A Rosedale office building with ties to a convicted felon notorious for his shady deals throughout the borough went for $24 million when it was sold through a bankruptcy-approved deal in January.
In the transaction brokered by Cushman and Wakefield, New Jersey-based Ivy Equities shelled out $24.25 million for the 230,000-square-foot Cross Island Plaza in Rosedale, a three-story office building with tenants such as Verizon and U.S. Citizenship and Immigration Services.
“On its face, given the location, this transaction had widespread appeal and attracted a great deal of attention. However, the offering was very complex,” Cushman Executive Vice President Gary Gabriel said. “The financial and leasing information was incomplete, and the legal process slowed the transaction process considerably as the auction date approached.”
The building’s seller, Block 12892 Realty Corp., was headed by Georgia Kontogiannis, whose husband, multimillionaire businessman Thomas Kontogiannis, was sentenced to nine years in prison after he pleaded guilty in 2010 for his role in a massive mortgage-fraud scheme.
Thomas Kontogiannis purchased and subdivided Edgewater Development in College Point and staged sales of the properties financed by mortgage loans. He directed others to concoct phony loan files to make it seem as if the properties were being purchased by qualified homeowners when, in fact, he was really selling the properties to family members and employees who were acting as straw buyers.
The mortgages were even backed by sham appraisals showing finished homes when the buildings were not even constructed or had phony addresses. Kontogiannis directed his conspirators to make the monthly payments on the mortgages so they would not become delinquent.
But the payments ceased in 2007 as Kontogiannis was embroiled in a scheme to launder bribes to California U.S. Rep. Randy Cunningham, a plot for which he was sentenced to more than eight years in prison in 2008.
As a result of Kontogiannis’ mortgage plot, CW Capital initiated a foreclosure action against Block 12892 Realty last year, and the company voluntarily filed for bankruptcy in an attempt to keep its assets together and attract the highest bidder possible.
In addition to his mortgage-scam bust Thomas Kontogiannis has had two other criminal convictions over the last 20 years.
He was arrested in 2000 for receiving more than $2 million in a scheme involving District 29 Superintendent Celestine Miller to rig bids for computer contracts for southeast Queens schools.
The charges against Kontogiannis and Miller were eventually reduced to misdemeanors after they agreed to return the money they made from the scam.
He was also arrested nearly 10 years earlier on charges of bribing a U.S. official to help acquire a visa for a Greek citizen, resulting in a $2,000 fine and five months’ probation.
Reach reporter Rich Bockmann by e-mail at firstname.lastname@example.org or by phone at 718-260-4574.
©2013 Community News Group
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