Is Slum Landlord Helping The FBI?

Marshall Asmar’s real estate empire was crumbling. City inspectors were trying to track him down. He owed lenders more than $10 million. Meanwhile, the FBI was onto a sprawling scam — and Asmar was in the middle of it.

Asmar was selling blighted homes in New Haven neighborhoods to a multicultural team of prominent people who, according to the FBI, were falsifying documents in order to steal millions of dollars from lenders — including government lenders — while leaving behind hovels.

The FBI last month arrested those prominent people, including a former state representative, a rabbi, a West Haven police commissioner and one-time ​“Irishman of the Year,” and an alleged ringleader who goes by ​“Ali” and ​“Asad.” Read about those arrests here.

The FBI did not arrest Marshall Asmar.

Nor did the dozens of court documents released by the feds in the ongoing investigation name Marshall Asmar.

Yet Asmar, while on the run from creditors and city building officials, played a key role in at least three transactions handled by major named figures in the investigation, in the Fair Haven and Newhallville neighborhoods.

That role could be potentially criminal, if the feds’ allegations about crooked real estate deals prove true and Asmar indeed signed documents that bear his signature.

What was Asmar up to? Is he one of the unnamed ​“cooperating witnesses” helping the feds in this case?

And what’s he up to now in the struggling New Haven neighborhoods where he continues to collect rents?

Reached on his cellphone, he was asked that question. He hung up twice.

“I’m kind of busy. I can’t talk right now,” he said the first time.

“Again I’m busy,” he said the next. ​“But thanks for the call.”

Buying & ​“Selling”

Land and court records, and visits to some of his properties, make it clear what Asmar, an unmarried 1988 graduate of Danbury High School, has been up to since 2000.

He’s been buying up property around the state, including houses in distressed New Haven neighborhoods. Land records show at least 19 purchases under his name in Newhallville, Fair Haven, Dixwell, West Rock, and the Hill. (He has also used at least two limited liability corporations in transactions.)

At least some of the properties were rundown. The city originally believed he could be a responsible landlord fixing up such properties, according to Frank D’Amore, deputy director of the Livable City Initiative (LCI), New Haven’s anti-blight agency. LCI sold him two blighted houses around five years ago, D’Amore said. ​“He did an OK job, but we had to stay on top of him. It took him forever.

“We had high hopes for him. Then we discovered he owned some other [neglected] properties, and it was downhill after that.”

At one point Asmar started putting on an addition to a house on Adeline Street without required city permission, according to LCI inspector Jim Turcio. ​“We shut it down. He never finished it.” By 2009 the house sat opened and abandoned, according to a city inspection. City Building Official Andy Rizzo sent Asmar an ​“unsafe notice.” The notice was mailed to an address in Danbury, his parents’ home. Asmar had elsewhere listed his residence as Ocean Avenue in West Haven and as Joanne Drive in Milford. Rizzo wrote that Asmar had left the Adeline property unsecured and open to the elements.

His own alleged residence at Ocean Avenue fell into similar condition. There’s a reason New Haven can’t track him down there: no one’s living there. The front porch is missing rails and planks (pictured). The inside is empty. A West Haven city inspector slapped an ​“unsafe” notice on a window there last week, warning people to stay away.

As problems developed at his properties, Asmar fell behind on his mortgage payments. Lenders initiated foreclosure proceedings on his properties, including a second house on Adeline Street. More than a dozen foreclosure suits against him are listed on the state Judicial Branch website.

This April 1, Asmar filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court on Church Street. He listed his assets at between $0 and $50,000. He listed his debts as between $10 million and $50 million, owed to between 100 and 194 creditors.

The listed creditors are largely banks and other lenders seeking to foreclose on mortgages on Asmar-owned multi-family properties not just in New Haven, but in Bridgeport, Stratford, and West Haven, as well as in New Orleans, Louisiana.

“People generally file bankruptcy to stop foreclosures,” said his attorney in the filing, Peter Ressler. Ressler said he couldn’t discuss the specifics of Asmar’s case without permission. The case is pending.

So is a criminal case. Milford police arrested Asmar June 3 on larceny and attempted larceny charges.

In the bankruptcy filing Asmar also claimed that he had no income from rental properties.

Tenants at two of his properties, one-family rentals in the Hill, said Asmar still collects their rent. They said he’s a good landlord. Their houses appear in solid condition.

“He fixes everything. When I call him, he does everything he’s supposed to do,” said Lucy Pagan, who lives with her four children in a three-bedroom house. She said the federal Section 8 program pays Asmar the $1,050 monthly rent.

“I don’t have complaints about him. Every time I call him, he comes” to make repairs, said Cameron Perez of Frank Street (pictured).

What’s His Role?

Asmar is not collecting rents these days on 211 Lloyd St. in Fair Haven. He ​“sold” that property, which is a mess. (Pictured: the basement.)

Asmar originally bought the house from Deutsche Bank, one of New Haven’s main owners of distressed properties, in 2008 for $16,000. He turned around and resold it in 2009 to a West Haven woman for $160,000.

The US. Attorney’s Office claims in an indictment released last month that that was a sham sale: The woman never really bought the property; she got paid cash to pretend she bought it. The multicultural team of alleged conspirators paid a lot less than claimed in the land records, then produced phony documents to pretend work was being done on the house and obtained a mortgage for nearly the full $160,000, according to the feds.

On these and other properties the conspirators divided up the profits from the mortgages, collected rent from tenants, let the properties fall into further disrepair, and stopped paying the mortgages, according to the federal indictment; the lenders eventually came in to foreclose.

The indictment doesn’t name Asmar — who allegedly signed documents claiming he received the phony price on this sale. The feds haven’t said whether the sellers in cases like this shared in the profits from these alleged mortgage fraud schemes, or whether they were just desperate to unload problem properties.

More importantly, as the investigation continues, feds have declined to say why they haven’t arrested or named the sellers, who presumably signed warranty deeds with false sale prices.

Asmar’s name shows up as the seller in land records for two other transactions involved players named in the indictment: 88 Hazel St. in Newhallville and 44 West St. in the Hill.

The records list Asmar as selling the West Street property on the same day — Oct. 1, 2009 — to the same alleged straw buyer as the Lloyd Street house. Both transactions were handled by the same former state legislator who had given up his law license and who, according to the federal indictment, was part of the fraud scheme. (He denies it.)

A group of people hanging out in front of the rundown West Street house one night these week said they hadn’t heard of Asmar or the straw buyer; one said he pays rent to a man from New York. (The group was visibly intoxicated and uninterested in talking.)

The federal indictment also describes an attempted fraudulent sale that fell through on Starr Street in Newhallville. Asmar is listed as that property’s owner too.

The Hazel Street sale in December 2008 was to a man from New London (where the alleged ringleader is based). The Hazel Street house (pictured at the top of the story) deteriorated for years, according to neighbors. Today, it’s abandoned and open to the elements, dragging down a block and a stretch of town wrestling with the effects of foreclosure. Rizzo, the city inspector, tried to reach Asmar about the property but failed. (Read about the Hazel Street house here.)

The federal indictment discusses the Hazel Street sale, too, again naming other key members but with no mention of Asmar.

It’s unlikely that the feds will charge Asmar with a crime if they haven’t already, said Jeffrey Meyer, a Quinnipiac University associate law professor who prosecuted white-collar criminal cases from 2000 – 2004 as a new Haven-based assistant U.S. attorney.

While he has no firsthand information about this case, Meyer said Asmar’s absence from documents released in the case ​“indicates some probability that he’s cooperating” with the authorities. Or else ​“that there’s a proof problem.”

Prosecutors might hesitate to bring criminal charges against ​“unsophisticated” parties to a scam — say, low-income people roped in to serve as a straw buyer in a sham sale. A jury might find them sympathetic, Meyer said.

As an experienced property-buyer with over $10 million worth of mortgages, Asmar would not qualify as ​“unsophisticated,” Meyer said. So he might appear less sympathetic to a jury if he was part of illegal shenanigans. At the same time, Meyer said, prosecutors sometimes find it a challenge to produce convincing evidence that every participant in an alleged scam had enough firsthand knowledge of a crime.

The sellers’ motives in these alleged scam sales remain an unanswered question as the case unfolds.

Officials spoke of desperate owners wanting to unload properties. In some cases the owners were distant lenders holding foreclosed-upon properties worth less than the debt.

However, a seller like Asmar would still be on the hook for the mortgages (hence his bankruptcy petition). Even if he knowingly signed a sales agreement that pretends he’s receiving more money than the true sales price, that wouldn’t decrease his mortgage debt.

And he’d be exposing himself to criminal charges.

Unless, perhaps, he was wearing a wire.

The feds’ indictment refers to at least two unnamed ​“cooperating witnesses.” At least one of them secretly taped conversations with the alleged scammers.

Did Asmar wear a wire? Or did he just stumble unknowingly into one of Connecticut’s real-estate scams of the decade, with no traces of improper behavior?

If the case goes to trial, the answer may become clear.