New York Attorney General Letitia James is turning up the heat on a pair of Brooklyn developers, accusing one of them of stonewalling a yearslong probe into a troubled condo conversion in Clinton Hill.
James’ office has asked a judge to compel Barry Leon, partner to developer Louis Greco, to comply with a subpoena tied to the conversion of 475 Washington Avenue, according to Bisnow. The state says Leon has ignored requests for documents and testimony since February 2024, despite multiple contacts with investigators.
The Office of the Attorney General is examining whether Leon and Greco mishandled funds and violated condo conversion rules at the six-story building, which they moved to convert into 60 units starting in 2018. Closings began in 2021, but regulators say required safeguards for buyers may have been sidestepped.
At the center of the case is a reserve fund meant for capital repairs. Instead of turning control over to the condo board, as required, Leon allegedly diverted those funds into his own businesses, according to a 2023 amendment to the offering plan cited by the state.
The probe also spans alleged failures to file disclosures, pay common charges and taxes on unsold units and maintain the building’s facade. Additionally, investigators are digging into whether the sponsors followed laws governing rent-regulated tenants and buyouts during the conversion.
The scrutiny lands on a project already under financial strain. The developers defaulted on a $35 million loan tied to the property, which ultimately went into foreclosure.
Leon’s broader track record is complicated. He has been named in more than 20 lawsuits and accused by family members in a separate case of withholding records and making fraudulent transfers. Court filings claim he has previously defied court orders and even served jail time for contempt.
Greco, a prolific developer with more than 100 projects to his name, has cooperated to a degree, providing testimony and some documents, though the AG says gaps remain. He filed for Chapter 11 bankruptcy last year.
If the court grants the AG’s petition, Leon would have 10 days to turn over records and 20 days to sit for questioning.
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