Home-Building Fiasco Adds To Smith’s Woes
As if State Senate President Pro Tempore Malcolm Smith didn’t have enough problems with federal and state probes into his non-profit, his Hurricane Katrina charity and his involvement with the failed Aqueduct Racino project, published reports say that the probe has now extended to his failed home-building business.
According to a story which broke in the Daily News on Sunday, Smith’s home building business was plagued by such problems as an “intentionallyset fire” and “numerous fraud accusations.”
The story, done by the paper’s crack investigation team led by reporter Barbara Ross, documented the fact that Smith owned several companies that pocketed thousands of dollars in down payments on homes that were never built.
Smith filed for bankruptcy in 2001 shortly after winning his State Senate seat, records show. Documents relating to that bankruptcy have been turned over to the Federal Bureau of Investigation as part of a probe into Smith’s dealings.
In April, for example, the feds reportedly probed why Smith paid an architect half of what he billed for a subdivision Smith was building. That architect then reportedly got other work on Smith-tied projects, many of them paid for by public funds.
That same architect, reports say, was involved with Smith in work for the Peninsula Preparatory Academy, a Rockaway charter school that Smith founded and that will soon be moving to the closed Stella Maris High School building on Beach 110 Street.
According to the Daily News report, one of the homes at issue was at 13-80 Dickens Street in Bayswater, where Smith promised Gloria Lee a madeover one-family home.
Lee reportedly paid Smith Development Corporation a $5,700 down-payment and $20,000 on her credit cards for the construction.
Although the home was promised for 1999, it has never been completed, and Lee has filed suit against Smith’s corporation.
Smith returned the down payment but retained the credit card money.
Four days after he paid the money, there was a fire in the Dickens Street home, which was reportedly “intentionally set,” according to fire department investigators.
Nine months after the fire, records show, Smith Development transferred the property to Smith himself at no cost.
The Daily News says that the bankruptcy referee charged Smith with hiding assets by transferring the property to himself.
The story in the News detailed a number of other housing frauds perpetrated by Smith’s corporation as well.
Smith’s office declined to comment to The Wave, but his lawyer told Daily News reporters, “The Daily News has spent a lot of time raking over the cold coals of litigation that is well more than a decade old. I am not going to dignify this unfair effort to smear Senator Smith by debating the merits of a controversy settled a long time ago.”