One man wanted to find a home for his aging parents to retire. One young woman’s mother wanted to raise her family there. Three families wanted their children to go to good schools.
The five-story building in Bay Ridge, Brooklyn, erected on the site of a former Lutheran church, seemed to be the right fit for Asian families with modest incomes — they watched the construction with anticipation in the tight-knit neighborhood with a thriving Asian community. The developer, Xi Hui Wu, was a local whom neighbors recognized from the bank and the grocery store, and his then-wife, Xiao Rong Yang, was known as a prominent real estate agent in the area.
For the next several years, tenants moved in and paid hundreds of thousands of dollars to buy their apartments. Then in 2018, each unit received a thick envelope in the mail. Inside was a foreclosure notice, and the tenants came to a horrifying realization: It was all a sham.
Promissory notes and handshakes were never going to turn into deeds. For years, Mr. Wu had failed to make payments to a lender. He owed millions of dollars to the bank. And he had never received authorization from the city to turn the building into condos.
That could have been the end — 20 different households, $5 million lost between them, evicted by a bank. Mr. Wu’s whereabouts have been hard to pin down, with conflicting information among tenants and government officials as to whether he fled to China or remains in Brooklyn. (Neither Mr. Wu, nor his lawyer listed in court records, could be reached for comment.)
But the tenants now stand to become homeowners when the building is eventually converted to co-ops, under a deal that will be announced at a news conference on Wednesday.
The Asian American Equality Fund (AAFE), an advocacy organization for Asian Americans, bought the building through a process involving bankruptcy court and a deposit of over $1 million. The nonprofit is now offering residents a rent-to-own payment structure to claim ownership over their units, more than a decade deferred, at a price of $50,000, which was intentionally low.
“You don’t hear every day of somebody robbing their tenants and absconding to another country, never to be heard from again,” said Dina Levy, a senior vice president at Homes and Community Renewal, an agency of New York State government that has been working with the residents at Ovington for several years. “This is just miraculous.”
Chin How Tan, 49, who bought an apartment in the building for his parents, said his mother can now stay in the place she has known as home. “We’re grateful that we’re here, and not have to worry about losing the place tomorrow,” he said.
‘Local Celebrity’
More than a decade ago, Mr. Tan was among local residents watching the construction workers at 345 Ovington Avenue and asked to meet Mr. Wu. He liked the easy commute for his mother, now 81, to Brooklyn’s Chinatown, and he wanted both his parents to not have to worry about rent. (His father died last year.)
He made an initial down payment of $46,500 in 2013 to Mr. Wu, who told Mr. Tan and other residents of the building that the apartments were condos. In total, Mr. Tan paid Mr. Wu a down payment of $186,000 to secure the condo by 2014, and he took possession of the unit in 2015.
The tenants trusted Mr. Wu, who was “the local celebrity type” in the neighborhood, said Ed Cuccia, the tenants’ lawyer. Mr. Wu and Ms. Yang paid $1.5 million for 345 Ovington in 2011, according to property records.
Mr. Wu was so well-known and trusted, and the building’s construction such a spectacle, that he hardly had to search for tenants, according to Kris Chan, who was a teenager when she moved into the building with her family. The tenants came directly to him.
“He didn’t need to advertise at all,” said Ms. Chan, now 29. “His wife put a banner on the building,” she said, “and soon much of it was sold.”
According to the attorney general’s lawsuit, Ms. Yang shared the proceeds and also participated in the scheme, “serving as the collecting agent, bookkeeper, managing agent, and disbursing clerk for the payments” to Mr. Wu.
Mr. Wu and Ms. Yang divorced in 2020, court records show. Ms. Yang never held a real estate license under that name, according to the New York Department of State. When reached by phone on Tuesday, Ms. Yang declined to comment.
In 2013, one resident, Ya Hong Chen, made an initial down payment of $30,000 for the condo, and by 2015, she had paid $208,000 total, according to the initial lawsuit. However, any condo needs city authorization, and without that process, which Mr. Wu did not complete, selling units as condos is illegal, Mr. Cuccia said.
“It’s sort of like the equivalent of renting a car,” Mr. Cuccia said. “You go to a car rental agency, and the car rental agency has the authority to rent cars to you, but instead they just sell you cars.” Mr. Tan described a similar runaround: Every other month, he would ask Mr. Wu for an update on the paperwork to finish closing the deal, but Mr. Wu kept pushing it off, saying it would be done soon. Residents, including Chun Po Kwok and Jian Li Chen, also told lawyers they were duped.
According to the attorney general’s office, Mr. Wu pocketed the payments from the tenants, using them for construction and to pay off the building’s loans. In 2018, Mr. Wu’s lender, from whom he borrowed $5.8 million, started to foreclose on the building, the attorney general’s office said.
Ms. Chan remembers the day the foreclosure notice arrived all too well. As soon as she received the notice, she knew immediately that she and her family had been swindled by Mr. Wu.
Her mother wanted to raise her three children in the condo and had saved up a significant sum of money to do so. According to the lawsuit, Ms. Chan’s mother made an initial down payment of $100,000 over the course of two months in 2013, and in 2015, she paid an additional $100,000.
Ms. Chan remembers that her mother trusted Mr. Wu so much that she went to his home, a handsome single-family unit just a few blocks from Ovington, to sign the paperwork. She sat in his living room. “For Asian people, if you invite us to your home, this is trust,” she said.
Because there were never any lawyers, banks or title companies, no one sounded an alarm, Mr. Cuccia said. The tenants had handed over money, often the result of decades of careful saving, on the assurance of nothing more than Mr. Wu’s word.
“Every time I mention this, I want to cry,” said Ms. Chan. “Because I was pretty much taking care of the whole building when I was a freshman in college.”
‘Our Only Hope’
One of only a handful of tenants in the building with fluent English, Ms. Chan took on a leadership role. At 345 Ovington, there was no superintendent before, so neighbors would contribute to pay for maintenance, looking out for each other as needed.
Ms. Chan started looking for lawyers, but the lawyers either thought the case would be too time consuming or that the proper purchasing process wasn’t followed, she said. Another challenge was getting all of the tenants in 20 different units on board. Then, in 2019, they found Mr. Cuccia, and 18 out of the 20 units got involved.
The tenants filed individual lawsuits in 2019. The court proceedings became increasingly delayed because of the pandemic. However, as the months ticked on, 345 Ovington’s mortgage kept accruing interest and penalties.
With the foreclosure imminent, Mr. Cuccia coordinated a news conference in 2022 to call on local officials to stop the foreclosure. The building was put into involuntary bankruptcy, a process that puts a creditor into bankruptcy, which froze it, Mr. Cuccia said. The tenants won their individual lawsuits, which ultimately allowed them to become creditors in the bankruptcy, he said. Letitia James, the state attorney general, filed a separate lawsuit in 2022 against Mr. Wu seeking to recover the stolen money, which totaled more than $5 million, according to Ms. James’s office.
“Everyone that touched this realized that this is a terrible, terrible tragedy if we let these people get thrown out of their homes and lose everything,” Mr. Cuccia said. “And we didn’t.”
The last-ditch effort to allow the tenants to stay paid off with the help of AAFE, a nonprofit supporting Asian Americans that also operates affordable housing.
“Our intent was to kind of restore some semblance of the American dream for these folks that got defrauded,” said Thomas Yu, AAFE’s executive director. The attorney general’s office and HCR, the affordable housing agency in New York state, initially reached out to Mr. Yu and AAFE for assistance at the end of 2022, and they got involved early in 2023.
Some tenants were initially skeptical of Mr. Yu, especially after their trust had been broken so many times. But Ms. Chan said she trusted him — there was no other option.
“We were helpless,” she said. “And I think they are our only hope.”
AAFE purchased the mortgage from the previous lender, which means they now own the building. To do so, the nonprofit had to put up an over $1 million deposit of earnest money to lock in the purchase, or the bank could have continued foreclosure. On May 23, the purchase was finalized in bankruptcy court.
The nonprofit is still awaiting government funding for building rehabilitation and kick-starting the conversion from rentals to co-ops, Mr. Yu said. That conversion will take about a year and a half to two years, and then, the tenants will own the building.
The fight to stay in their homes might be over. Zhang Jiang Lin said his hair turned gray. Now that he can stay in his home, on which he made a down payment of $200,000, Mr. Lin plans to retire at 345 Ovington.
Ms. Chan knows this outcome is rare and that the work is far from over, but she attributed their success to a common denominator: their Asian identity. United by all wanting to own a home and their Chinese background, Ms. Chan said, their voice became even louder. All the tenants could have been strangers, she said, but everything that has happened over the years ultimately brought them together.
“We all treat here, the building, as a home,” Ms. Chan said. “And now I’m glad that nobody can take it away from us.”
Debra Kamin contributed reporting. Susan C. Beachy contributed research.