NY AG: Real estate fraudster caught in Rockland County affordable housing scam
A property owner and manager are being punished for their roles in a real estate scam in Rockland County, according to the attorney general.
During the course of a two-year investigation, the New York Attorney General’s office found that an affordable housing cooperative development in Spring Valley was in danger of foreclosure due to illegal misuse of co-op funds by Russell Mainardi and his girlfriend, who was acting as a property manager for the co-op.
The investigation found that in 2014, Mainardi convinced the former board president to hire him to assist the co-op with its finances but charged inflated rates. They say Mainardi misrepresented his experience and background, having never worked with a low-income co-op and hiding his felony conviction for mortgage fraud and tax evasion. He then installed his girlfriend into a position as a “no-show” property manager, double billing the co-op for the same management tasks allegedly performed by both of their entities. Mainardi also set up the board president so that he was paid a salary as the superintendent and did not have to pay any maintenance for his co-op unit, in violation of the co-op board rules.
Under an agreement with the state, Mainardi and his collaborators were ordered to pay $148,681 in restitution to the co-op and $250,000 in penalties. The agreement also requires Mainardi to vacate $696,647 in liens he had improperly placed against the property. It also forces his girlfriend to resign as property manager and permanently bans Mainardi from real estate development or financing activity in existing residential properties in New York.