The real estate firm run by the family of presidential son-in-law Jared Kushner has been subpoenaed by federal prosecutors for information relating to falsified records filed dozens of times over New York City buildings the company owns.
The company confirmed that the subpoena was issued last month after a report by Associated Press alleged that the company filed dozens of false forms regarding the number of rent-controlled tenants that occupied their buildings.
The company issued a statement saying, it has “nothing to hide and is cooperating fully with all legitimate requests for information, including this subpoena.”
Records obtained from the City of New York show that the company, Kushner Cos, falsely filed the documents that allowed it to nuisance tenants in buildings they owned with loud construction conducted at all hours, dusty conditions and leaking water. Tenants believe the tactics were deliberate, an effort to get low-rent-paying occupants to move out, making way for higher-rent-paying tenants.
The Associated Press reported that Kushner Cos. alleged that the company had zero rent-controlled tenants in thirty-four buildings across New York between 2013 and 2016 when the company actually had more than 300. “Rent-controlled” is a New York City buildings designation that protects tenants from large rent increases. Tenants in rent-controlled apartments also pay significantly lower rents than tenants in market-rent units.
Housing Rights Initiative, a tenant-advocacy organization, found that in all, Kushner Cos. filed at least eighty false applications for construction permits on which the company indicated that there were no rent-controlled residents living on the sites, a declaration that allowed the company to bypass stricter oversight of construction crews as well as potentially, unscheduled sweeps by inspectors making sure tenants are not being harassed by landlords.
Some of the tenants of the buildings owned by Kushner Cos, allege the company ordered construction crews to perform loud and disruptive repairs in the middle of the night, in order to get them to leave. Tenants who vacate rent-controlled apartments free management companies to raise the rent by thousands of dollars a month.
Kushner Cos. bought a group of three apartment buildings in the Astoria neighborhood of Queens, NY, in 2015 where most of the tenants were in rent-controlled apartments. At the time Kushner Cos. took the buildings over there were ninety-four rent-stabilized apartments. Two years later there were twenty-five. The company sold the buildings at that time for $60 million, nearly 50% more than it paid.
Jared Kushner was CEO of Kushner Cos. during that time and while none of the documents in question bear his signature, the revelations offer some insight into the ethos of the company.
“Kushner would never deny any tenant their due-process rights,” the company said at the time, adding that they “…renovated thousands of apartments and developments with minimal complaints over the past 30 years.”
The penalty for submitting false documents to the city’s Department of Buildings is a misdemeanor that carries with it a fine of up to $25,000. But real estate experts say the rules are often broken with little to no consequences. Most of the time the City demands that landlords file amended forms with the correct information. Human Rights Initiative found that Kushner Cos. amended dozens of forms for the buildings in question, most of them a year or two later.
The company has also been subpoenaed over a program by which United States visas were traded for investments in their real estate projects from Chinese investors.
Photo by Ryan Johnson via WikiMedia Commons