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New York Attorney General Letitia James is taking action against a Brooklyn developer she says swindled millions from families by taking money for condominiums that don’t exist.
Xi Hui “Steven” Wu filed an offering plan for a 25-unit condo building in Bay Ridge, but the AG's office said in a lawsuit Wu never put the correct paperwork in with the Department of Finance, meaning the property never achieved condo status with separate tax lots and deeds to be transferred over to buyers, The Real Deal reports.
Wu still sold those nonexistent condos, mainly to Chinese immigrant families, some of whom put in their life savings. In total he took in some $5M from the sale and fake mortgage payments and building fees, per James' office.
Those funds went into Wu’s personal expenses, rather than an escrow account. James’ suit also names Wu’s ex-wife, Xiao Rong Yang, and Wu’s construction companies and LLC connected to the 345 Ovington Ave. development.
“Steven Wu took advantage of hardworking immigrants and sold them and their families a lie,” James said in a statement. “He earned their trust as a pillar of the community only to exploit it and steal their life’s savings. These families were cheated out of their livelihoods, so we’re taking action to ensure they get their money back.”
The cheated buyers won judgments against Wu in May for the money they paid him. Many of them believed they were condo owners, but never actually signed contracts — just single-page agreements that were not enforceable. The building was foreclosed on by the lender, Maxim Credit Group LLC, after Wu ceased payments on the $6M loaned he got to build the property.
When questioned by James’ office, per the statement, Wu provided proof of escrow accounts, but James says an investigation showed those funds were just money Wu had put in himself.
James is seeking permanent bans for both Wu and Yang on real estate dealing in New York.
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