Class Action Lawsuit Exposes Housing Scam that Exploits Homeless

Tenants Facing Eviction to Hold Protest on Wednesday, Dec. 15

NEW YORK, DECEMBER 14, 2010 – Three companies that rent housing units to people leaving the shelter system, substance abuse programs and prisons are defendants in a class action lawsuit filed in Kings County Supreme Court by MFY Legal Services, Inc. and Patterson Belknap Webb & Tyler LLP, alleging that defendants engaged in widespread deceptive practices, pressured tenants into signing away their rights, violated the rent stabilization code and laws, and unlawfully evicted tenants onto the street when they became unprofitable.

RYB Realty, #1 Marketing Service, and Top of the Hob, Inc. have illegally converted several buildings into so-called “three-quarter houses,” promising to provide substance abuse counseling, social work services, referrals to vocational programs, and assistance obtaining permanent housing to formerly homeless adults and others with few to no housing options. Yury Baumblit, Rimma Baumblit and Elita Gershengorn are also named as defendants in the class action suit that was filed yesterday in Kings County Supreme Court.

Yury Baumblit, who was convicted of money laundering and a scheme to defraud in 2009, is attempting to illegally evict scores of tenants from two buildings in the Brownsville neighborhood of Brooklyn. He has ordered them out by December 15. Tenants and their supporters are holding a press conference and rally on Wed., December 15 at 1:00 pm at 42 Christopher Avenue, Brooklyn, NY, to demand an end to illegal evictions and harassment.

“These houses are masquerading as supportive housing programs but provide no services at all,” said Tanya Kessler, an attorney with MFY Legal Services, Inc., which brought the suit in conjunction with Patterson Belknap Webb & Tyler LLP, a private law firm that is providing pro bono legal help. Lisa E. Cleary, an attorney at Patterson, said, “instead of the services they were promised, people find themselves living in abject and overcrowded conditions, constantly subjected to harassment and threats, and living in fear of eviction.”

These companies are operating totally outside the law,” said Kessler, who has been advocating on behalf of three-quarter house residents for over a year. “The operators rake in thousands of dollars in city-financed rent payments each month while creating a revolving door of homelessness for people who are desperate for a place to live. It’s another example of the city’s failure to develop affordable housing for homeless people.”