Landlord found liable for fraud in Bay Ridge, ordered to pay $4.2 million 

 Courts found landlord Xi Hui “Steven” Wu and his companies liable for fraud after determining that he illegally sold non-existent condominium units in Bay Ridge to families.

New York County Supreme Court ruled that Wu unlawfully collected millions of dollars in down payments and fees from 20 immigrant families who believed they were buying homes and was ordered to pay over $4.2 million plus 10 years of interest. 

Attorney General Letitia James sued Wu, his ex-wife Xiao Rong Yang, and his companies TCJ Construction Inc. and 345 Ovington LLC in 2022 after an Office of the Attorney Generalinvestigation found that Wu orchestrated a years-long scheme to sell fake condominium units and steal more than $5 million from families in his own community.

The court awarded $4,227,888 in restitution, plus nine percent interest dating back to 2016, with the full amount to be returned to the families Wu defrauded.

The ruling was announced by James Jan. 9.

“Steven Wu preyed on hardworking immigrant families, abused their trust, and stole the savings they had set aside to build a stable future,” said James. “These families believed they were buying homes, when in reality, they were being sold nothing but lies. This order returns money to the families Wu cheated and ensures he can never again exploit New Yorkers through fraudulent real estate schemes. I am thrilled that these families will finally see justice.”

In January 2013, Wu submitted an offering plan to OAG for a proposed 25-unit condominium building at 345 Ovington Ave. The offering plan was filed with OAG, but Wu never completed the required steps with the New York City Department of Finance to legally create a condominium. 

The building was never subdivided into individual units, no separate tax lots were established, and no lawful condominium deeds were ever created.

Even though Wu had no legal authority to sell condominium units, he continued to “sell” units to immigrant families, many of whom moved into the building under the assumption that they owned their homes. 

The OAG stated Wu targeted families who trusted him as a prominent developer in the neighborhood and relied on informal, single-page agreements written in Chinese, rather than formal purchase contracts as required by law. 

There were no condominium units to sell, and the families received no legal ownership interest in exchange for their payments.

“We are grateful to Attorney General James and happy for the 20 families at 345 Ovington Street who have finally seen justice prevail after nearly losing everything as a result of this fraudulent scheme,” said Thomas Yu, executive director of Asian Americans for Equality . “Not only did Attorney General James successfully prosecute this case, but she also worked with the residents and AAFE to prevent any evictions and ensure that the dream of homeownership stayed alive for these families. 

“We are proud to have collaborated with the Attorney General and other city and state officials to rescue the building from bankruptcy and to facilitate the redevelopment of 345 Ovington as a middle-income cooperative.”

In addition to collecting payments from the families, Wu also collected monthly residential mortgage payments from many of the residents who did not pay for their units in full. Nearly all of the residents were also making monthly payments to Wu, which they believed were for condominium common charges. 

The OAG also found that Wu repeatedly lied to regulators and fabricated documents in an effort to hide his fraud. When questioned by OAG, Wu submitted fake purchase agreements and escrow documentation to make it appear that he lawfully collected and held purchaser deposits.