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Uncovering J-51 Fraud in NYC: Strategies and Solutions

Learn about J-51 fraud identification, apartment improvement fraud, and major capital improvement issues in NYC. Discover what the City/State can do to combat these longstanding problems.

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Uncovering J-51 Fraud in NYC: Strategies and Solutions

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  1. J-51

  2. Tax Program: $250 Million a Year

  3. Nearly 8 years later…

  4. How to Identify J-51 fraud Search: “NYC property select” in Google

  5. HRI has organized over 40 J-51 class actions

  6. Discussion: What can the City/State do about the longstanding problem of J-51 fraud and tax benefit fraud?

  7. Individual Apartment Improvements

  8. Individual Apartment Improvement Fraud Individual Apartment Improvements

  9. “DHCR does not attest to the truthfulness of the owner’s statements or the legality of the rents reported in this document.”

  10. Example rental history ~$100,000 individual apartment improvement claim

  11. New York State Audit

  12. Discussion: What can the City/State do about Individual Apartment Improvement fraud?

  13. Major Capital Improvements (MCIs)

  14. Major Capital Improvements • Building-wide improvements • Permanently increases the rents of rent stabilized units by up to 6% a year until the entire cost is paid off.

  15. Proof of Payment Actual Cost: j j Approved amount: j $500,000 $100,000 $500,000 Inflated/ returned: j $400,000 Shell Construction Company #1 $2700 $2500 $2300 $2100 $1900 $1700 $1500 $1300 $1100 $900 $700 Unit B Unit A Unit C

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