Managing agent charged in $950,000 Queens co-op scandal
by Dawn Lim
Jul 20, 2010 | 9113 views | 0 0 comments | 20 20 recommendations | email to a friend | print
The Berkeley Apartment Corporation in Rego Park, the hardest hit out of the five Queens apartments, lost $354,000.
The Berkeley Apartment Corporation in Rego Park, the hardest hit out of the five Queens apartments, lost $354,000.
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Most residents at 84-49 Owners Corporation trusted Michael Richter. The building manager had fixed garage doors, dealt with water bills, and kept their Queens cooperative spick-and-span for more than 10 years.

His corporate website boasted that his company Charter Management Realty “brings to the management of their buildings: Honesty, Integrity and Commitment. These are qualities not always seen in managing agents and rarely in tandem.”

The co-op board had worked closely with his family before Richter took over the business and renamed it.

But in March last year, board members at the Jamaica building on 168th street and 84th Avenue noticed that thousands of dollars in utility bills had not been paid. Accounting reports weren’t adding up. Word got around that other co-op boards in Queens were dropping Charter like the plague.

When the board fired Richter last May, it was too late.

Queens District Attorney Richard Brown announced on July 13 that Richter had embezzled nearly $950,000 in maintenance fees from five Queens apartment buildings over six years. 84-49 Owners Corporation had taken a hit of over $313,000.

Richter was charged in a Queens Criminal Court on five counts of second-degree grand larceny and five counts of first-degree falsifying business records.

“The defendant allegedly carried out his scheme like a Ponzi scam – co-mingling all of the funds into one account and hiding the thefts by paying the expenses of one client with the monies of other clients,” said Brown.

His “conduct represents a betrayal of the confidence that the boards of each building had in him,” he added.

In Berkeley Apartment Corporation, which lost the most – nearly $354,000 – the Rego Park residents want their money back.

Preston Forman, who has lived in the building for 14 years, said, “The situation here has been real interesting since news broke out. Many people are very angry.”

Another resident privately complained that Richter had also been brusque and “treated some of us real disrespectful.”

The co-op board had known that Richter was pooling together funds from various buildings for maintenance fees, but “didn’t appreciate the need to have a dedicated account because a lot of this decision was based on trust,” said the co-op’s attorney Eric Goidel.

Board president John Dereszewski described Richter’s actions as “terrible transgressions against our community” in a bulletin posted on a building billboard. Dereszewski would not comment further on the situation.

Abbey Goldstein, the attorney for Sherwood Village Co-op B, an Elmhurst apartment building that lost over $133,000 in the scandal, said that in his 30 years representing co-ops, this case is not an unusual one.

“In blue-collar areas, tenants are more likely they will rely on their ‘professionals,’ so to speak,” Goldstein said, “Usually, there is no problem with this. But when you assume honesty, there are instances where trust will be abused.”

In 2008, Charter was ordered to pay a Nassau County cooperative $353,000 for siphoning of their funds.

Richter’s lawyer Kevin Keating insisted, however, that Richter “doesn’t have a record.”

“We will continue to review the facts and circumstances of this matter and are hopeful of a resolution in the near future,” Keating said.

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