District of Columbia Attorney General Brian L. Schwalb has filed a civil lawsuit against a family of landlords, claiming they are operating a “slumlord empire” built on a Ponzi scheme foundation.
Schwalb cited Ali “Sam” Razjooyan, his brother Eimon “Ray” Razjooyan, and their mother Houri Razjooyan for controlling more than 70 apartment buildings in Washington, DC; most of the buildings are rent-controlled.
In a press statement, Schwalb claimed the family ran a “Ponzi-like scheme [to] deceive lenders with fake financial documents and false promises to renovate the buildings and then rent them to tenants who receive housing subsidies that are reliably paid by District government and that are above the rent-stabilized amounts. Instead of fixing up the properties, the Razjooyans use the loan proceeds to enrich themselves, pay off loans from previously purchased buildings, and buy new properties to perpetuate the scheme.”
The Razjooyans’ properties fell into disrepair, exposing tenants to substandard living conditions that included rodent and insect infestations, gas leaks, electrical hazards, mountains of trash, mold, and flooding. Schwalb added the Razjooyans defrauded municipal agencies of more than $16 million to date with false claims that the properties were habitable.
In his lawsuit, Schwalb alleged the Razjooyans have violated the District’s Consumer Protection Procedures Act, the District’s False Claims Act, and the federal RICO Act. Schwalb seeks to ban the family from operating residential rental properties in the District while secure restitution for their tenants and penalties and damages for the District.
“Today, we’re dismantling the Razjooyan slumlord empire,” said Schwalb. “DC has a serious housing affordability problem, and slumlords like the Razjooyans make things worse by decreasing the available housing supply and forcing tenants to live in horrific conditions. Their business model, by design, preys on tenants for profit — cheating banks, private lenders, and the DC government along the way. Instead of addressing each building individually, we’re attacking the very foundation of their illegal operation. As the District’s independent Attorney General, I am committed to using the law to put an end to such fraud and exploitation and to protect affordable housing in the District.”
