Fashion Retailer Sues Joe Sitt, Bert Dweck For Fraud Over Madison Avenue Security Deposit
UPDATE, JUNE 28, 10 P.M. ET: Joe Sitt, Bert Dweck and Yves Salomon settled their lawsuit over a $360K security deposit, with the fashion house withdrawing its allegations without prejudice, The Real Deal reported.
The original story follows below:
High-end fashion house Yves Salomon left its 790 Madison Ave. address when the lease expired in March 2020 — but it still hasn’t seen its security deposit returned, despite multiple court orders, according to a lawsuit.
In a complaint filed on June 7, Yves Salomon claims it has never received a $360K security deposit from its landlord, East 33rd Realty LLC, a company owned by Thor Equities founder Joe Sitt, The Real Deal reports. Sitt has allegedly not complied with a federal court judgment to repay the deposit, plus interest.
“Instead of its security deposit, all that Yves Salomon ever received was the sound of crickets,” the fashion house’s lawyers wrote in the complaint in New York Supreme Court.
The fashion house alleges that Sitt transferred the money into his and business partner and former Thor colleague Bert Dweck's personal bank accounts instead.
The fashion house had already tried asking for the deposit back before taking its landlord to federal court, where it was awarded more than $404K in a default judgment in August, accounting for interest. But it still hasn't been paid, according to the new complaint.
“As it turns out, the reason for the silence is both astonishing, yet sadly predictable: the $360,000 is gone, siphoned out of East 33rd Realty,” lawyers for Yves Salomon wrote.
The complaint cites bank records the attorneys subpoenaed that show Sitt mixing business assets with personal money, draining East 33rd Realty’s corporate bank account and distributing almost $600K to himself and Jensen Equities, owned by Dweck.
The result was that East 33rd Realty’s bank accounts did not contain enough cash to pay debts when they came due — the suit alleges that these transactions were fraudulent.
“East 33rd Realty has been so dominated by Mr. Sitt, and its separate existence as an entity so ignored, that at all relevant times it primarily transacted Sitt’s business instead of its own,” Yves Salomon’s lawyers wrote.
790 Madison Ave. opened in 2015 as Yves Salomon’s first New York City location. Dweck was Thor’s leasing director at the time and therefore responsible for receiving payments from the fashion house including the deposit, the complaint alleges.
Thor Equities told The Real Deal it was unaware of the claim, in spite of the federal lawsuit, the legal discovery period that led to revelations about East 33rd Realty’s bank account and the judgment in the federal case.
“There has been a transfer of the management and control of this property long ago to Bert Dweck of Premier Equities,” a spokesperson for Thor Equities told TRD in a statement. “Thor was not aware of the allegations, and it will be investigated.”