D.C. Seeks To Shut Down Landlord, Alleging 'Ponzi-Like' Housing Scheme

D.C. Attorney General Brian Schwalb’s office filed a lawsuit Thursday morning against a landlord it alleges has made a business out of defrauding lenders and the D.C. government — while leaving its hundreds of apartments in the District in squalor.

The AG’s office filed the civil suit in the D.C. Superior Court against defendants Ali “Sam” Razjooyan and his associates, Eimon Razjooyan and Houri Razjooyan.

The suit says the trio operate a “criminal enterprise” and seeks to prohibit them from doing business in the city. It also seeks restitution for the tenants, as well as damages and civil penalties.

Sam Razjooyan provided a written response to Bisnow saying he strongly disagrees with the allegations. He said the AG's claims haven’t yet been proven and should be decided in a courtroom rather than in the press. 

“The Office of the Attorney General has suggested that this action is about protecting District residents,” Razjooyan said. “In reality, its approach has imposed substantial costs on property owners and the housing system without producing meaningful solutions. Enforcement actions that prioritize publicity over process ultimately burden the very residents they claim to protect.”

“I will address these allegations in court, where they belong,” he added. “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.”

Schwalb's office alleges the Razjooyan enterprise has operated a “Ponzi-like scheme” that starts with buying distressed apartment buildings that are still habitable. It then allegedly obtains financing by telling lenders it plans to renovate them and completes some nominal improvements before allowing the properties to fall into disrepair while pocketing the renovation loans — and using them to buy more properties. 

It said the Razjooyans also misrepresent the condition of the properties to lenders to receive fraudulent recapitalizations and operate them through a tangled web of limited liability companies, obscuring their ownership.

“The Enterprise’s illegal scheme has endangered hundreds of tenants and swindled numerous lenders,” the complaint says.

The lenders it names as victims include Michigan-based Red Oak Capital Holdings and California-based New Day Commercial Capital. 

The District has had to pay “hundreds of thousands” of dollars to “inspect, document, and remediate” the violations at Razjooyan properties, the suit says. And it alleges Sam Razjooyan has fraudulently obtained more than $16M from D.C. housing subsidy payments. 

Schwalb held a press conference Thursday morning with representatives from the D.C. Department of Buildings as well as nonprofit Legal Aid DC, which has represented Razjooyan tenants in the past.

“The Razjooyans’ illegal enterprise is fueled by a pattern of cheating everyone they deal with, banks, private investors and the D.C. government, all while treating the tenants as collateral damage,” Schwalb said from the podium. 

It isn’t the first time the AG’s office has sued Razjooyan companies for alleged fraud and failing to upkeep their properties, endangering residents. In 2024, his office filed two lawsuits against Razjooyan and his affiliates over two rent-controlled properties: a 32-unit apartment complex in Ward 8 and an 83-unit complex in Ward 7. 

But this time, it is taking aim at the whole enterprise using federal anti-racketeering law. 

“The District should not have to keep playing whack-a-mole, taking on the Enterprise property by property,” the filing says. 

The suit also alleges a violation of the city’s False Claims Act and the Consumer Protection Procedures Act. 

As head of the enterprise, Sam Razjooyan built up a portfolio of 70 buildings totaling more than 600 residential units between 2015 and 2025, 90% of which were in Wards 7 and 8, according to the complaint. 

It says Razjooyan has “amassed well over 4,000 Property Maintenance and Housing Code violations” and millions of dollars in fines from D.C.’s Department of Buildings, while it has only abated “about  20% of these violations.” 

It gives examples of the “dire reality” the tenants of this enterprise have lived with, including “mountains of trash and severe rodent and cockroach infestations,” no heat throughout multiple winters, and a fire “likely caused by faulty wiring from illegal construction.”

“To our clients, many of whom are Black, low-income and in Ward 7 and 8, this is their home,” DC Legal Aid Legal Director Megan Browder said at Thursday’s press conference. “They've had to fight, often for years, to have what we're all entitled to: a clean place to live that's up to the housing code.”

Many of Razjooyan’s properties have been sold at bankruptcy or have been put into trusteeship or receivership, but Razjooyan is still known to be in control of six that total 251 units, the complaint says: 1035 48th St. NE; 2840, 2844, 2850 and 2908 Langston Place SE; and 3615 B St. SE. 

The court filing documents the “illegal and inhumane conditions” at those six properties still under Razjooyan’s control.

Many of the units are empty, speakers said at the press conference, but for existing tenants, D.C. will seek an injunction to protect them while the lawsuit unfolds, Schwalb said.