Opinion ID: 770602
Heading Depth: 2
Heading Rank: 1

Heading: facts

Text: 6 In 1989 and 1990, Lurie was the sponsor, manager and majority shareholder of five cooperative apartment buildings in Queens County, New York. Among his wrongful acts as financial officer for the buildings, Lurie failed to make monthly payments on the mortgage; failed to pay for building maintenance, water, heating oil or taxes (with the exception of a $15,000 maintenance payment to himself); wrote checks to himself from the buildings' accounts in the amount of $435,000; ran up debts and obligations to the cooperatives that by October 1990 exceeded $1.8 million; and filed with the state an amendment to a real estate offering plan that contained materially false information. 7 The state concluded that these acts amounted to a knowing scheme to defraud current apartment owners and potential apartment buyers, and indicted Lurie. One group of violations--referenced as the maintenance counts--was based on Lurie's failure to disclose the buildings' parlous condition to minority shareholders, in violation of New York's General Business Law (the Martin Act) and various sections of New York's Penal Law. These shareholders (i.e., the apartment owners) continued to make maintenance payments presumably in reliance on the reasonable but mistaken belief that their payments were being applied to the upkeep of the buildings and the other corporate obligations of the cooperative. A second group of violations--referenced as the purchaser counts--arose from Lurie's failure to disclose the buildings' financial condition to potential buyers and actual purchasers, also in violation of the Martin Act and New York's Penal Law.