THE REAL DEAL
By Jen Benepe
Scott Stringer A lawsuit was filed in federal court today against mega-landlord Pinnacle Group and its principal, Joel Wiener, for allegedly fraudulently inflating rents, failing to make needed repairs, and groundlessly harassing tenants as "part of a coordinated business strategy to boost profits and drive middle-income tenants from their apartments," according to statements.
The lawsuit was announced in a press conference held by Public Advocate Betsy Gotbaum and Manhattan Borough President Scott Stringer. Weiner and his company have come under increasing criticism since buying an estimated $1 billion in distressed buildings in Upper Manhattan and parts of the Bronx over the past few years. In its biggest buy, Pinnacle purchased 104 properties from landlord Baruch Singer in 2005 for more than $500 million.
The suit alleges that Pinnacle is trying to drive out many tenants and is subjecting some of them to unnecessary legal machinations. "I have never seen the mere mention of a landlord create so much fear," said Stringer. "Pinnacle is simply a code word for mass eviction." Stringer said his and Gotbaum's offices had met with Pinnacle and spent many hours trying to negotiate a way that tenants could effectively deal with the legal notices that would not require them to miss work for long stretches of time and hire lawyers. "Our attempts to sit down with Pinnacle have not borne fruit, however," said Stringer. "
A federal lawsuit will be a dose of reality and give them a taste of their own medicine."The suit alleges that Pinnacle has broken federal racketeering laws by utilizing the mail and electronic means to send fraudulent requests for rent; that the landlord has misrepresented the minimum amount of rent due; and that Pinnacle has made false statements about repairs that were made, said the lead counsel on the case, Richard Levy, whose firm is representing tenants in the action pro bono after being contacted by Gotbaum. In statements to the press, Levy characterized Pinnacle's actions as tantamount to a "scheme" to defraud tenants on a grand scale. He also said that Pinnacle has allegedly engaged in "a general practice of deceiving the tenants for the purposes of getting people out of rent control, getting people to the point where the [apartments] could be converted to condominiums."
Ken Fisher, a spokesperson and legal representative for Pinnacle, said they had not even received a copy of the filing when the public announcement of the lawsuit was made. "The lawsuit appears to have been instigated by a woman whose mother was arrested for vandalizing an elevator in an Pinnacle building and with whom we are currently in litigation," said Fisher, referring to one of the plaintiffs, Kim Powell, whose mother allegedly vandalized an elevator on Pinnacle property."We are confident that this lawsuit, which was released to the press before being served on us, will be found to be without merit," said Fisher. He also noted that his office and Pinnacle had been in negotiations with Kim Powell and her lawyers, and that the last he knew, his firm had sent a proposal over to Powell's lawyer's offices two weeks ago."We thought we had provided a reasonable basis for solving the legitimate issues, and they filed a lawsuit without telling us that those discussions had ended," he added.
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