Downtown BK Landlords Owe $3M In Tax And Wage Violations, AG Says

DOWNTOWN, BROOKLYN — Developers and landlords of a Downtown Brooklyn building who said they'd pay workers higher wages to get a tax break and then still underpaid their staff will need to pay more than $3 million for the fraud, the attorney general announced Friday.

Brooklyn Warehouse and Mica Gabe, who own the 10-story luxury building on Nassau Street, applied for a New York tax program in 2014 that requires rent-stabilized buildings to pay workers a "prevailing wage" in exchange for a tax break.

But instead, the owners got their tax break and still paid workers hundreds of thousands less than they were supposed to under the law, an investigation by city and state officials revealed.

They will now have to pay $415,000 in back wages to their workers and $2.5 million in damages thanks to a settlement with the New York attorney general, New York City comptroller and a union who acted as whistleblower to the fraud.

“Not only did these landlords fraudulently enrich themselves and steal from taxpayers, but did so while underpaying their workers," Attorney General Letitia James said. "We are holding these defendants accountable and will continue to protect workers’ rights by making sure that developers and landlords who receive these specific tax incentives live up to their end of the bargain by paying workers what they’re owed.”

James' office said that Gabe applied for the tax program, known as the New York Real Property Tax Law, back in 2014 by assuring city housing officials that he would pay building employees the wages required under the program. The program gives tax breaks to certain buildings that either pay service employees the "prevailing wage" or set aside units as affordable.

But less than two weeks later, Gabe started hiring doormen, porters and a superintendent for the 180 Nassau St. complex, all at wages lower than required by the law.

The building owners paid a doorman $12 an hour instead of the required $17.58 and a superintendent $17.50 an hour instead of the required $24.26.

Brooklyn Warehouse did not immediately respond to a request for comment.

The settlement requires that the owners pay back the missing wages to their workers along with 16-percent interest. The $2.5. million in damages will go to the city and state.

The owners got away with underpaying the staff for nearly two years until the 32BJ SEIU union came forward to report it, officials said. The union will get a portion of the damages payment as a reward, James' office said.

“This is a huge victory, not only for the hardworking men and women who have kept Brooklyn Warehouse clean, safe, and functioning for tenants, but also for the families and communities that rely on them,” Kyle Bragg, president of 32BJ SEIU, said. "We hope this settlement serves as a warning to others in our city who would look to cut costs by undercutting workers.”