affordable housing around the country.<\/a><\/p>\nSchwalb said that \u201cfor every 100 extremely low income renters in the District of Columbia there are only 32 affordable and available homes.\u201d He said the Razjooyans allegedly took advantage of the system through a \u201csprawling illegal enterprise, a complex web of shell LLCs, unlicensed property management and construction companies and straw purchasers.\u201d Those were all designed to conceal the true ownership and condition of the properties to defraud lenders and take advantage of the district\u2019s affordable housing subsidy programs.<\/p>\n
The family owns 70 primarily rent controlled properties, the lawsuit said. The lawsuit accuses them of deceiving lenders with false promises to renovate buildings and then rent them to tenants who receive housing subsidies paid by the D.C. government. The buildings were allowed to fall into disrepair, leaving hundreds of residents living in terrible conditions, the lawsuit said.<\/p>\n
\u201cI strongly disagree with the Attorney General\u2019s allegations. These claims have not been proven, yet they are being represented to the public as though they already have been. That is not how our legal system is supposed to function. This case should be decided in a courtroom based on evidence, not through dramatic headlines,\u201d Ali Razjooyans said in a text. <\/p>\n
He added that Schwalb has suggested this is about protecting residents when it is imposing substantial costs on property owners and the housing system without producing meaningful solutions. \u201cI will address these allegations in court, where they belong. When the full record is developed and the evidence is tested, I am confident it will demonstrate that the accusations do not reflect the facts.\u201d<\/p>\n
Thursday\u2019s lawsuit is a continuation of the action Schwalb\u2019s office took in 2024 when it filed lawsuits on behalf of residents of two properties. The continuing investigation uncovered an intricate array of LLCs, unlicensed property management and construction companies, and straw purchasers designed to conceal the true ownership of certain properties, Schwalb said. <\/p>\n
Schwalb said the racketeering statute allows his office to move beyond individual properties and target the \u201cfoundation of the Razjooyan’s vast operation, the web of fraud and deception that is core to their business mode.\u201d<\/p>\n
Palmer Heenan, a longtime housing expert and civil rights attorney, called the use of RICO in a housing lawsuit \u201cnovel and important\u201d because determining the identity of the actual owner of a property can be complicated when it involves multiple layers of corporate ownership.<\/p>\n
\u201cOne of the advantages is it lets you go backwards into these networks, so it makes it easier to go after all of the companies involved,\u201d he said. \u201cIt will also make it easier for tenants to obtain justice for the horrific conditions they\u2019re all too often been exposed to.\u201d<\/p>\n
In one allegation that appears in the lawsuit, Razjooyan, while attempting to obtain a refinancing loan, claimed to build 10 new units in one property and showed pictures of new doors and apartment numbers to lenders. The doors opened to \u201cconcrete block walls, apparently to deceive appraisers and generate a higher property evaluation,\u201d the lawsuit alleges.<\/p>\n
Conditions for tenants in actual apartments were dire, with some living in rodent- and cockroach-infested properties while others suffered noxious smells from basements full of standing water that collected for days, and some who lived without heat during the entire winter, the lawsuit alleges.<\/p>\n
Schwalb said at the press conference that some of those apartments became uninhabitable, worsening the affordable housing crisis in the city.<\/p>\n
The lawsuit seeks restitution for impacted tenants and to \u201cenjoin the defendants from doing business in the District.\u201d<\/p>\n<\/div>\n
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