ICYMI: Bergen St. Homeless Shelter Site Part Of $20M Fraud Scheme, Lawsuit Says

CROWN HEIGHTS, BROOKLYN — A building planned for a controversial conversion into a Crown Heights homeless shelter was used in a scheme to defraud investors out of more than $20 million, according to a lawsuit.

The building at 1173 Bergen St. has been earmarked by Mayor Bill de Blasio to shelter 104 homeless seniors.

In the suit filed in federal court by a group of investors, owners Chaskiel Strulovitch and Yechiel Oberlander of CSN Partners are accused of promising big payouts to backers who funded real estate buys across Brooklyn, including the Bergen Street property.

But instead, they used the funds to develop other properties for their "personal enrichment," the suit claims.

The proposed homeless shelter is already the focus of a separate court fight involving a group of neighbors who want to block the city's plans for the shelter. They will be back in court on Wednesday and have submitted the federal lawsuit as an exhibit aimed at highlighting what they say are shady deals.

The neighbors say their area is unfairly overcrowded with shelters. They have already won a temporary restraining order to stop the Bergen Street shelter's opening.

Requests for comment from the city's Department of Homeless Services and an attorney for CSN Partners didn't get an immediate response Monday.

Under de Blasio's plan to open 90 new homeless shelters across the city and close hotel and "cluster" sites, the Bergen Street building would be leased from CSN Partners by the city.

The federal lawsuit was filed on April 10 by four New Yorkers.

It claims that, in August of 2014, Strulovitch and Oberlander approached the investors about a project at 1173 Bergen St. They asked for $2.2 million of the $4.7 million they said would be needed to buy the property, according to the suit.

After the investors gave the money, the suit says, the investors were told the deal had fallen through and that Strulovitch and Oberlander wanted to use the money to buy and renovate a different property in Brownsville.

"But this was a lie," the lawsuit says. The deal hadn't fallen through and Strulovitch and Oberlander intended to use the money invested in the Bergen Street property to "cover a cash shortfall" at a third building, the lawsuit says.

They eventually closed on 1173 Bergen St. for just $2.5 million, city records show — a difference of $2.2 million from the price they had quoted to investors, the lawsuit claims. The deal was just one of several outlined in the lawsuit. Overall, the complainants claim they were swindled out of $20 million.

The lawsuit calls 1173 Bergen St. "a lucrative property the Individual Defendants are actively developing without delay."

Strulovitch is known in NYC as one of the faces of Williamsburg's luxury condos that have sprung up in the last two decades.

Image via Marc Torrence, Patch Staff

Editor's note: This story was originally published on Monday, April 17