thieving coop and condo property manager pleads guilty

we were speaking of crooks…
A soon-to-be-former-NYS-senator was the foil for Friday’s post about a cynical lack of morality within the Manhattan real estate industrial complex (September 17, the (low) morals of the Real Estate Industrial Complex, politics division); today I will revisit a (now) convicted bad guy who has done some serious damage to many Manhattan coops and condos, including at least one loft building.

I started the story at the beginning of the middle, with my January 30, post, why hire a low-life as property manager? ‘cuz you didn’t know, after a NY Daily News article from January 24 about property manager Richard Bassik of Downtown Properties being accused of scamming his coop and condo clients. Later, my July 2, low-life property manager INDICTED, continued the story in the late middle, when Bassik was indicted, and quoted from the District Attorney’s press release about the charges.

As I said in the July 2 post, the January 30 post:

included the story of one Bassik-managed Manhattan loft building that had escaped without a financial problem (so far?) and talked about what coops and condos can do in these situations (after the fact, not much; before hand, a lot).

closer to the end
There I was, this past Thursday evening, learning that we are at at least the beginning of the end of the story … I had just finished reading The Real Deal’s Thursday night piece announcing that Bassik pleaded guilty on Thursday to 14 counts when I got an email from a shareholder at one of the victimized coops with the same news. I wonder to what extent the inter-tubes were humming Thursday night, passing along this news among Manhattan coop and condo owners and boards….

The overview of the guilty plea, from TRD:

Property manager Richard Bassik has pleaded guilty to 13 counts of grand larceny and one charge of scheming to defraud, the Manhattan district attorney’s office announced today. Through his company, Downtown Properties, Bassik stole upwards of $2.3 million from the 19 properties he managed, including several high-end co-ops and condominiums, cashing wrongfully issued checks and diverting funds from building bank accounts for his own personal use. The fraudulent activity took place between January 2005 and August 2006 ….

The middle of the end of the story will be when Bassik is sentenced on October 12. Apparently, the District Attorney’s office has told victims that the judge is likely to sentence Bassik to between 5 and 15 years in prison.

This sorry story won’t finally end for quite a while. I will need to deal with this in another post, but the story won’t end until the cascading effects of Bassik’s crimes get worked cleanly through the social fabric of the coops and condos that were victims. Here’s a preview: that rippling process will likely take years.

an (open) question of scale
Here is one troubling thing evident from the sources cited in my two prior posts: there are probably more victims, with more damage, than Bassik has pleaded to.

The January 24 Daily News article talked about 4 buildings that had lost "nearly $2mm"; the June 30 DA press release talked about $2.1mm stolen from 13 properties, between January 2005 and August 2009 (note that the TRD article says “January 2005 and August 2006”, a much shorter period; I haven’t seen the official document about the plea, so can’t tell if the right end date is 2006 or 2009). That is 9 additional victims and something more than $100,000 in additional losses discovered between January and June this year. The TRD piece last Thursday notes that Bassik “stole upwards of $2.3 million”, so the loss number grew another $200,000 or more since June.

Part of that increase is probably from the loft building that I mentioned in my January 30 post, which turns out not to have “escaped unscathed”, as they first thought. They filed a Victim Impact Statement stating that they had documented more than $30,000 in losses … and suspected that there was more that they had not uncovered. I suspect that this is true of other Bassik-managed buildings as well; there are probably some who do not know they were victims, and probably others that suspect they lost more than they can know prove. The DA worked from numbers that could be proven in court; who knows what the real numbers are?

back to the late middle of the story
My July 2 post contained this bit of advice that is useful enough (and short enough) to repeat:

The things that coop and condo boards can do to protect their fellow owners are simple, limited, and effective:

• pay attention
  
• require multiple signatures for non-trivial checks, including a board member signature
  
• check your property manager’s bond and insurance limits, and compare those limits to the amount of money they manage
  
• create a culture in which detailed scrutiny by the board is perceived as professional and a sign of good management instead of a sign of suspicion
  
• and (first, last, and not least) … pay attention

I won’t repeat the useful story about (Not) Out-running The Bear (too long for a too-long post), but that is there, too.

Manhattan Loft Guy note to self: write about how that rippling effect may cause lots of problems between coop shareholders / condo owners and boards, and among shareholders and owners. Soon.

© Sandy Mattingly 2010