Brooklyn Developer Sued By Attorney General Over Allegedly Selling Fake Condos

345 Ovington Ave. in Bay Ridge, Brooklyn
345 Ovington Ave. In Bay Ridge, Brooklyn

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.

Continue reading this story with a free account

Log in or register
Sign up for more articles like this
Subscribe to Bisnow's New York Newsletters
Related Stories

Houston-Area Manufactured Home Community Offering Units Below $90K

NYC Lawmakers Consider Mandating Lease Extensions For Retailers

Healthpeak Secures Approval For $4.5B Alewife Project

NYC Pushes To Use Opportunity Zone 2.0 For Mamdani's Housing Goals

Google Delays Thompson Center Opening To 2028, Releases New Renderings

Sovereign Fund Backs £500M Subterranean West End Development

Where Capital Meets Opportunity: Navigating The Next Wave Of CRE Financing At Bisnow’s Event On Sept. 30

Discussing Strategic Capital Stack Structuring At Bisnow's Sept. 30 National Finance Event

Bally's Lines Up $560M Loan For Bronx Casino: The N.Y. Deal Sheet

Data Center Spills 5,000 Gallons Of Fuel Into New Jersey River

Historic Brooklyn Hotel To Be Turned Into Ritz-Carlton-Branded Condos

Taconic Partners Sheds Another NYC Life Sciences Property