Slumlords Unload 9 Properties

After milking properties for years while stiffing banks and failing inspections, Janet Dawson and Michael Steinbach have unloaded a small chunk of their rental-house empire. Local property-flipper Wade Beecher (pictured) got his hands on four of them, on behalf of some well-heeled ​“Venezuelan friends.”

That is the latest twist in the saga of the Dawson-Steinbach empire, which includes hundreds of properties in poor city neighborhoods, many of them criticized by city inspectors as under code and many of them nevertheless receiving federal Section 8 rent subsidies.

The properties include 227 Clinton Ave. in Fair Haven, where tenant Delwanna Wiggins was injured when the bathroom ceiling in her second-floor apartment caved in on her two years ago. She’s still waiting to get the $30,000 judgment she was awarded in court; read more about that here. The change in ownership of her apartment won’t make that process any easier, her lawyer said. 

Beecher wouldn’t comment on the practices of the Dawson/Steinbach team. He said he plans to fix up all the houses and make sure they’re up to standards. (Wiggins’ apartment is paid for largely by the government’s Section 8 rental assistance program. It failed its most recent health inspection).

“I have a reputation to keep,” said Beecher as he sat on the steps of the Fair Haven house. ​“That’s why my hands are dirty and calloused.”

A known property-flipper in town, Beecher uses ​“hard money” to buy up bunches of cheap houses, fix them up, and then unload them at a profit.

That’s not what he’s doing in this case, however, he said. He’s acting on behalf of other investors.

Beecher buys many properties under his own name and limited liability corporations he’s created, such as Wades Housing LLC. With the newly transferred Dawson/Steinbach houses, though, he’s not the owner. He’ll fix up the properties, collect the rents, deliver them to the owners and take a percentage, he said. He wouldn’t say how much.

Beecher’s quest for Dawson/Steinbach properties started more than a year ago when he called his ​“buddy” Dave Zamary, an employee of First County Bank. First County Bank is a major lender for Beecher, as well as for Dawson and Steinbach.

“I called Dave up and I said, ​‘What have you got for foreclosures?’” Beecher recalled. ​“He says, ​‘Well, we’re working on this Apple Management stuff.’”

Zamary was talking about nine properties embroiled in dragged-out foreclosure lawsuits by the bank against Dawson and Steinbach (whose corporate aliases have varied from Betty Boo LLC to Apple Management LLC to Apple Holdings LLC). Would Beecher like to buy the mortgage notes? he asked.

“Rather than fully foreclose, [the bank] said ​‘Have somebody buy the notes,’” Beecher said. ​“But I don’t have deep enough pockets.”

“Elite” Steps In

So Elite Property Investments LLC bought the package of mortgage notes instead. It was that company, registered to a man named Leonard C. Goldberg in North Haven, that finally foreclosed on the properties this October.

After that, Beecher said, someone ​“called me and asked if I was interested in the package.” Beecher wouldn’t say who the caller was. He said he wanted all nine, but he said his staff ​“procrastinated” and managed to get four — all through different LLCs.

He couldn’t remember which LLC actually ended up buying 227 Clinton Ave. recently, because ​“there are so many different LLCs.” (LLCs enable investors to shield most of their assets from potential suits and often to shield their own involvement in transactions.) Records show the property was bought for $94,900 by Ziyad Holding Company LLC, which is registered in Miami Springs, Florida.

Beecher confirmed he is working with Ziyad, but he wouldn’t say who set up the company. ​“There are some things that are confidential,” he said. ​“We’re a group of investors…I’ve got to protect my guys.”

According to Florida records, Ziyad’s managing members are two people named Niurka and Yasser Mustafa.

Beecher referred to the investor group as ​“my Venezuelan friends.”

According to state corporate records, a man named Rafael Sanz is the principal member of Fides Real Estate Holdings LLC, a company registered in New London which also bought some other of the Dawson/Steinbach houses. Asked if Sanz is one of his ​“Venezuelan friends,” Beecher nodded.

Beecher said he plans on continuing to manage the three-family houses (which are at 227 Clinton Ave. and 176 Dover St., also in Fair Haven). The owners will be selling off the single- and two-family ones in a ​“fix-and-flip” transaction, he said.

The tenants on Clinton Avenue aren’t sure how they feel about that. Plus, they can’t figure out who actually owns the property.

“I don’t know who to pay rent to,” said Milicent Parker, Wiggins’ mother, who lives on the first floor of 227 Clinton. She said that during the summer she and her daughter got a visit from a man named Robert Letskus, a business partner of Elite Property Investments’ Leonard Goldberg, saying that ​“the bank might take the house.” (That was around the time when Elite Property Investments bought the package of mortgage notes from First County Bank, including the note for Parker’s home.)

They heard nothing after that until a couple of weeks ago, when Beecher showed up at their house on a Sunday night. He told them he plans to turn both their two-bedroom apartments into three-bedroom apartments and raise rents high enough that Section 8 money may no longer be able to help subsidize them.

That would mean Parker and her daughter would have to move out. Not a problem, once they can find the money for a security deposit, she said. ​“But he hasn’t told me when we’re supposed to move out. I don’t want to come home one day and get a letter that says I have 30 days.”

Parker and Wiggins showed a reporter a letter they received from J D’Amelia and Associates, a contractor with the state Department of Social Services that administers some 1,200 Section 8 vouchers in New Haven. (The Housing Authority of New Haven does another 3000). The letter, dated Nov. 15, indicated a change in rent receivership to ​“Platinum Associates Real Estate, LLC,” which is registered to Robert Letskus.

Beecher said property ownership was still being transferred this week and that Letskus was forwarding him the check. Letskus did not return the Independent’s calls made to the three phone numbers he gave to Parker when he visited her and Wiggins over the summer.

Milked

It’s been two years since First County Bank first filed a foreclosure lawsuit on the nine properties that recently changed hands. How did Steinbach and Dawson milk them before they lost them? Here’s the story of the three New Haven properties that finally ended up in the hands of manager Beecher. (The fourth is in West Haven.)

227 Clinton Ave.

Dawson bought this property for $146,000 in 2004. In October of 2008, she took out a mortgage on it for $186,900 from First County Bank.

A year later, in October 2009, the bank filed a lawsuit against Dawson, claiming she hadn’t paid the mortgage. (It did the same against Dawson and Steinbach for nine different properties they owned).

Two weeks after the lawsuit, Dawson and Steinbach quit-claimed all the houses to Apple Holdings, LLC, one of their many corporate aliases.

Those nine quit-claims are the only Apple Holdings transactions ever to show up on land records. The tactic is a common method used by landowners to stall lawsuits by creating a limited liability company that can file for bankruptcy, so that they don’t have to file for personal bankruptcy.

And that’s what happened in August 2010, when Apple Holdings filed for bankruptcy about a month before a judge served Dawson and Steinbach with nine foreclosure notices for all the properties.

The company listed $1.5 million in assets — consisting of all nine properties plus $1,000 cash on hand — and $2.8 million in liabilities.

First County Bank then found itself scrambling to figure out what to do.

In a petition to the bankruptcy court asking for a relief from stay, the bank called Apple Holdings ​“a shell corporation controlled by Steinbach and Dawson,” arguing that ​“the transfer of the properties in this case was part of a scheme to avoid of delay First County taking title to the properties.”

The court records include a rent roll sent by Steinbach and Dawson’s lawyer, William Carter. It indicated that Apple Holdings was getting $17,895 per month for all nine properties and $2,855 per month for the Clinton Avenue house.

Carter, who has a bankruptcy law firm in East Berlin, said bankruptcy was a legitimate defense for people looking to hold title to their properties and defended his clients, who are facing over 100 foreclosure and defective premises lawsuits in Connecticut.

“Apparently, whoever was originating in these mortgages for the last ten years were not playing above board,” he said. “[The banks are] inducing people to take second mortgages and to leverage their so-called equity on the property. Well, I’d call it phantom equity…There was no equity there. so then they’re stuck with this high-rate mortgage.”

He said his statement was a general one not specific to Dawson and Steinbach, ​“although I’m sure they fall into this category.”

The bank ended up releasing its certificates of foreclosure for all the houses in February of 2011 (even though a judge dismissed the bankruptcy case in March 2011). In June, it sold all the mortgage notes to Elite Property Investments and Elite took over the foreclosure lawsuits.

On the same day Elite bought the mortgage notes, it posted all of them as collateral for a $225,000 loan at 12.5 percent interest per year from a company called Highland Financial Associates, LLC, which is registered to Marc Olins in North Haven. A few months later, in October, Elite won a foreclosure judgment against Dawson and Steinbach for all the properties.

Elite Property Investments sold 227 Clinton to Ziyad Holding Company LLC for $94,900 at the end of October, according to land records.

How much did Dawson make off the property before losing it? If Dawson paid almost none of the $186,600 mortgage on a house she bought for $146,000 — as her lenders asserted in their foreclosure lawsuit — and then collected at least 36 months’ worth of rent for it, she made $142,780.

176 Dover St.

Dawson bought this property for $36,000 in 2000. She later took out a mortgage on the property for $187,600. It followed a similar pattern as the Clinton Avenue property, except that Elite sold it to two buyers — Ziyad Holding Company LLC and Fides Real Estate Partners LLC, whose principal managers are listed as Carmelo Foti and Sanz.

It’s unclear where Fides’ office is. On most land records involving the company, its address is listed as 59 Elm Street, Suite 200. But state business filings indicate it is located in New London. And in other land records, Sanz lists his address at 205 Church St. in New Haven.

How much money did Dawson make off this house? With the same assumptions as for 227 Clinton Ave., she made $151,600 off the difference between the sale price and the mortgage. Three years’ rent at $3,060 a month, according to rent rolls, comes out to $110,160. Add those two figures to get $261,760 — a very conservative estimate, given that she’s owned the property since 2000 and this figure assumes she only collected three years’ worth of rents.

617 Dixwell Ave.

In 2007, Dawson bought this property for $89,900 and took out a mortgage for $104,300. After it was foreclosed on by Elite Property Investments, it was sold to Fides Real Estate Partners for $46,500 in late October 2011. With rent rolls showing collection of $1,150 per month for the single-family home, she might have made a profit of about $55,800 assuming tenants lived there for three years.

Immediately following the sale, Fides Real Estate Partners granted the property and its rents and leases to Venetrust Investments LLC as collateral for a $51,700 loan. Why it did so is unclear, given that both Fides Real Estate Partners and Venetrust Investments list Sanz as a principal member.

Beecher said he doesn’t plan on managing 617 Dixwell Ave. for long. It’s a single-family and ​“single-families don’t make money,” he said. It’ll be back on the market soon.

Related Stories:

• Ceiling Fell. Baby Died. Slumlords Paid Nothing
• Slumlords Stiff Banks — & Rake In Sec. 8 Bucks
• One family moves in, another forced out
• Showpiece House Rises Next To Problem House