“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 buildings then fall into disrepair, forcing hundreds of the District’s most vulnerable tenants to live in horrific conditions, including rodent and insect infestations, gas leaks, electrical hazards, mountains of trash, mold, and flooding.”
Washington D.C. Attorney General Brian Schwalb has filed a landmark RICO lawsuit against an alleged “real estate fraud scheme” led by “slumlord” Ali Razjooyan, his brother Eimon, and their mother, Houri Razjooyan.
In a press release, Schwalb’s office said that the Razjooyan family operates a “vast, illegal real-estate empire that controls dozens of apartment buildings in DC.” Over the course of the past decade, the Razjooyans acquired at least 70 rent-controlled buildings. Many of these buildings are located in Southeast D.C.’s Wards 7 and 8, among the most impoverished sections of the city.
“Through a Ponzi-like scheme, the Razjooyans 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,” Schwalb’s office wrote. “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 buildings then fall into disrepair, forcing hundreds of the District’s most vulnerable tenants to live in horrific conditions, including rodent and insect infestations, gas leaks, electrical hazards, mountains of trash, mold, and flooding.”
“At the same time,” Schwalb said, “the Razjooyans are defrauding the District agencies that pay their tenants’ housing subsidies—more than $16 million to date—by falsely claiming that the properties are safe and habitable, a required condition for receiving the rent subsidies. By allowing so many apartments to become uninhabitable, the Razjooyans are decreasing the housing supply in DC and worsening the District’s affordable housing crisis.”
The lawsuit accuses the Razjooyan family of violating the federal Racketeer Influenced and Corrupt Organizations Act, often referred to its abbreviated form, RICO. The legislation was originally designed to dismantle New York City’s Italian-American Mafia families, which used a hierarchical structure that insulated high-ranking members from acts of violence committed by street-level enforcers. Under RICO, individuals who engage in racketeering can be prosecuted for acts committed by a criminal or corrupt organization, even if they themselves did not personally commit a crime.
Schwalb’s office notes that, in August 2024, it filed two lawsuits against Ali “Sam” Razjooyan for endangering tenants at two apartment complexes in Wards 7 and 8. Since then, the attorney general’s office has been involved in dozens of additional proceedings against the family.
The latest lawsuit accuses the family of violating D.C.’s Consumer Protection Procedures Act, its False Claims Act, and the federal RICO Act. It claims that the Razjooyans, among other things, misled lenders to secure loans by falsely promising to redevelop rent-controlled buildings; made quick cosmetic fixes to make units seems habitable; refinanced properties at grossly inflated values by lying to financial institutions; defrauded District taxpayers by submitting false documents; and allowed buildings under their care to fall into extreme disrepair, posing a significant risk to tenants and visitors.
Sources
Attorney General Schwalb Files RICO Lawsuit to Dismantle Razjooyan Slumlord Empire
DC attorney general goes after ‘slumlord empire’ with RICO lawsuit
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