The Edelstein Family Has Been The Subject Of Multiple Enforcement Actions By The Attorney General’s Office Over The Last 30 Years
NEW YORK – Attorney General Letitia James today announced an investigation into Michael, Florence, and Ronald Edelstein regarding their alleged fraudulent business practices and the mismanagement of property related to Rockview Apartment Corporation, a 106-unit Manhattan cooperative of which they were collectively the sponsor. The court order requires the Edelsteins to testify and produce documents relating to their alleged actions, and prohibits them from interfering with the operations of the co-op’s independent board of directors while the investigation proceeds.
“For decades, the Edelstein family has attempted to bend the law to suit their own needs, while taking advantage of New Yorkers in the process,” said Attorney General Letitia James. “Property owners and management companies have an obligation to be forthcoming with their residents, and my office will continue to hold these entities accountable.”
The Office of the Attorney General (OAG) initiated the investigation after receiving complaints that the Edelsteins had retained voting control over the Rockview board of directors for more than 30 years despite previous representations that they were not in control. By secretly controlling the board for decades, the Edelsteins ensured that the co-op retained their own management company and that financial decisions were made to benefit themselves, rather than independent shareholders. The Attorney General also learned that Ronald Edelstein harassed the co-op’s shareholders by intimidating those who disagree with him, monitoring residents via closed-circuit cameras, and threatening to withhold repairs from some owners.
While a shareholder election last month voted the Edelsteins off the co-op’s board, the Attorney General has learned that the Edelsteins continue to interfere with the regular operations of the co-op.
The Court order is pursuant to General Business Law Section 354, a provision of New York’s Martin Act that confers broad power on the Attorney General to halt fraud in the selling or offering of real estate securities. The Court order specifically directs that the Edelsteins and other respondents may not interfere with the newly-elected board of directors, that Ronald Edelstein may not disturb any resident of the co-op in the quiet enjoyment of his or her home, have any involvement in the management of the co-op, and may not take any financial action on behalf of the co-op.
The OAG has previously issued enforcement actions against the Edelsteins, most recently in 2015, when OAG settled a lawsuit with Florence Edelstein over widespread violations of state oil spill prevention laws that govern the safe handling and storage of heating oil at residential properties.
The current matter is being handled by the Real Estate Finance Bureau’s Assistant Attorney General Nicholas J. Minella, Senior Enforcement Counsel Rachel Hannaford, Chief of Enforcement Louis Solomon, and Bureau Chief Brent Meltzer, under the supervision of Chief Deputy Attorney General for Social Justice Meghan Faux and First Deputy Attorney General Jennifer Levy.