The New York attorney general's office is turning up the heat on a Brooklyn condo sponsor, asking a court to force the developer to hand over records and testify in a probe tied to a Clinton Hill conversion. The petition zeroes in on Barry Leon, a partner of developer Louis Greco, and on claims that money earmarked for capital repairs was funneled into businesses controlled by the sponsors. It is the latest chapter in a long-running saga of lawsuits, missed payments and a loan default that helped nudge the six-story building toward foreclosure.
AG Asks Court To Compel Sponsor
State attorneys have petitioned a judge to compel Leon to comply with a subpoena tied to the conversion at 475 Washington Avenue, according to Bisnow. The filing states that Leon was served with an initial subpoena on Feb. 1, 2024, but has not produced the requested bank statements, invoices and communications. The outlet reports that the AG's office has repeatedly pressed for documents and testimony and says it still has not received full cooperation.
Allegations Focus On Reserve Fund
The investigation centers on a reserve account that sponsors are required to turn over to a condo board. An amendment to the building’s offering plan alleges that Leon redirected that reserve money into his own companies, according to The Real Deal. The AG is also looking at whether the sponsors skipped required disclosures, failed to pay common charges and taxes on unsold units, or mishandled buyouts of rent-regulated tenants. Buyers began closing on apartments at the six-story conversion after an offering plan first filed in 2018, with closings kicking off in 2021, the outlet reports.
Loan Default And Foreclosure
The financial backdrop has not helped. The sponsor defaulted on a loan tied to the property, prompting the lender to pursue foreclosure, according to court filings reviewed by PincusCo. That pre-foreclosure action cites an outstanding balance of about $34.9 million and identifies sponsor entities connected to Leon and Greco. The financing collapse has fueled buyer lawsuits and left residents unsure who actually controls the repair funds and how common charges will be covered.
What A Court Order Could Force
If the judge signs off on the AG's petition, Leon would have 10 days to turn over the requested documents and 20 days to sit for questioning, according to court papers cited by Bisnow. Prosecutors are seeking bank statements, invoices and communications involving Greco and other project managers that they say could show whether the conversion followed state rules. The petition is the AG's first public signal that the Clinton Hill project is under active investigation.
Developers Have Tangled Histories
Greco has cooperated to varying degrees, providing sworn testimony and some documents, but his businesses have wrestled with lawsuits and creditors, and he filed for Chapter 11 protection last year, according to The Real Deal. Leon has been named in more than 20 lawsuits, and in separate filings, family members have accused him of holding back records and making fraudulent transfers. With deadlines potentially looming, buyers, tenants and lenders are watching the court closely for answers on who ultimately controls the building's money and its future repairs.
