defendant MPG Brokers’ Madison Avenue Office.
30
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98. Defendant MIB SERVICE INC a/k/a MIB SERVICES INC a/k/a MIB
SERVICES, a New York domestic business corporation, is and at all times relevant has been,
receiving payments through Airbnb for Operator Defendants’ illegal transient activity, and
received almost $363,000 in illegal short-term rental revenue between 2015 and 2018.
99. The New York State Department of State Division of Corporations lists the
process service address for Defendant MIB in care of Defendant Beckman, at “401 EAST 81TH
STREET, APT 16D, NEW YORK, NEW YORK, 10028.”
100. Defendant MIDTOWN WEST APTS, INC a/k/a MIDTOWN WEST APTS, a
New York domestic business corporation, is and at all times relevant has been, receiving
payments through Airbnb for Operator Defendants’ illegal transient activity, including a portion
of the activity occurring at Subject Building, 123 East 54th Street. Defendant Midtown West
received nearly $965,000 in illegal short-term rental revenue between 2015 and 2018.
101. The New York State Department of State Division of Corporations lists the
process service address for Defendant Midtown West as Defendant MPG Brokers’ Madison
Avenue Office.
102. Defendant MIDTOWN APTS, INC a/k/a MIDTOWN APTS a/k/a MIDTOWN
APT a/k/a MIDOWN APTS a/k/a MIDROWN APTS, a New York domestic business
corporation, is and at all times relevant has been, receiving payments through Airbnb for
Operator Defendants’ illegal transient activity, including a portion of what occurred at three of
the Subject Buildings, 123 East 54th Street, 207-215 East 27th Street, and 230 East 30th Street.
Defendant Midtown Apts received over $859,000 in illegal short-term rental revenue between
2015 and 2018.
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103. The New York State Department of State Division of Corporations lists the
process service address for Defendant Midtown as Defendant MPG Brokers’ Madison Avenue
Office.
104. Defendant SIMA HARLEM GROUP LLC a/k/a SIMA HARLEM GROUP, a
New York domestic limited liability company, is and at all times relevant has been, receiving
payments through Airbnb for Operator Defendants’ illegal transient activity, including for a
portion of what occurred at Subject Building, 200 East 116th Street. Defendant Sima received
over $771,000 in illegal short-term rental revenue between 2015 and 2018.
105. The New York State Department of State Division of Corporations lists the
process service address for Defendant Sima in care of Defendant Itah, at Defendant MPG
Brokers’ Madison Avenue Office.
106. Defendant SPARGO GROUP, INC. a/k/a SPARGO GROUP a/k/a SPARGO INC
a/k/a NYC SPARGO, a New York domestic business corporation, is and at all times relevant has
been, receiving payments through Airbnb for Operator Defendants’ illegal transient activity,
including for a portion of the activity at Subject Building, 123 East 54th Street. Defendant
Spargo received over $547,000 in illegal short-term rental revenue between 2015 and 2018.
107. Defendant Beckman’s phone number appears on the Facebook account for
Defendant Spargo, which provides Defendant MPG’s Fifth Avenue Office as its business
address.27 The New York State Department of State Division of Corporations lists the process
service address for Defendant Spargo as Defendant MPG’s Fifth Avenue Office. Defendant
Spargo also made rental payments for an apartment offered and used for illegal short-term rentals
by Defendants Beckman, Itah, and Karasenty at 385 Greenwich Street.
27 https://www.facebook.com/pages/Spargo-Group/225318407972620.
32
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108. Defendant SSAM GROUP, INC a/k/a SSAM GROUP a/k/a SSAM, a New York
domestic business corporation, is and at all times relevant has been, receiving payments through
Airbnb for Operator Defendants’ illegal transient activity, including a portion of what occurred at
123 East 54th Street, 207-215 East 27th Street, and 2118 3rd Avenue, three of the Subject
Buildings. Defendant SSAM received almost $2.1 million in illegal short-term rental revenue
between 2015 and 2018. The New York State Department of State Division of Corporations lists
the process service address for Defendant SSAM as Defendant MPG’s Fifth Avenue Office.
109. Defendant LINMAR, L.P., a New York domestic limited partnership, according
to the last recorded deed, is and at all times relevant has been, the owner of record of 123 East
54th Street. A mortgage document from 2010 for 123 East 54th Street lists Defendant Linmar’s
address as c/o Abington Holding, 950 Third Avenue, 2nd Floor, New York, New York 10022.
110. Defendant LINMAR GROUP, LLC, a New York domestic limited liability
company, is listed on the Housing Preservation and Development (“HPD”) Property Owner
Registration Information webpage as the owner of 123 East 54th Street. Defendant Linmar
Group’s address on the Property Owner Registration Information HPD Building Registration
Summary Report is listed as 950 Third Avenue, New York, New York 10022, and the New York
State Department of State Division of Corporations lists the process service address for
Defendant Linmar Group as “C/O ABINGTON HOLDING, 950 THIRD AVENUE, 27TH
FLOOR, NEW YORK, NEW YORK 10022.” Defendant Linmar Group is also listed as a
borrower of a 2015 mortgage for 123 East 54th Street.
111. Defendant THE LAND AND BUILDING KNOWN AS 123 EAST 54TH
STREET, BLOCK 1309, LOT 8, County, City and State of New York, is one of the real
properties where the activities complained of have taken place and continue to take place.
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112. Defendant 200 GROUP, LLC, a New York domestic limited company, is and at
all times relevant has been, the owner of record of 200 East 116th Street. The New York State
Department of State Division of Corporations lists the process service address for Defendant
200 Group as “200 GROUP, LLC, 336 EAST 59TH ST., NEW YORK, NEW YORK, 10022.”
113. Defendant, Helm Management, Inc., a New York domestic business corporation,
is and at all times relevant has been, the managing agent of record of 200 East 116th Street. The
New York State Department of State Division of Corporations lists the process service address
for Defendant Helm Management as “336 E. 59TH ST., NEW YORK, NEW YORK, 10022.”
114. Defendant THE LAND AND BUILDING KNOWN AS 200 EAST 116TH
STREET, BLOCK 1665, LOT 48, County, City and State of New York, is one of the real
properties where the activities complained of have taken place and continue to take place.
115. Defendant CARALEX HOLDINGS, LLC, a State of Delaware foreign limited
liability company, is and at all times relevant has been, the owner of record of 207-215 East 27th
Street. The New York State Department of State Division of Corporations lists the process
service address for Defendant Caralex Holdings as “C/O ABINGTON HOLDING 950 THIRD
AVE 27TH FL, NEW YORK, NEW YORK, 10022-2705.”
116. Defendant THE LAND AND BUILDING KNOWN AS 207-215 EAST 27TH
STREET, BLOCK 908, LOT 9, County, City and State of New York, is one of the real
properties where the activities complained of have taken place and continue to take place.
117. Defendant 230 EAST 30TH LLC, a State of Delaware foreign limited liability
company, is and at all times relevant has been, the owner of record of 230 East 30th Street. The
New York State Department of State Division of Corporations lists the process service address
34
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for Defendant 230 East 30th LLC as “C/O ABINGTON HOLDING, 950 THIRD AVENUE,
NEW YORK, NEW YORK, 10022.”
118. Defendant THE LAND AND BUILDING KNOWN AS 230 EAST 30TH
STREET, BLOCK 910, LOT 46, County, City and State of New York, is one of the real
properties where the activities complained of have taken place and continue to take place.
119. Defendant 2118 GROUP, LLC, a New York domestic limited company, is and at
all times relevant has been, the owner of record of 2118 3rd Avenue. The New York State
Department of State Division of Corporations lists the process service address for Defendant
2118 Group as “336 E 59TH STREET, NEW YORK, NEW YORK, 10022.”
120. Defendant THE LAND AND BUILDING KNOWN AS 2118 3RD AVENUE,
BLOCK 1643, LOT 39, County, City and State of New York, is one of the real properties where
the activities complained of have taken place and continue to take place.
121. Defendants “JOHN DOE” and “JANE DOE,” numbers 1 through 10, are
fictitiously named parties, true names unknown, the parties intended being the owners, managers,
or operators of the illegal short-term rental business being carried on by Defendants at the
Subject Buildings or other permanent residential dwellings in the City, and any person claiming
any right, title or interest in the real properties which are the subject of this action.
STATEMENT OF FACTS
I. The Subject Buildings Where Defendants Illegally Advertise and Operate Hazardous Transient Accommodations, and the Violating Conditions Repeatedly Found during OSE’s Inspections
122. Prior to filing this action, DOB Building Inspectors and FDNY Fire Protection
Inspectors assigned to OSE (“OSE Inspection Team”) performed a total of 17 administrative
code inspections at the Subject Buildings to determine whether each building was being operated
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in compliance with applicable law and, if it was not, whether the unlawful use, occupancy and
arrangement of the building posed a danger to the health, welfare and safety of the occupants or
of the public generally.
123. In light of the illegal short-term rentals repeatedly found in the Subject Buildings
since 2014, OSE Inspection Team issued Owner Defendants a total of 58 NOVs/Summonses,
seven FDNY violation orders, four FDNY criminal summonses, and one DOB vacate order due
to imminently hazardous conditions. Similarly, OSE Inspection Team issued Operator
Defendants 17 OSE advertising summonses.
A. ILLEGAL TRANSIENT USE FOUND AT 123 EAST 54TH STREET
124. The legal occupancy of a building is determined based on records maintained by
DOB. For buildings constructed after 1938, the applicable record is called the Certificate of
Occupancy (“C/O”). Once a C/O is issued for a given building, it becomes the governing
document for the use and occupancy of that building. New York City Charter § 645(e).28
125. The applicable DOB record, C/O No. 78928, governs the legal use and occupancy
of 123 East 54th Street. According to C/O No. 78928, 123 East 54th Street is a 9-story, Class “A”
Multiple Dwelling, with a permissible use and occupancy of 64 total Class “A” apartments.29
126. Since 2013, the City has received more than five complaints concerning illegal
short-term rentals in various apartments in 123 East 54th Street, including a complaint that
28 New York City Charter § 645(e) provides that “every certificate of occupancy shall, unless and until set aside, vacated or modified by the board of standards and appeals or a court of competent jurisdiction, be and remain binding and conclusive upon all agencies and officers of the city … and no order, direction or requirement affecting or at variance with any matter set forth in any certificate of occupancy shall be made or issued by any agency or officer of the city … unless and until the certificate is set aside, vacated or modified by the board of standards and appeals or a court of competent jurisdiction upon application of the agency, department, commission, officer or member thereof seeking to make or issue such order, direction or requirement.”
29 C/O No. 78928 also permits legal occupancy of the cellar for “boiler room, refuse room, tenants’ laundry, [and] storage for store.” In addition, C/O No. 78928 permits legal occupancy of the 1st floor for “eating & drinking establishment, lobby, [and] store.”
36
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“guest[s] usually stay the weekend … large suitcases, usually don’t speak English and never see
them again.” In July 2018, the City even received a complaint from an Airbnb guest who was
dissatisfied about their transient stay at 123 East 54th Street, Apartment 9C, claiming a “terrible
experience renting a possible illegal AirB&B place.”
127. Illegal short-term rental operations have been observed by OSE Inspection Team
at 123 East 54th Street on three separate occasions in three separate apartments since April 2017,
including an inspection on April 3, 2017, where Apartment 5B was found to be an “imminent
danger to life or public safety or safety of the occupants or to property,” and DOB issued a
partial vacate order.
i. April 3, 2017 OSE Inspection and Illegal Transient Use Found in 123 East 54th Street, Apartment 5B
128. DOB Inspector Filatov performed an Administrative Code inspection of 123 East
54th Street on April 3, 2017, to determine compliance at that location with the Building Code and
Zoning Resolution, as well as any other statutes or regulatory provisions enforceable by DOB.
129. Upon arriving at the building, DOB Inspector Filatov and OSE Inspection Team
interviewed three guests: (a) Mr. Han, who paid $30/night for his transient stay from April 1, 2017
to April 3, 2017; (b) Mr. Lee, who paid $30/night for his stay from March 31, 2017 to April 31,
2017; and (c) Ms. Chue, who paid for her transient stay from March 24, 2017 to April 17, 2017.
The guests told DOB Inspector Filatov that there were no permanent residents present during their
stays at the location.
130. Based on DOB Inspector Filatov’s observations and interviews of the guests in
Apartment 5B of 123 East 54th Street on April 3, 2017, he issued the following five Summonses
to the building owner, Defendant Linmar, explaining each violation and directing the remedy to
address the violation, which in each case was to “Restore to Prior Legal Condition,”
37
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“Discontinue Illegal Occupancy,” “Obtain Permit,” or “Comply with Code.” A description of each
violation is set forth below:
Summons # Date: Violation Noted:
35220694X 4/3/2017 Permanent dwelling used/converted for other than permanent residential purposes. 35220695H 4/3/2017 Failure to provide fire alarm system for transient use.
35220696J 4/3/2017 Failure to comply with automatic fire sprinkler requirements for transient use. 35220697L 4/3/2017 Work without permit to erect full height partitions to create 4 sleep rooms. 35220698N 4/3/2017 Failure to comply with maximum floor area requirements per occupant load.
131. Due to the imminent danger to life or public safety or safety of the guests or to
property resulting from the particular violations that DOB Inspector Filatov observed during his
April 3, 2017 inspection of 123 East 54th Street, the DOB Commissioner issued Peremptory Partial
Vacate Order #M40/2017. This Order required that Apartment 5B of 123 East 54th Street be
immediately vacated and remain vacant and unoccupied until such time as the conditions giving rise
to this vacate order had been corrected and the vacate order was rescinded. The Order also
expressly noted that “The Commissioner of the Department of Buildings has determined that
condition(s) to or within these premises are imminently perilous to life, public safety or the safety of
the occupants or danger to property” due to the following conditions: “Apt # 5B illegally converted
into 4 furnished/transient use units without providing fire alarm, sprinkler system, and exceeding
occupancy load (1 room – 4 bunk beds, 2 room – 2 bunk beds).”
132. Defendant Linmar was found “in violation” of the April 3, 2017 Summonses by
OATH in a decision, dated July 10, 2017, which imposed $6,000 in civil penalties.
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133. In May 2017, Defendant Linmar filed Certificates of Correction with DOB for the
April 3, 2017 Summonses, and it swore that “throughout entire building and premises has been
restored to prior legal conditions, thereby correcting the violating condition.”
ii. May 16, 2018 OSE Inspection and Illegal Transient Use Found in 123 East 54th Street, Apartment PH
134. Former-DOB Inspector Sukhraj performed an Administrative Code inspection of
123 East 54th Street on May 16, 2018, to determine compliance at that location with the Building
Code and Zoning Resolution, as well as any other statutes or regulatory provisions enforceable
by DOB.
135. Upon arriving at the building, former-DOB Inspector Sukhraj and OSE Inspection
Team interviewed a guest from India, named Mr. Shah. Mr. Shah stated that he and his seven
family members booked their stay at 123 East 54th Street, Apartment PH (3 bedrooms) from May
12, 2018 to May 18, 2018 through Airbnb, and paid $3,000 for their transient stay. Mr. Shah also
stated that the Airbnb host was named “Aloone” with the following phone number: (917) 523-4755.
Furthermore, Mr. Shah stated that upon checking in, he was put in contact with a female, who met
him in the lobby of 123 East 54th Street, and handed him the key to the apartment. Lastly, Mr. Shah
told former-DOB Inspector Sukhraj that there were no permanent residents present during their stay
at that location.
136. Based upon former-DOB Inspector Sukhraj’s observations and interview of the
guest in Apartment PH of 123 East 54th Street on May 16, 2018, he issued the following three
Summonses to the building owner Defendant Linmar, explaining each violation and directing the
remedy to address the violation, which in each case was to “Restore to Prior Legal Condition,” or
“Discontinue Illegal Occupancy.” A description of each violation is set forth below:
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Summons # Date: Violation Noted: 35329735M 5/16/2018 Permanent dwelling used/converted for other than permanent residential purposes. 35329736Y 5/16/2018 Failure to comply with automatic fire sprinkler requirements for transient use. 35329737X 5/16/2018 Failure to provide fire alarm system for transient use.
137. The OSE Inspection Team also issued one FDNY Violation Order as it was
determined that the building did not have the fire alarm system, automatic sprinkler system,
adequate emergency lighting, or adequate fire extinguishers required for transient use occupancy.
138. Defendant Linmar was found “in violation” of the May 16, 2018 Summonses by
OATH in a decision, dated October 31, 2018, which imposed $3,750 in civil penalties.
139. In June 2018, Defendant Linmar filed Certificates of Correction for the violations
issued on May 16, 2018, and swore that “illegal transient use and occupancy has been
discontinued in Apt. PH (Penthouse) unit and throughout entire building.” As part of the
Certificate of Correction, Defendant Linmar included an annual lease agreement with “Shely
Vitenshtein” – Defendant Vitenshtein – dated April 21, 2016, with monthly rent at $6,500. The
lease was thereafter renewed on March 20, 2017 for 2 years, with monthly rent at $6,650.
140. Aside from the lease, no other evidence was submitted by Defendant Linmar to
demonstrate that the illegal transient occupancy observed on May 6, 2018 had ceased at 123 East
54th Street. Furthermore, the lease document disturbingly shows that Defendant Vitenshtein was
permitted to conduct illegal short-term rental in Apartment PH.
iii. August 1, 2018 OSE Inspection and Illegal Transient Use Found in 123 East 54th Street, Apartment 3B
141. DOB Inspector Cautela performed another Administrative Code inspection of
123 East 54th Street on August 1, 2018.
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142. Upon arriving at the building, DOB Inspector Cautela and OSE Inspection Team
interviewed three guests from London. The London guests stated that they booked their stay at 123
East 54th Street, Apartment 3B from July 31, 2018 to August 3, 2018 through Airbnb, and paid $850
pounds for their transient stay.30 The London guests also stated that the Airbnb host was named
“Eric” with the following phone numbers: (917) 523-4755 and (646) 559-5695. Lastly, the London
guests told DOB Inspector Cautela that there were no permanent residents present during their stay
at that location.
143. Based upon DOB Inspector Cautela’s observations and interview of the guests in
Apartment 3B of 123 East 54th Street on August 1, 2018, he issued the following three
Summonses to Defendant Linmar, explaining each violation and directing the remedy to address
the violation, which in each case was to “Discontinue Illegal Use.” A description of each
violation is set forth below:
Summons # Date: Violation Noted: 35330473J 8/1/2018 Permanent dwelling used/converted for other than permanent residential purposes. 35330474L 8/1/2018 Failure to comply with automatic fire sprinkler requirements for transient use. 35330525M 8/1/2018 Failure to provide fire alarm system for transient use.
144. The OSE Inspection Team also issued one FDNY Violation Order and one FDNY
Criminal Court Summons as it was determined that the building did not have a fire alarm system,
automatic sprinkler system, emergency lighting, and no fire extinguishers throughout required
for transient use occupancy.
145. DOB Inspector Cautela also issued one advertising summons to Defendant Beckman
for his August 1, 2018 illegal advertisement of 123 East 54th Street for transient stays on Airbnb.
30 Approximately $1,074.72.
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146. On September 20, 2018 OATH found Defendant Linmar “in violation” of illegal
transient use in Apartment 3B and, given the history of illegal use at 123 East 54th Street, OATH
imposed $27,250.00 in aggravated civil penalties.31
iv. Records of Additional Illegal Short-Term Rental Reservations and Stays at 123 East 54th Street on Dates Other than When OSE Inspection Team Inspected
147. Records produced by Airbnb reveal that there were illegal short-term stays in the
building as recently as October 2018. Reservation number HMPDP3F5TE occurred between
October 2, 2018 to October 4, 2018 (for 2 nights), and reservation number HMRYF98AZ5
occurred between October 7, 2018 to October 13, 2018 (for 6 nights).
148. To date, 123 East 54th Street continues to be deceptively advertised and booked,
and hazardously and unlawfully used and occupied for short-term transient occupancy purposes,
in violation of the MDL, the Building Code, and the Fire Code.
149. Nowhere in any of the aforesaid advertisements do Operator Defendants inform
consumers that the transient accommodations are illegal and do not meet fire safety standards.
B. ILLEGAL TRANSIENT USE FOUND AT 200 EAST 116TH STREET
150. The applicable DOB record setting forth the legal use and occupancy of 200 East
116th Street as permanent only (stays of 30 days or more) is C/O No. 102946984. According to
C/O No. 102946984, 200 East 116th Street is a 4-story, Class “A” Multiple Dwelling, with a
permissible use and occupancy of seven total Class “A” apartments from 2nd to 4th floors.32
31 Summons No.: 35330474L was dismissed as the OATH Hearing Officer found that an automatic sprinkler system was present in the building.
32 C/O No. 102946984 also permits legal occupancy of the cellar for “storage,” and the first floor for “restaurant and stores.”
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151. Illegal short-term rental operations have been observed by OSE Inspection Team
at 200 East 116th Street on two separate occasions in seven separate apartments since March
2018.
i. March 13, 2018 OSE Inspection and Illegal Transient Use Found in 200 East 116th Street, Apartments 2N, 2S, 3N, 3S, and 4N
152. On March 13, 2018, DOB Inspector Marco Botticelli performed an Administrative
Code inspection of 200 East 116th Street, to determine compliance at that location with the
Building Code and Zoning Resolution, as well as any other statutes or regulatory provisions
enforceable by the DOB.
153. Upon arriving at the building, DOB Inspector Botticelli and OSE Inspection Team
interviewed a short-term guest from Florida named Nathaniel in Apartment 2N, who stated that he
arranged for his short-term stay on Airbnb from March 9, 2018 to March 17, 2018, for $1,398.00,
and that there were a total of eight people in his party staying in the 4-bedroom apartment. The
Florida guest further stated that the name of the Airbnb host was “Alon,” and that there were no
permanent residents present during their stay.
154. Upon further investigation, DOB Inspector Botticelli found the Airbnb listing
advertising illegal short-term rental at 200 East 116th Street, Apartment 2N. The photographs in the
illegal short-term rental Airbnb advertisement match the interior of Apartment 2N DOB Inspector
Botticelli observed on March 13, 2018.
155. During the same inspection on March 13, 2018, DOB Inspector Botticelli and
OSE Inspection Team also interviewed another short-term guest from Brazil named Luciana in
Apartment 2S, who stated that she arranged for her transient stay on Airbnb from March 1, 2018 to
March 14, 2018, for $3,000.00, and that there were a total of nine people in her party staying in the
4-bedroom apartment. The Brazilian guest further advised that the name of the Airbnb host was
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“Shely Vitenshtein” – Defendant Vitenshtein – with the phone number of (646) 370-3871. The
Brazilian guest stated that there were no permanent residents present during the guests’ stay.
156. Upon further investigation, DOB Inspector Botticelli found the Airbnb listing
advertising illegal short-term rental at 200 East 116th Street, Apartment 2S. The photographs in the
illegal short-term rental Airbnb advertisement match the interior of Apartment 2S DOB Inspector
Botticelli observed on March 13, 2018.
157. During the same inspection on March 13, 2018, DOB Inspector Botticelli and OSE
Inspection Team also interviewed another short-term guest from Germany named Ragna in
Apartment 3N, who stated that she arranged her short-term stay from March 10, 2018 to March 17,
2018 on Airbnb for 1,625.00 Euros.33 The German guest further stated that there were a total of
eight people in her party in the 4-bedroom apartment, that “David” was the Airbnb host, and that
there were no permanent residents present during their stay in Apartment 3N.
158. Upon further investigation, DOB Inspector Botticelli found the Airbnb listing
advertising illegal short-term rental at 200 East 116th Street, Apartment 3N. The photographs in the
illegal short-term rental Airbnb advertisement match the interior of Apartment 3N DOB Inspector
Botticelli observed on March 13, 2018.
159. During the same inspection on March 13, 2018, DOB Inspector Botticelli and
OSE Inspection Team also interviewed a short-term guest from Germany named Thomas in
Apartment 3S, who stated that he arranged for his short-term stay on Airbnb from March 12, 2018
to March 18, 2018, for approximately 1,414.91 Euros.34 The guest Thomas also stated that there
were a total of seven people in his party staying in the 4-bedroom apartment, that the Airbnb host
was “Eti,” and that there were no permanent residents present during their stay.
33 Approximately $1,839.03.
34 Approximately $1,607.40.
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160. Upon further investigation, DOB Inspector Botticelli found the Airbnb listing
advertising illegal short-term rental at 200 East 116th Street, Apartment 3S. The photographs in the
illegal short-term rental Airbnb advertisement match the interior of Apartment 3S DOB Inspector
Botticelli observed on March 13, 2018.
161. During the same inspection on March 13, 2018, DOB Inspector Botticelli and
OSE Inspection Team interviewed a short-term guest from Florida named Danielle in Apartment
4N, who stated that she arranged for her transient stay on Airbnb from March 8, 2018 to March 13,
2018 and paid approximately $187.00 per night. The guest Danielle also stated that there were a
total of seven people in her party staying in the 4-bedroom apartment, and that the Airbnb host was
“David,” whose phone number was (646) 370-4640. Lastly the guest Danielle stated that there
were no permanent residents present during their stay in Apartment 4N.
162. Upon further investigation, DOB Inspector Botticelli found the Airbnb listing
advertising illegal short-term rental at 200 East 116th Street, Apartment 4N. The photographs in the
illegal short-term rental Airbnb advertisement match the interior of Apartment 4N DOB Inspector
Botticelli observed on March 13, 2018.
163. During the March 13, 2018 inspection of 200 East 116th Street, OSE Inspection
Team found a total of 39 transient guests staying in five separate apartments, all booked through
Airbnb with five deceptive and illegal advertisements.
164. Based upon DOB Inspector Botticelli’s observations and interviews of the
transient guests in Apartments 2N, 2S, 3N, 3S, and 4N at 200 East 116th Street on March 13,
2018, he issued the following four Summonses to the building owner, Defendant 200 Group
LLC, explaining each violation and directing the remedy to address the violation. A description
of each violation is set forth below:
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Summons # Date: Violation Noted: 35320862Y 3/13/2018 Permanent dwelling used/converted for other than permanent residential purposes. 35320863X 3/13/2018 Failure to comply with automatic fire sprinkler requirements for transient use. 35320864H 3/13/2018 Failure to provide required means of egress for every floor for transient use. 35320865J 3/13/2018 Failure to provide fire alarm system for transient use.
165. DOB Inspector Botticelli also issued the following seven advertising summonses to
Defendants for their March 13, 2018 illegal advertisements of 200 East 116th Street for transient
stays on Airbnb: (1) three advertising summonses to Defendant Itah; (2) two advertising
summonses to Defendant Vitenshtein; (3) one advertising summons to Defendant Karasenty; and
(4) one advertising summons to Defendant Katri.
166. The OSE Inspection Team also issued two Violation Orders and one FDNY
Criminal Court Summons as a series of fire safety violations with respect to the unlawful transient
occupancy of 39 transient use guests at the building at that time.
167. Defendant 200 Group was found “in violation” of the March 13, 2018 Summonses
by OATH in a decision, dated October 16, 2018, which imposed $47,000.00 in civil penalties.
ii. September 13, 2018 OSE Inspection and Illegal Transient Use Found in 200 East 116th Street, Apartments 2E, 3S, and 4S
168. On September 13, 2018, DOB Inspector Pugach and OSE Inspection Team
performed another Administrative Code enforcement inspection of 200 East 116th Street in
furtherance of OSE’s illegal short-term rental investigation.
169. Upon arriving at the building, DOB Inspector Pugach spoke with short-term guests
from Ireland in Apartment 2E, who stated that they paid a total of $300.00 for two nights. The Irish
guests also stated that the host could be reached at (646) 719-3743, and that there were no
permanent residents present during their stay.
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170. During the same inspection on September 13, 2018, DOB Inspector Pugach and
OSE Inspection Team interviewed a short-term guest from Chile named Viviana in Apartment 3S,
who stated there were six people in her party staying for five days, who paid approximately
$700.00. According to the guest Viviana, she booked her short-term stay on Airbnb, and no
permanent residents were present during their stay.
171. During the same inspection on September 13, 2018, DOB Inspector Pugach and
OSE Inspection Team interviewed short-term guests from Belgium in Apartment 4S, who stated
they were visiting for six days, that they made the reservation on Airbnb at a cost of 1,600.00
Euros35, and that there were a total of nine people in the party. According to the Belgium guests,
their Airbnb host was “Cristina,” whose phone number was (646) 719-3743, the same phone
number used by the host of Apartment 2E. Lastly, the Belgium guests stated that there were no
permanent residents present during their stay.
172. During this September 13, 2018 inspection, OSE Inspection Team found a total of
17 transient guests staying in three apartments at 200 East 116th Street.
173. Based on DOB Inspector Pugach’s observations and interviews of the transient
guests in Apartments 2E, 3S, and 4S, he issued the following four Summonses to Defendant
200 Group, explaining each violation and directing the remedy to address the violation. A
description of each violation is set forth below:
Summons # Date: Violation Noted: 35348394R 9/13/2018 Permanent dwelling used/converted for other than permanent residential purposes. 35348395Z 9/13/2018 Failure to comply with automatic fire sprinkler requirements for transient use. 35348396K 9/13/2018 Failure to provide required means of egress for transient use for every floor for transient use. 35348397M 9/13/2018 Failure to provide fire alarm system for transient use.
35 Approximately $1,818.92.
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174. The FDNY also issued one FDNY Violation Order as it was determined that the
building did not have the fire alarm system, automatic sprinkler system, adequate fire
extinguishers, or adequate illuminated emergency light required for transient use occupancy.
175. On or about November 1, 2018, the Managing Agent of 200 East 116th Street – Eran
Noy – filed Certificates of Correction36 addressing some of the Summonses issued to Defendant
200 Group on September 13, 2018. Included with each Certificate of Correction is an affidavit from
the managing agent37 swearing that the violating conditions were corrected and that there was “no
transient use in apartments 4S, 3S and 2E by having leases for more than 30 days implemented for
the premises…[p]lease see lease renewals for apartments 4S, 3S and 2E.” The lease holders for
these apartments were Defendant Itah, Thomas Datny, and Eric Lam.38
176. Aside from the leases, no other evidence was submitted by the Managing Agent
for 200 East 116th Street to demonstrate that the illegal transient occupancy observed on
September 13, 2018 had ceased. Furthermore, the lease document disturbingly shows that
Defendant Itah was permitted to conduct illegal short-term rentals in the building.
C. ILLEGAL TRANSIENT USE FOUND AT 207-215 EAST 27TH STREET
177. The applicable DOB record, C/O No. 101367735, governs the legal use and
occupancy of 207-215 East 27th Street. According to C/O No. 101367735, 207-215 East 27th
36 The Certificates of Correction were filed with regard to Summonses 35348395Z, 96K and 97M.
37 The managing agent for 200 East 116th Street also identified himself as the owner of 2118 Third Ave., and submitted Certificates of Correction to DOB for transient use Summonses issued to 2118 Third Ave. on November 13, 2015.
38 Upon information and belief, Eric Lam is the brother-in-law of Defendant Karasenty.
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Street is a 9-story, Class “A” Multiple Dwelling, with a permissible use and occupancy of
80 total Class “A” apartments.39
178. Since 2014, the City has received a number of complaints concerning illegal
short-term rentals in various apartments in 207-215 East 27th Street, including complaints
regarding apartments being “used as Airbnb, new residents every day or 2,” and “an apartment
being used as a short stay hotel. Mostly on weekends.”
179. Illegal short-term rental operations have been observed at 207-215 East 27th Street
on six separate occasions since October 2014 in five separate apartments.
i. October 9, 2014 OSE Inspection and Illegal Transient Use Found in 207-215 East 27th Street, Unit B
180. On October 9, 2014, DOB Inspector Pugach and OSE Inspection Team performed
an Administrative Code inspection of 207-215 East 27th Street to determine compliance at that
location with the Building Code and Zoning Resolution, as well as any other statutes or
regulatory provisions enforceable by DOB.
181. Upon arriving at the building, DOB Inspector Pugach and OSE Inspection Team
found that Unit B, whose legal occupancy and use is that of a medical office, had been converted to
2 bedrooms and was being used for illegal transient occupancy.
182. DOB Inspector Pugach interviewed two short-term guests who informed him that
they were staying from October 13, 2014 to October 15, 2014, and that no permanent residents were
present during their stay.
183. Based on DOB Inspector Pugach’s observations and interview of the guests in
Unit B of 207-215 East 27th Street on October 9, 2014, he issued the following four Summonses
39 C/O No. 101367735 also permits legal occupancy of the cellar for “boiler room, refuse room, electric gas meter room, laundry room, doctors offices, [and] office.” In addition, C/O No. 101367735 permits legal occupancy of the penthouse with mechanical room as well as six duplex class “A” apartments.
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to Defendant Caralex Holdings, explaining each violation and directing the remedy to address
the violation, which in each case was to “Discontinue Illegal Occupancy.” A description of each
violation is set forth below:
Summons # Date: Violation Noted: 35151127N 10/9/2014 Medical office used/converted to transient use with 2 bedrooms. 35151128P 10/9/2014 Failure to comply with automatic fire sprinkler requirements for transient use. 35151129R 10/9/2014 Failure to provide fire alarm system for transient use.
35151131X 10/9/2014 Illegal hardware install on exit door leading from cellar level to street level.
184. Defendant Caralex Holdings was found “in violation” by OATH in a decision,
dated March 3, 2015, which imposed $4,200 in civil penalties for the October 9, 2014
Summonses.
ii. October 14, 2014 OSE Inspection and Illegal Transient Use Found in 207-215 East 27th Street, Unit C
185. On October 14, 2014, DOB Inspector Pugach and OSE Inspection Team performed
another Administrative Code inspection of 207-215 East 27th Street.
186. Upon arriving at the building, DOB Inspector Pugach and OSE Inspection Team
found that Unit C had been converted to 2 bedrooms and was being used for illegal transient
occupancy. The short-term guests showed DOB Inspector Pugach the “House Rules &
Regulations” for their short-term rental at 207-215 East 27th Street, Unit C.
187. Based on DOB Inspector Pugach’s observations and interview of the guests in
Unit C of 207-215 East 27th Street on October 14, 2014, he issued the following three
Summonses to Defendant Caralex Holdings, explaining each violation and directing the remedy
to address the violation, which in each case was to “Discontinue Illegal Occupancy.”
A description of each violation is set forth below:
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Summons # Date: Violation Noted: 35151132H 10/14/2014 Medical office used/converted to transient use with 2 bedrooms. Prior Violation No. 35151127N. 35151133J 10/14/2014 Failure to comply with automatic fire sprinkler requirements for transient use. Prior Violation No. 35151128P. 35151146Z 10/14/2014 Failure to provide fire alarm system for transient use. Prior Violation No. 351511279R.
188. Defendant Caralex Holdings was found “in violation” by OATH in a decision,
dated March 3, 2015, which imposed $3,200 in civil penalties for the October 14, 2014
Summonses.
iii. November 7, 2017 OSE Inspection and Illegal Transient Use Found in 207-215 East 27th Street, Apartment PHG
189. On November 7, 2017, DOB Inspector Rosato and OSE Inspection Team performed
an Administrative Code inspection of 207-215 East 27th Street, to determine compliance at that
location with the Building Code and Zoning Resolution, as well as any other statutes or
regulatory provisions enforceable by DOB.
190. Upon arriving at the building, DOB Inspector Rosato and OSE Inspection Team
interviewed three transient guests from Italy. The Italian guests stated that they booked their stay at
207-215 East 27th Street, Apartment PHG from November 3, 2017 to November 9, 2017 through
Airbnb, and paid 1,329 Euros for their transient stay.40 The Italian guests also stated that the Airbnb
listing they used to book their short-term rental was called “Penthouse alcove studio! Location!”
Lastly, the Italian guests said that there were no permanent residents present during their stay.
191. Based on DOB Inspector Rosato’s observations and interview of the guests in
Apartment PHG of 207-215 East 27th Street on November 7, 2017, he issued the following three
Summonses to Defendant Caralex Holdings, explaining each violation and directing the remedy
40 Approximately $1,510.24.
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to address the violation, which in each case was to “Discontinue Illegal Occupancy.”
A description of each violation is set forth below:
Summons # Date: Violation Noted: 35293094J 11/7/2017 Permanent dwelling used/converted for other than permanent residential purposes. Prior Violation Nos. 35151127N & 35151132H. 35293096N 11/7/2017 Failure to comply with automatic fire sprinkler requirements for transient use. Prior Violation No. 35151133J. 35293097P 11/7/2017 Failure to provide fire alarm system for transient use. Prior Violation No. 35151146Z.
192. The OSE Inspection Team also issued one FDNY Violation Order as it was
determined that the building did not have the required fire alarm system, automatic sprinkler
system, adequate number of emergency light, or fire extinguishers for transient use.
193. Defendant Caralex Holdings was found “in violation” by OATH in a decision,
dated January 11, 2018, which imposed $7,800 in civil penalties for the November 7, 2017
Summonses.
iv. November 22, 2017 OSE Inspection and Illegal Transient Use Found in 207-215 East 27th Street, Apartment 5K
194. On November 22, 2017, former-DOB Inspector Sukhraj and OSE Inspection Team
performed another Administrative Code inspection of 207-215 East 27th Street.
195. Upon arriving at the building, former-DOB Inspector Sukhraj and OSE Inspection
Team interviewed two guests from Lebanon, who stated that they booked their stay at 207-215 East
27th Street, Apartment 5K from October 28, 2017 to November 25, 2017 through Airbnb, and paid
$4,000 for their transient stay. The Lebanese guests said that there were no permanent residents
present during their stay.
196. Based on former-DOB Inspector Sukhraj’s observations and interview of the
guests in Apartment 5K of 207-215 East 27th Street on November 22, 2017, he issued the
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following six Summonses to Defendant Caralex Holdings, explaining each violation and
directing the remedy to address the violation, which in each case was to “Discontinue Illegal
Occupancy,” or “File A Certificate of Correction.” A description of each violation is set forth
below:
Summons # Date: Violation Noted: 35298956R 11/22/2017 Permanent dwelling used/converted for other than permanent residential purposes. Prior Violation No. 35293094J. 35298957Z 11/22/2017 Failure to comply with automatic fire sprinkler requirements for transient use. 35298958K 11/22/2017 Failure to provide fire alarm system for transient use.
35298959M 11/22/2017 Failure to comply with the Commissioner’s Order to file a certificate of correction with DOB. 35298960J 11/22/2017 Failure to comply with the Commissioner’s Order to file a certificate of correction with DOB. 35298961L 11/22/2017 Failure to comply with the Commissioner’s Order to file a certificate of correction with DOB.
197. The OSE Inspection Team also issued one FDNY Violation Order as it was
determined that the building did not have the automatic sprinkler system, adequate number of
fire extinguishers, or fire alarm system required for transient use
198. Defendant Caralex Holdings was found “in violation” of illegal transient use by
OATH in a decision, dated January 19, 2018, which imposed $10,600 in civil penalties for the
November 22, 2017 Summonses.41
v. May 8, 2018 OSE Inspection and Illegal Transient Use Found in 207-215 East 27th Street, Apartment 2A
199. On May 8, 2018, former-DOB Inspector Sukhraj and OSE Inspection Team
performed another Administrative Code inspection of 207-215 East 27th Street.
41 Summons No.: 35298959M was dismissed as OATH found that a Certificate of Correction was accepted by DOB on November 15, 2017, a date prior to November 22, 2017.
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200. Upon arriving at the building, former-DOB Inspector Sukhraj and OSE Inspection
Team interviewed a male guest in Apartment 2A, and were able to observe the interior layout of the
apartment from the front door. The male guest stated that he booked the stay from May 2, 2018 to
May 30, 2018 through Airbnb, and paid 16,282.89 Canadian dollars for the transient stay.42 The
male guest stated that the Airbnb listing he used to book the short-term rental for the total of five
people was called “Private 4 Bedrooms – Sleep 8 – Terrace – NEW Bath.” Lastly, the male guest
said that there were no permanent residents present during their stay.
201. Based on former-DOB Inspector Sukhraj’s observations and interview of the
guests in Apartment 2A of 207-215 East 27th Street on May 8, 2018, he issued the following
three Summonses to Defendant Caralex Holdings, explaining each violation and directing the
remedy to address the violation, which in each case was to “Discontinue Illegal Occupancy.”
A description of each violation is set forth below:
Summons # Date: Violation Noted: 35329682H 5/8/2018 Permanent dwelling offered for other than permanent residential purposes. Prior Violation Nos. 35293094J, 35298956R. 35329683J 5/8/2018 Failure to comply with automatic fire sprinkler requirements for transient use. Prior Violation Nos. 35293096N, 35298957Z. 35329684L 5/8/2018 Failure to provide fire alarm system for transient use. Prior Violation Nos. 35293097P, 35298958K.
202. The building owner of 207-215 East 27th Street, Defendant Caralex Holding, was
found “in violation” by OATH by decision dated July 3, 2018, with $27,375 in civil penalties
imposed.
203. In May 2018, Caroline Berley, the Managing Agent of Defendant Caralex
Holdings, filed Certificates of Correction for the violations issued on May 8, 2018, and swore
that “illegal transient use and occupancy has been discontinued in Apt #2A and throughout the
42 Approximately $12,096.48.
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buildings.” As part of the Certificates of Correction, Ms. Berley included a lease extension
agreement with “Pola Lam” from May 1, 2017 to April 30, 2019 for Apartment 2A with a
monthly rent of $6,875.43 Apart from the lease, no other evidence was submitted by the
Managing Agent for Defendant Caralex Holdings to demonstrate that the illegal transient
occupancy observed on May 8, 2018 had ceased.
vi. October 19, 2018 OSE Inspection and Illegal Transient Use Found in 207-215 East 27th Street, Unit B
204. On October 19, 2018, DOB Inspector Pugach and OSE Inspection Team performed
another Administrative Code inspection of 207-215 East 27th Street.
205. Upon arriving at the building, DOB Inspector Pugach and OSE Inspection Team
interviewed two female guests from Mexico in Unit B. The Mexican guests stated that their group
of seven people booked the transient stay from October 18, 2018 to October 21, 2018 on Airbnb,
and paid 41,092.85 Mexican pesos.44 The Mexican guests stated that the Airbnb listing they used to
book the short-term rental was called “Midtown 2Bedroom/2Bath – Sleep 8 – Best Location.” The
Mexican guests also stated that the Airbnb host could be reached at (646) 657-0161. Lastly, the
Mexican guests said that there were no permanent residents who were also present during their stay.
206. Based on DOB Inspector Pugach’s observations and interview of the guest in Unit
B of 207-215 East 27th Street on October 19, 2018, he issued the following four Summonses to
Defendant Caralex Holdings, explaining each violation and directing the remedy to address the
violation, which in each case was to “Discontinue Illegal Occupancy.”45 A description of each
violation is set forth below:
43 Upon information and belief, Pola Lam is the mother-in-law of Defendant Karasenty.
44 Approximately $2,051.60.
45 The hearing for these Summonses is on February 7, 2019 at OATH.
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Summons # Date: Violation Noted: 35347824Z 10/19/2018 Permanent dwelling used/converted for other than permanent residential purposes. Prior Violation Nos. 35293956R, 35329682H. 35347876P 10/19/2018 Failure to comply with automatic fire sprinkler requirements for transient use. Prior Violation Nos. 35329683J, 35151133J, 35293096N. 35347877R 10/19/2018 Failure to provide fire alarm system for transient use. Prior Violation Nos. 35151146Z, 35293097P, 35298958K, 35329684L. 35347878Z 10/19/2018 Occupancy contrary to permitted under the C/O No. 101367735, Prior Violation Nos. 35151127N, 35151132H.
207. In November 2018, Alexander Berley, an Officer of Defendant Caralex Holdings,
filed Certificates of Correction for Summonses 35347877R and 35347878Z, violations issued on
October 19, 2018, and swore that “Illegal transient use and occupancy has been discontinued
throughout the entire building . . . .” As part of the Certificates of Correction, Mr. Berley
included a lease extension agreement with “Marlena Beckman” from October 1, 2018 to
September 30, 2019 for Unit B with a monthly rent of $5,875, and the original lease between
Defendant Caralex Holdings and Marlena Beckman for Unit B since September 24, 2014. Apart
from the leases, Defendant Caralex Holdings submitted no other evidence to demonstrate that the
illegal transient occupancy observed on October 19, 2018 had ceased.
D. ILLEGAL TRANSIENT USE FOUND AT 230 EAST 30TH STREET
208. The applicable DOB record setting forth the legal use and occupancy of 230 East
30th Street as permanent only (stays of 30 days or more) is C/O No. 94726. According to C/O
No. 94726, 230 East 30th Street is an 18-story Class “A” Multiple Dwelling, with a permissible
use and occupancy of 126 total Class “A” apartments from the 2nd to 18th floors.46
46 C/O No. 94726 also permits legal occupancy of the cellar for “25 car garage stor. rms. oil tank storage; boiler, electrical, gas & water meter rooms; and laundry & compactor rooms.” In addition, C/O No. 94726 permits legal occupancy of the 1st Floor for “Residential lobby, medical offices” and of the Roof for “Storage room, elev. mach. room.”of the cellar for “storage,” and the first floor for “restaurant and stores.”
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209. OSE Inspection Team has observed illegal short-term rental operations at
230 East 30th Street on three separate occasions in two separate apartments since February 2018.
i. February 26, 2018 OSE Inspection and Illegal Transient Use Found in 230 East 30th Street, Apartment PH2
210. On or about February 10, 2018, the City received a complaint concerning illegal
short-term rentals in 230 East 30th Street, which alleged that “230 E30th Street Apartment PH@,
New York, NY 10282 is being offered by the landlord Abington Properties as an Airbnb.”
211. On February 26, 2018, former-DOB Inspector Sukhraj and OSE Inspection Team
performed an Administrative Code inspection of 230 East 30th Street, to determine compliance at
that location with the Building Code and Zoning Resolution, as well as any other statutes or
regulatory provisions enforceable by DOB.
212. Upon arriving at the building, former-DOB Inspector Sukhraj and OSE Inspection
Team found that the Unit PH2 (“Penthouse 2”), although then unoccupied, was equipped and
arranged as short-term transient rental accommodations. In addition, he noted that his visual
inspection of the apartment revealed that it matched the depiction of the apartment that he had seen
being offered for unlawful transient occupancy through an Airbnb listing (Listing No. 18841687).
Finally, he also observed that that dwelling unit was equipped with prohibited door and/or hardware
in that PH2 Unit was unlawfully using locks at both fire exit doors leading to the stairwell.
213. Based on his observations and his internet research on February 26, 2018, former-
DOB Inspector Sukhraj issued the following two Summonses and Commissioner’s Orders to the
building owner, explaining each violation and directing the remedy to address each violation,
“Discontinue illegal activity” and “Provide legal hardware,” respectively. A description of each
violation is set forth below:
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Summons # Date: Violation Noted: 35320693M 02/26/2018 Perm. Dwelling Offered/Used/Conv to other than Perm. Residential Purpose. 35320694Y 02/26/2018 Failure to maintain building in code-compliant manner: Illegal hardware installed on both fire exit doors on PH2 level leading into stairwells.
214. Defendant 230 E 30th was found “in violation” of the February 26, 2018
Summonses by OATH in a decision, dated October 5, 2018, which imposed $1,050 in civil
penalties.
215. On March 2, 2018, Defendant 230 E 30th filed two Certificates of Correction for
the violations issued on February 26, 2018. In the first Certificate of Correction, filed for
Summons 35320693M, a supporting affidavit by Mark Kalimian, sworn to on February 27, 2018,
alleged that for the subject premises “[T]ransient use is no longer offered or used (discontinued)
for illegal purposes in Apt #PH2 and throughout entire building and premises has been restored
to prior legal conditions, thereby correcting the violating condition.” In support of the Certificate
of Correction, Defendant 230 E 30th provided an annual lease agreement with Defendant
Karasenty, purported tenant for Apartment PH2, which was for a lease term of two years,
beginning on July 1, 2017 and ending on June 30, 2019, with monthly rent at $8,518. Apart
from the lease, no other evidence was submitted by Defendant 230 E 30th to demonstrate that the
illegal transient occupancy observed on February 26, 2018 had ceased.
ii. February 27, 2018 OSE Inspection and Illegal Transient Use Found in 230 East 30th Street, Apartments PH1 and PH2
216. On February 27, 2018, former-DOB Inspector Sukhraj and OSE Inspection Team
performed another Administrative Code inspection of 230 East 30th Street.
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217. Before arriving at the building, former-DOB Inspector Sukhraj and OSE Inspection
Team found two advertisements on Airbnb offering unlawful short-term accommodations in two
penthouse apartments in 230 East 30th Street (Airbnb listings nos. 20862766 and 18841687 – the
second listing being the same ad offering unlawful transient accommodations that was observed on
the previous day).
218. Upon arriving at 230 East 30th Street, former-DOB Inspector Sukhraj and OSE
Inspection Team gained entry into those two penthouse apartments and, based on their observations,
determined that both dwelling units that could only be legally occupied for permanent residential
purposes were being illegally occupied for transient use.
219. Based upon his investigation and his observations during his inspection of 230
East 30th Street on February 27, 2018, former-DOB Inspector Sukhraj issued the following
Summons to the building owner, explaining that violation and directing that the specific remedy
to address the violation was to “Discontinue Illegal Activity.” A description of the violation is set
forth below:
Summons # Date: Violation Noted: 35320695X 02/27/2018 Permanent dwelling offered/used/converted to other than perm. residential purpose. Additional daily penalty for Class 1 Violation of 28-210.3. Previous Violation No. 35320693M.
220. Defendant 230 E 30th was found “in violation” of the February 27, 2018
Summons by OATH in a decision, dated October 1, 2018, which imposed $10,200 in civil
penalties.
221. On March 7, 2018, Defendant 230 E 30th filed a Certificate of Correction for the
violation issued on February 27, 2018. The Affidavit included with that filing was prepared in
the name of Mark Kalimian, and he swore, on February 27, 2018, that “transient use is no longer
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offered or used (discontinued) for illegal purposes throughout entire building and premises has
been restored to prior legal conditions, thereby correcting the violating condition.”
222. As part of the Certificate of Correction, Defendant 230 E 30th, once again,
submitted the annual lease agreement with Defendant Karasenty for Apartment PH2. However,
once again, aside from the lease, no other evidence was submitted by Defendant 230 E 30th to
demonstrate that the illegal transient occupancy observed on February 27, 2018 had ceased.
iii. November 20, 2018 OSE Inspection and Additional Illegal Transient Use Found in 230 East 30th Street, Apartments PH1 and PH2
223. On November 20, 2018, DOB Building Inspector Marco Botticelli and OSE
Inspection Team performed another Administrative Code inspection of 230 East 30th Street.
224. Before arriving at the building, DOB Inspector Botticelli and OSE Inspection
Team found two advertisements on Airbnb offering unlawful short-term transient accommodations
in the two penthouse apartments inside the premises (Airbnb listing numbers 20862766 and
18841687 – the same ads offering unlawful transient accommodations that were observed by
former-DOB Inspector Sukhraj during his February 2018 inspections and investigations).
225. Upon arriving at 230 East 30th Street, DOB Inspector Botticelli and OSE Inspection
Team gained entry into those two penthouse apartments and, based on observations of those
apartments and the ads previously uncovered, determined that both dwelling units that could only be
legally occupied for permanent residential purposes were being illegally offered on Airbnb for
transient use.
226. Based upon his investigation and his observations during his inspection of 230
East 30th Street on November 20, 2018, DOB Inspector Botticelli issued the following Summons
to Defendant 230 E 30th, explaining that violation and directing that the specific remedy to
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address the violation was to “Discontinue Illegal Occupancy.” A description of the violation is set
forth below:
Summons # Date: Violation Noted: 35374226R 11/20/2018 Permanent dwelling offered/used/converted to other than perm. residential purpose. Additional daily penalty for Class 1 Violation of 28-210.3. Previous Violation Nos. 35320695X & 35320693M.
227. DOB Inspector Botticelli also issued two advertising summonses to Defendant
Karasenty for his November 20, 2018 illegal advertisements of 230 East 30th Street for transient
stays on Airbnb.
iv. January 9, 2019 OSE Inspection and Additional Illegal Transient Use Found in 230 East 30th Street, Apartment PH2
228. On January 9, 2019, DOB Building Inspector Dalton Henlon and OSE Inspection
Team performed another Administrative Code inspection of 230 East 30th Street.
229. Before arriving at the building, DOB Inspector Henlon and OSE Inspection Team
found an advertisement on Airbnb offering unlawful short-term transient accommodations in the
penthouse apartment inside the premises (Airbnb listing number 30195742).
230. Upon arriving at 230 East 30th Street, DOB Inspector Henlon and OSE Inspection
Team gained entry into Apartment PH2 and interviewed a short-term guest named John. The guest
stated that his group of eight people from Arkansas and Texas booked the transient stay from
January 8, 2019 to January 12, 2019 on Airbnb, and paid $1693.50. Lastly the guest said that there
were no permanent residents who were also present during their stay.
231. Based upon his investigation and his observations during his inspection of 230
East 30th Street on January 9, 2019, DOB Inspector Henlon issued the following Summonses to
Defendant 230 E 30th, explaining each violation and directing the remedy to address the
violation. A description of each Summons is set forth below:
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Summons # Date: Violation Noted: 35373979R 01/09/2019 Permanent dwelling used/converted for other than permanent residential purposes. Aggravated I condition -- Prior Violation No. 35374226R. 35373981X 10/19/2018 Failure to comply with automatic fire sprinkler requirements for transient use. 35373982H 01/09/2019 Failure to provide fire alarm system for transient use.
35373980Y 01/09/2019 Failure to provide required means of egress for transient use for every floor for transient use.
232. DOB Inspector Henlon also issued one advertising summons to Defendant
Karasenty for his January 9, 2019 illegal advertisements of 230 East 30th Street for transient stays on
Airbnb.
E. ILLEGAL TRANSIENT USE FOUND AT 2118 3RD AVENUE
233. The applicable City record setting forth the legal use and occupancy of 2118 3rd
Ave. as permanent only (stays of 30 days or more) is the HPD I-Card, which can be consulted
where a building does not have a C/O. According to the I-Card, “2118 Third Ave.” is a five-
story, Class “A” Multiple Dwelling, with a cellar, store on the first floor and 4 total Class “A”
apartments on the second through fifth floors.
234. OSE Inspection Team has observed illegal conversion to single room occupancies
(SROs) on one occasion and short-term rental operations at 2118 3rd Avenue on another occasion
in two separate apartments since November 2015.
i. November 13, 2015 OSE Inspection and Illegal Conversion to SROs Found in 2118 3rd Avenue, Apartments 1, 2, 3, and 4
235. On November 13, 2015, together with other members of OSE Inspection Team,
former-DOB Inspector Parczewski performed an Administrative Code inspection of 2118 3rd
Avenue to determine compliance at that location with the Building Code and Zoning Resolution,
as well as any other statutes or regulatory provisions enforceable by the DOB. This inspection
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was triggered by a September 10, 2015 complaint to the City that there were “Illegal hotel rooms
in residential buildings, illegal use: residential space – used as hotel.”
236. Upon arriving at the building, former-DOB Inspector Parczewski and OSE
Inspection Team inspected Apartments 1, 2, 3 and 4 of 2118 3rd Ave. and found that each
Apartment was being illegally used as an SRO (single room occupancy), with each of the four
Apartments respectively equipped and arranged with four bedrooms, with doors numbered on the
outside “1,” “2,” “3,” and “4,” and equipped with key locking devices, and each with a bathroom,
kitchen and common area. They further noted that the occupants of the bedrooms were strangers to
each other, each having a separate agreement with the management company.
237. Former-DOB Inspector Parczewski and OSE Inspection Team interviewed an
occupant name Fabric who stated that he leased his SRO room for six months and that he had three
other roommates. Former-DOB Inspector Parczewski found a total of 16 SRO units at 2118 3rd
Avenue during his November 13, 2015 inspection.
238. Based upon former-DOB Inspector Parczewski’s observations of 2118 3rd Avenue
on November 13, 2015, he issued the following three Summonses to Defendant 2118 GROUP,
LLC, explaining each violation and directing the remedy to address the violation. A description
of each Summons issued by former-DOB Inspector Parczewski on November 13, 2015 is set forth
below:
NOV # Date: Violation Noted: 35138040Y 11/13/2015 Multiple dwelling converted, maintained or occupied with 3 or more additional dwelling units than legally authorized by the Dept. of Buildings. 2nd, 3rd, 4th 5th floor apartments converted into 4 SRO units on each floor (total 16 SRO units and being occupied by unrelated people throughout floors) 35138041X 11/13/2015 Failure to comply with automatic fire sprinkler requirements for illegal conversion. 35138042H 11/13/2015 Work without a permit/illegal work noted at front façade.
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239. Defendant 2118 Group was found “in violation” of the November 13, 2015
Summonses by OATH in a decision, dated November 18, 2016, which imposed $2,400 in civil
penalties.
240. In December of 2015, Defendant 2118 Group filed Certificates of Correction
addressing the Summonses issued on November 13, 2015. Included with each Certificate of
Correction was an affidavit from Defendant 2118 Group stating that the violating conditions were
corrected and that there was, “no illegal occupancy and currently no SRO use in any of the
apartments or any of the floors of the building, including floors 2,3,4,5. The pictures attached show
one using with 4 bedrooms and non-keyed locks.”
ii. October 20, 2018 OSE Inspection and Illegal Transient Use Found in 2118 3rd Avenue, Apartments 2 and 4
241. On October 20, 2018, DOB Inspector Botticelli and OSE Inspection Team
conducted another inspection of 2118 3rd Avenue. This inspection was triggered by an October 10,
2018 complaint to the City that, “the entire building is a hotel . . . illegal hotel rooms in residential
buildings.”
242. Upon arriving at the building, DOB Inspector Botticelli and OSE Inspection Team
interviewed a short-term guest from Canada named Bonnie staying in Apartment 2, who stated that
she was staying from October 18, 2018 to October 22, 2018, and was travelling with five other
people. According to the Canadian guest, they made reservations through Airbnb for a total of
1,824.06 Canadian dollars.47 The Canadian guest stated that the Airbnb host was named “Viktoria”
with phone number (646) 370-4577, but a gentleman let them into the apartment and his number
47 Approximately $1,365.82.
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was (646) 719-3743. The Canadian guest stated that no permanent residents were present during
their stay.
243. As part of the same inspection on October 20, 2018, DOB Inspector Botticelli and
OSE Inspection Team interviewed a short-term guest from Montreal, Canada named Michael in
Apartment 4. The guest Michael stated that he was travelling with 8 other people, and made his
reservations on Airbnb for the transient stay from October 19, 2018 to October 22, 2018, for
1,300.00 Canadian dollars.48 The guest Michael also stated that the Airbnb host was named “Egor”
with the phone number was (646) 719-3743, the same number given for the Airbnb host for
Apartment 2. Lastly, the guest Michael stated that no permanent residents were present during their
stay.
244. Upon further investigation, DOB Inspector Botticelli found the advertisements
offering illegal short-term rentals in 2118 3rd Avenue on Airbnb.
245. Based on his inspection and observations, DOB Inspector Botticelli issued
five Summonses and Commissioner’s Orders based on the violating conditions he observed. A
description of each violation is set forth below:
NOV # Date: Violation Noted: 35347769J 10/20/2018 Permanent dwelling used/converted for other than permanent residential purposes. 35347770R 10/20/2018 Failure to comply with automatic fire sprinkler requirements for transient use. 35347771Z 10/20/2018 Failure to provide required means of egress for transient use for every floor for transient use. 35347772K 10/20/2018 Failure to provide fire alarm system for transient use. 35347773M 10/20/2018 Work without a permit. Work noted at Apts. #2 and Apt. #4 … erected full height partition walls to create additional bedroom at living room.
48 Approximately $973.71.
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246. DOB Inspector Botticelli also issued two advertising summonses to Defendants Itah
and Beckman for their October 20, 2018 illegal advertisements of 2118 3rd Avenue for transient
stays on Airbnb.
FIRST CAUSE OF ACTION CONSUMER PROTECTION LAW – DECEPTIVE TRADE PRACTICES
247. Plaintiff repeats and realleges paragraphs “1” through “246” as if contained
herein.
248. A merchant impliedly represents that the products and services that she or he
advertises and sells are both legal and safe.
249. Moreover, the Consumer Protection Law provides that “[n]o person shall engage
in any deceptive or unconscionable trade practice in the sale, lease, rental or loan or in the
offering for sale, lease, rental, or loan of any consumer goods or services, or in the collection of
consumer debts.” Admin. Code § 20-700.
250. Admin. Code § 20-701 defines a deceptive trade practice as
any ... representation of any kind made in connection with the sale, lease, rental or loan or in connection with the offering for sale, lease, rental, or loan of consumer goods or services ... which has the capacity, tendency or effect of deceiving or misleading consumers. Deceptive trade practices include but are not limited to: ... (2) the use, in any oral or written representation, of exaggeration, innuendo or ambiguity as to a material fact or failure to state a material fact if such use deceives or tends to deceive.
251. Operator Defendants have breached their implied warranty and committed
deceptive trade practices by offering and advertising illegal transient occupancy in permanent
residential buildings. OSE Inspection Team issued Operator Defendants 17 OSE advertising
summonses
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252. Operator Defendants’ written statements and advertisements inducing tourists and
other visitors to New York City to book accommodations in Class A multiple dwellings for stays
of less than 30 days, such rentals being illegal and unsafe, have by false representations and
omissions of material fact misled or deceived or tended to mislead and deceive consumers as to
the use of those accommodations. Operator Defendants have thereby committed deceptive trade
practices in violation of § 20-700 of the Consumer Protection Law.
253. The City has discovered at least 250 advertisements offering illegal transient use
of permanent residential dwelling units in the City created or maintained by or on behalf of
Operator Defendants.
SECOND CAUSE OF ACTION STATUTORY PUBLIC NUISANCE – BUILDING CODE VIOLATIONS: ILLEGAL CONVERSION OF OCCUPANCY – INJUNCTION AND CIVIL PENALTIES
254. Plaintiff repeats and realleges paragraphs “1” through “253” as if contained
herein.
255. In 1977, the City Council enacted the Nuisance Abatement Law (codified as
amended as Admin. Code § 7-701 et seq.), finding that:
Public nuisances exist in the City of New York in the operation of certain commercial establishments and the use or alteration of property in flagrant violation of the building code, zoning resolution, … multiple dwelling law … all of which interfere with the interest of the public in the quality of life and total community environment, the tone of commerce in the city, property values and the public health, safety, and welfare; the council further finds that the continued occurrence of such activities and violations is detrimental to the health, safety, and welfare of the people of the city of New York . . . .
Admin. Code § 7-701.
256. Under Admin. Code § 7-703(d) of the Nuisance Abatement Law, any premises in
violation of Admin. Code §§ 28-105.1 and/or 28-118.3.2 is deemed to be a public nuisance.
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Admin. Code § 28-105.1 prohibits building construction or alteration work without a permit
having first been issued by the Department of Buildings. Admin. Code § 28-118.3.2 provides
that no change in use or occupancy that is inconsistent with the last issued Certificate of
Occupancy shall be made unless and until a new Certificate of Occupancy is first obtained from
DOB authorizing such change.
257. As summarized above, the City has determined that there has been a change in
use or occupancy at the Subject Buildings which is inconsistent with the last issued Certificate of
Occupancy or otherwise applicable DOB record, and that Defendants have altered such use and
occupancy in the Subject Buildings without first obtaining a permit or new Certificate of
Occupancy from DOB authorizing such change.
258. Pursuant to Admin. Code §§ 7-706(a) and 7-714, the City is entitled to a judgment
against Defendants, their agents, assigns, employees and all persons acting individually or in
concert with them, permanently restraining such public nuisances.
259. Defendants have intentionally conducted, maintained or permitted the public
nuisances alleged in this cause of action.
260. Pursuant to Admin. Code § 7-706(h), the City is entitled to a judgment against
Defendants, their agents, assigns, employees and all persons acting individually or in concert
with them, permanently enjoining them from using or occupying, or maintaining, managing,
operating, or permitting the use or occupancy of any of the units in the Subject Buildings for
transient use and occupancy, and further ordering that they pay a separate penalty of $1,000 for
each day that Defendants intentionally conducted, maintained or permitted the public nuisances
alleged in this cause of action.
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THIRD CAUSE OF ACTION STATUTORY PUBLIC NUISANCE – BUILDING CODE VIOLATIONS ILLEGAL OCCUPANCY
261. Plaintiff repeats and realleges paragraphs “1” through “260” as if contained
herein.
262. Under Admin. Code § 7-703(d), any premises which is in violation of Admin.
Code § 28-118.3.2 is deemed to be a public nuisance. Admin. Code § 28-118.3.2 provides that
no change in use or occupancy which is inconsistent with the last issued certificate of occupancy
shall be made unless and until a new certificate of occupancy is first obtained from DOB
authorizing such change.
263. As summarized above, the City has determined that there has been a change in
use or occupancy at the Subject Buildings which is inconsistent with the last issued certificate of
occupancy or otherwise applicable DOB record, and that Defendants have altered such use and
occupancy in the Subject Buildings without first obtaining a permit or new certificate of
occupancy from DOB authorizing such change.
264. Pursuant to Admin. Code §§ 7-706(a) and 7-714, the City is entitled to a judgment
against Defendants, their agents, assigns, employees and all persons acting individually or in
concert with them, permanently restraining such public nuisances.
265. Defendants have intentionally conducted, maintained or permitted the public
nuisances alleged in this cause of action.
266. Pursuant to Admin. Code § 7-706(h), the City is entitled to a judgment against
Defendants, their agents, assigns, employees and all persons acting individually or in concert
with them, permanently enjoining them from using or occupying, or maintaining, managing,
operating, or permitting the use or occupancy of any of the units in the Subject Buildings for
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transient use and occupancy, and further ordering that they pay a separate penalty of $1,000 for
each day that Defendants intentionally conducted, maintained or permitted the public nuisances
alleged in this cause of action.
FOURTH CAUSE OF ACTION STATUTORY PUBLIC NUISANCE – FAILURE TO MAINTAIN BUILDING IN CODE COMPLIANCE – INJUNCTION AND CIVIL PENALTIES
267. Plaintiff repeats and realleges paragraphs “1” through “266” as if contained
herein.
268. Under the Nuisance Abatement Law, Admin. Code § 7-703(d), any premises in
violation of Admin. Code § 28-301.1 is deemed to be a public nuisance. Admin. Code § 28-
301.1 requires that all buildings and all parts thereof be “maintained in a safe condition,” and that
“[a]ll service equipment, means of egress, materials, devices, and safeguards that are required in
a building by the provisions of this code, the 1968 building code or other applicable laws or
rules, or that were required by law when the building was erected, altered, or repaired, shall be
maintained in good working condition.”
269. At all relevant times of the inspections, OSE Inspection Team observed
conditions constituting a failure to maintain the Subject Buildings in a code-compliant condition.
Upon information and belief, those conditions continue unabated to date.
270. As a result of the foregoing, there exist public nuisances at the Subject Buildings.
271. Pursuant to Admin. Code §§ 7-706(a) and 7-714, the City is entitled to a judgment
against Defendants, their agents, assigns, employees and all persons acting individually or in
concert with them, permanently restraining such public nuisances.
272. Defendants have intentionally conducted, maintained or permitted the public
nuisances alleged in this cause of action.
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273. Pursuant to Admin. Code § 7-706(h), the City is entitled to a judgment against
Defendants, their agents, assigns, employees and all persons acting individually or in concert
with them, permanently enjoining them from using or occupying, or maintaining, managing,
operating, or permitting the use or occupancy of any of the units in the Subject Buildings for
transient use and occupancy, and further ordering that they pay a separate penalty of $1,000 for
each day that Defendants intentionally conducted, maintained or permitted the public nuisances
alleged in this cause of action.
FIFTH CAUSE OF ACTION STATUTORY PUBLIC NUISANCE – CRIMINAL NUISANCE – INJUNCTION AND CIVIL PENALTIES
274. Plaintiff repeats and realleges paragraphs “1” through “273” as if contained
herein.
275. Under Admin. Code § 7-703(l), any building, erection or place wherein there is
occurring a criminal nuisance as defined in Penal Law § 240.45 is a public nuisance.
276. Pursuant to Penal Law § 240.45(1), a person has committed a criminal nuisance
when, “[b]y conduct either unlawful in itself or unreasonable under all the circumstances, he
knowingly or recklessly creates or maintains a condition which endangers the safety or health of
a considerable number of persons.”
277. Defendants have unreasonably and unlawfully created and maintained conditions
which seriously endanger the life and safety of numerous persons who book transient
accommodations at the Subject Buildings, in violation of their legal and permissible use and
occupancy, violations which were found to be Class 1 (Immediately Hazardous) violations by the
ECB. These violations included a lack of fire safety measures required to be provided for
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transient occupancies. Additional fire safety violations led to the issuance of FDNY Violation
Orders and FDNY Criminal Court Summonses.
278. The hazardous conditions at the Subject Buildings have continued uncorrected
over a substantial period of time, notwithstanding NOVs and orders from the DOB
Commissioner, and findings by the ECB.
279. Defendants have intentionally and knowingly endangered the safety of a
considerable number of persons.
280. As a result of the foregoing, there exists a public nuisance at the Subject
Buildings.
281. Pursuant to Admin. Code §§ 7-706(a) and 7-714, the City is entitled to a judgment
against Defendants, their agents, assigns, employees and all persons acting individually or in
concert with them, permanently restraining such public nuisance.
282. Pursuant to Admin. Code § 7-706(h), the City is entitled to a judgment against
Defendants, their agents, assigns, employees and all persons acting individually or in concert
with them, permanently enjoining them from using or occupying, or maintaining, managing,
operating, or permitting the use or occupancy of any of the units in the Subject Buildings for
transient use and occupancy, and further ordering that they pay a separate penalty of $1,000 for
each day that Defendants intentionally conducted, maintained or permitted the public nuisances
alleged in this cause of action.
SIXTH CAUSE OF ACTION ILLEGAL OCCUPANCY – VIOLATION OF THE MULTIPLE DWELLING LAW
283. Plaintiff repeats and realleges paragraphs “1” through “282” as if contained
herein.
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284. MDL § (4)(8)(a) prohibits renting any unit in Class “A” multiple dwellings for
less than 30 days. The law provides that “[a] class A multiple dwelling shall only be used for
permanent residence purposes,” the term “permanent residence purposes” being defined by the
statute to “consist of occupancy of a dwelling unit by the same natural person or family for thirty
consecutive days or more . . . .”
285. Notwithstanding the requirements of the MDL, Defendants have advertised,
permitted, maintained and used, continue to advertise, permit, maintain, and use dwelling units at
the Subject Buildings for transient occupancies of less than 30 days, in violation of the MDL.
Based on the OSE’s inspections of the Subject Buildings on 17 separate occasions, multiple units
are being so illegally used and occupied, and have been so used since at least 2014.
286. Pursuant to MDL § 306, the City is entitled to judgment against Defendants, their
agents, assigns, employees and all persons acting individually or in concert with them,
permanently enjoining them from using or occupying, or maintaining, managing, operating, or
permitting the use or occupancy of any of the units in the Subject Buildings for transient use and
occupancy as prohibited by the MDL, and further directing them to restore the Subject Buildings
to use and occupancy as permanent residences, as required by the MDL for Class A multiple
dwellings.
SEVENTH CAUSE OF ACTION BUILDING CODE VIOLATIONS – ILLEGAL CHANGE OF OCCUPANCY
287. Plaintiff repeats and realleges paragraphs “1” through “286” as if contained
herein.
288. Admin. Code § 28-118.3.1 prohibits an alteration or change in the use or
occupancy of any building unless and until a written permit has been issued by DOB in
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accordance with the requirements of the Building Code, and a Certificate of Occupancy issued
for the new use or occupancy.
289. Admin. Code § 28-101.5 defines “alteration” to be “[a]ny construction, addition,
change of use or occupancy, or renovation to a building or structure in existence.”
290. Admin. Code § 28-118.3.2 provides that no change may be made in the
occupancy or use of an existing building which is inconsistent with the last issued certificate of
occupancy of such building or which would bring it under some special provision of the code or
other applicable law or regulation.
291. Admin. Code § 28-118.3.4 provides that a building in existence prior to January
1, 1938, and legally used or occupied without a certificate of occupancy may continue to be so
used only so long as there is no change in the existing use or occupancy.
292. Admin. Code § 28-118.3 provides that Admin. Code §§ 28-118.3.1 through 28-
118.3.4 apply to all completed buildings.
293. The legally permissible residential use and occupancy of all of the Subject
Buildings, and each of their apartments, is for permanent residential occupancy.
294. Defendants have caused and/or permitted the transient use and occupancy of at
least one apartment in each of the Subject Buildings in violation of their legally permissible use
and occupancy.
295. Defendants have not filed plans with the DOB to change the use and occupancy
of any of the apartments of the Subject Buildings for transient occupancy.
296. The DOB has not approved plans or issued permits for any change of use and
occupancy at the Subject Buildings for transient occupancy.
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297. Defendants have permitted, directed, and maintained the arrangement, use, and
occupancy of the Subject Buildings in violation of their legally permissible use and occupancy.
298. Defendants have changed, or permitted to be changed, the use and occupancy of
the Subject Buildings contrary to their legally permissible use and occupancy, having illegally
done so without first obtaining a Certificate of Occupancy for such changed use.
299. Defendants are, therefore, in violation of Admin Code §§ 28-105.1, and 28-
118.3.1 through 28-118.3.4.
300. Admin. Code §§ 28-205.1 and 28-202.1 provide that any person who shall violate
any provision of the building laws, rules or regulations enforceable by DOB shall be subject to
the payment of a civil penalty, to be recovered in a civil action brought in the name of the City in
any court of record.
301. By reason of the foregoing, pursuant to Admin. Code § 28-205.1, the City is
entitled to judgment against Defendants, their agents, assigns, employees and all persons acting
individually or in concert with them, permanently enjoining them from using or occupying or
permitting the use or occupancy of any of the units in the Subject Buildings for short-term,
transient use or occupancy of less than thirty days, and further directing them to restore the
Subject Buildings to the arrangement and occupancy permitted for it, and to comply with all
other sections of the Building Code.
302. Defendants have violated Admin. Code §§ 28-105.1 and 28-118.3.1 through 28-
118.3.4.at the Subject Buildings, all of which are enforceable by DOB.
303. Therefore, the City is entitled to a separate judgment against Defendants in the
amount set forth in Admin. Code § 28-202.1 for each violation of the laws referenced above,
which laws are enforceable by DOB.
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EIGHTH CAUSE OF ACTION COMMON LAW NUISANCE – INJUNCTION AND COMPENSATORY AND PUNITIVE PENALTIES
304. Plaintiff repeats and realleges paragraphs “1” through “303” as if contained
herein.
305. Defendants have illegally advertised, operated, and maintained apartments for
short-term stays of less than 30 days in multiple dwellings, which legally are only available for
permanent residency, creating serious safety risks for the transient occupants of those
apartments, significant security risks in buildings not equipped to handle the security problems
associated with transient occupancy, and a degradation in the quality and comfort of the
surrounding residents and neighbors, created by noise, filth, and the excessive traffic of unknown
and constantly changing individuals entering their places of abode.
306. The unlawful activities committed by Defendants and the unsafe building
conditions allowed by Defendants are detrimental to the welfare, property, and safety of the
citizens of the City of New York and the public at large.
307. They offend, interfere with and cause damage to the public in the exercise of
rights common to all, in a manner that endangers the property, safety and well-being of a
considerable number of persons.
308. Defendants are therefore maintaining a public nuisance as known at common law
and in equity jurisprudence.
309. Unless restrained by order of this Court, Defendants will continue their illegal
activities and will absorb the costs of any fines and penalties imposed upon them as routine
operating expenses. Meanwhile, the City will be forced to continue expending its limited
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resources in continued attempts to abate this harmful nuisance through administrative
inspections, summonses, and violation orders.
310. The City, therefore, has no adequate remedy at law.
311. As a result of the foregoing, the City is entitled to a judgment against Defendants,
their agents, assigns, employees and all persons acting individually or in concert with them,
permanently restraining the above described common law public nuisance going on unabated
within the Subject Buildings.
312. Defendants have acted willfully, wantonly, and with a recklessness indicating an
improper motive, and have engaged in intentional misconduct and recklessly and wantonly
disregarded the safety, welfare, and rights of others in permitting and maintaining the aforesaid
common law public nuisance within the Subject Buildings.
313. Defendants have continued to engage in their illegal business, unabated. They
actively advertise and seek to rent permanent residence units to tourist and visitors to New York
City for stays of less than 30 days, knowing that this constitutes an illegal occupancy.
Defendants have maintained this activity despite being put on notice by the City through the
issuance of repeated violations by DOB and FDNY, ordering that they immediately cease the
transient occupancy violations, and despite the OSE Inspection Team’s issuance of advertising
summonses based on Defendants’ continuing advertisements.
314. The City is thus entitled to compensatory and punitive damages because of the
knowing and ongoing common law nuisance created, maintained, and continued by Defendants.
WHEREFORE, Plaintiff, the City, demands judgment against Defendants as follows:
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1. Declaring that Defendants and each of them had knowledge of the existence of
the unlawful acts complained of herein, and failed to take reasonable measures to abate such
unlawful activity;
2. Declaring that Operator Defendants and each of them have managed, used,
advertised, booked, and operated numerous dwelling units at the Subject Buildings as well as
other Class A multiple dwellings in the City for illegal transient use and occupancy though
prohibited by State and local laws, and continue to manage, use, advertise, book, and operate the
Subject Buildings as well as other Class A multiple dwellings in the City in a manner as to
constitute deceptive trade practices and a public nuisance;
3. With respect to the FIRST CAUSE OF ACTION, pursuant to Admin. Code § 20-
703, an order:
a. Permanently enjoining Operator Defendants, their agents, employees or representatives, and every person or entity acting individually or in concert with them, from further violating the Consumer Protection Law and from committing the deceptive acts or practices alleged herein;
b. Imposing upon Operator Defendants fines in the amount of Five Hundred Dollars ($500) for each and every knowing violation of the Consumer Protection Law, and Three Hundred Fifty Dollars ($350) for each and every unknowing violation of the Consumer Protection Law; and
4. With respect to the SECOND, THIRD, FOURTH, AND FIFTH CAUSES OF
ACTION, pursuant to Admin. Code §§ 7-706(a), 7-714, and 7-706(h):
a. Directing that each of the Subject Buildings shall be permanently and perpetually enjoined and restrained as a place in or upon which to conduct, maintain, advertise, or continue the public nuisances complained of herein by Defendants and by any other person or persons;
b. Permanently restraining Defendants, their agents, assigns, employees or representatives, and every person or entity acting individually or in concert with them from in any way permitting the Subject Buildings to be used, advertised, or occupied in any manner which violates the legally permitted use and occupancy for the premises; and
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c. Directing Defendants and each of them to pay to the City a separate penalty of $1,000 for each day that each of the Defendants intentionally conducted, maintained or permitted each public nuisance complained of in the SECOND CAUSE OF ACTION, and for each day that each of the Defendants intentionally conducted, maintained or permitted each public nuisance complained of in the THIRD CAUSE OF ACTION, and for each day that each of the Defendants intentionally conducted, maintained or permitted each public nuisance complained of in the FOURTH CAUSE OF ACTION, and for each day that each of the Defendants intentionally conducted, maintained or permitted each public nuisance complained of in the FIFTH CAUSE OF ACTION; and
5. With respect to the SIXTH CAUSE OF ACTION, pursuant to section 306 of the
Multiple Dwelling Law:
a. Permanently restraining Defendants, their agents, assigns, employees or representatives, and every person or entity acting individually or in concert with them from in any way permitting the Subject Buildings as well as other Class A multiple dwellings in the City to be used, advertised, or occupied in any manner which violates the legal use and occupancy for the premises, as permitted by Section 4 of the Multiple Dwelling Law or other State and City laws; and
6. With respect to the SEVENTH CAUSE OF ACTION, pursuant to sections 28-
205.1 and 28-202.1 of the New York City Admin. Code:
a. Permanently restraining Defendants, their agents, assigns, employees or representatives, and every person or entity acting individually or in concert with them from in any way permitting the Subject Buildings as well as other permanent residential buildings in the City to be used, advertised, or occupied in any manner which violates the legal use and occupancy for the premises, as permitted by the Multiple Dwelling Law and the New York City Building Code, or which violates the provisions of the Building Code, which prohibit a change in the use or occupancy of a building without first having obtained a written permit from the Department of Buildings and a Certificate of Occupancy authorizing a change in occupancy; and
b. Directing that Defendants and each of them pay to Plaintiff, the City, the maximum penalty set forth in sections 28-202.1 and 28-202.2 for each violation of the provisions of the building laws; and
7. With respect to the EIGHTH CAUSE OF ACTION, pursuant to the common law
doctrine of public nuisance:
a. Permanently enjoining Defendants, their agents, assigns, employees or representatives, and every person or entity acting individually or in concert with
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them, from conducting, maintaining or in any way permitting the common law public nuisance described herein; and
b. Awarding Plaintiff, the City, compensatory damages in an amount to be set by the court, and punitive damages in the amount of $500,000 for the willful and wanton perpetuation of a common law public nuisance by defendants; and
8. Pursuant to Admin. Code § 7-714(a), directing the sheriff of the City of New
York to remove from the Subject Buildings all furniture, fixtures, equipment, material,
instruments and movable property of whatever kind and nature used in conducting or
maintaining the nuisances complained of herein and directing said Sheriff to sell the same in the
manner provided for the sale of chattels under execution; and
9. Pursuant to Admin. Code § 7-714(g), allowing, in addition to the costs and
disbursements allowed by the Civil Practice Law and Rules, the actual costs, expenses and
disbursements of Plaintiff, the City, in investigating, bringing and maintaining this action, and
directing that Plaintiff, the City, have execution therefor; and
10. Taxing and allowing the costs and disbursements against Defendants and
directing that Plaintiff, the City, have execution therefor; and
11. Granting to Plaintiff, the City, such other and further relief as the Court may deem
just, proper and equitable.
Pursuant to section 130-1.1a of the Rules of the Chief Administrator, it is certified that, to
the best of my knowledge, information and belief, formed after a reasonable inquiry under the
circumstances, that the presentation of the papers attached hereto and the contentions contained
therein are not frivolous.
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Dated: New York, New York
January 11, 2019
ZACHARY W. CARTER
Corporation Counsel of the City of New York
Attorney for Plainti
By: FRANCINE VLANTE d'KEEFFE Special Assistant Corporation Counsel Mayor's Office of Special Enforcement 4* 22 Reade Street, Floor New York, NY 10007
Tel.: (212) 416-7830 Email: [email protected]
Of counsel
Hsiao-Hsiang (Catherine) Wan
Deputy Director
.
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VERIFICATION
SHERYL NEUFELD, an attorney admitted to practice before the courts of the State of
to be under the penalties of New York, hereby affirms the following true, perjury pursuant to
C.P.L.R. 2106:
I have been duly designated as Acting Corporation Counsel of the City of New York and,
as such, I am an officer of the City of New York, a petitioner in the within action. I have read
the foregoing petition and know the contents thereof; the same are true to my knowledge except
as to those alleged on information and belief, and as to those matter I believe them to be true.
The reason why this verification is not made by the City of New York is that it is a
corporation. My belief as to all matters not stated upon my knowledge is based upon
information obtained from various departments of the city governments, from statements made
to me by certain officers or agents of the City of New York, and from statements, affidavits or
affirmations of other persons.
Dated: New York, New York
January 11, 2019
SHERYL NE ELD, ESQ.
City v. METROPOLITAN PROPERTY GROUP, INC
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