A Swindled Immigrant Community in Brooklyn Gets a Housing Reprieve

One man wanted to find a home for his aging parents to retire. One young woman’s mother wanted to raise her family there. Three families wanted their children to go to good schools.

The five-story building in Bay Ridge, Brooklyn, erected on the site of a former Lutheran church, seemed to be the right fit for Asian families with modest incomes — they watched the construction with anticipation in the tight-knit neighborhood with a thriving Asian community. The developer, Xi Hui Wu, was a local whom neighbors recognized from the bank and the grocery store, and his then-wife, Xiao Rong Yang, was known as a prominent real estate agent in the area.

For the next several years, tenants moved in and paid hundreds of thousands of dollars to buy their apartments. Then in 2018, each unit received a thick envelope in the mail. Inside was a foreclosure notice, and the tenants came to a horrifying realization: It was all a sham.

Promissory notes and handshakes were never going to turn into deeds. For years, Mr. Wu had failed to make payments to a lender. He owed millions of dollars to the bank. And he had never received authorization from the city to turn the building into condos.

That could have been the end — 20 different households, $5 million lost between them, evicted by a bank. Mr. Wu’s whereabouts have been hard to pin down, with conflicting information among tenants and government officials as to whether he fled to China or remains in Brooklyn. (Neither Mr. Wu, nor his lawyer listed in court records, could be reached for comment.)

But the tenants now stand to become homeowners when the building is eventually converted to co-ops, under a deal that will be announced at a news conference on Wednesday.

Asian Americans for Equality (AAFE), an advocacy organization for Asian Americans, bought the building through a process involving bankruptcy court and a deposit of over $1 million. The nonprofit is now offering residents a rent-to-own payment structure to claim ownership over their units, more than a decade deferred, at a price of $50,000, which was intentionally low.

“You don’t hear every day of somebody robbing their tenants and absconding to another country, never to be heard from again,” said Dina Levy, a senior vice president at Homes and Community Renewal, an agency of New York State government that has been working with the residents at Ovington for several years. “This is just miraculous.”

Chin How Tan, 49, who bought an apartment in the building for his parents, said his mother can now stay in the place she has known as home. “We’re grateful that we’re here, and not have to worry about losing the place tomorrow,” he said.

‘Local Celebrity’

More than a decade ago, Mr. Tan was among local residents watching the construction workers at 345 Ovington Avenue and asked to meet Mr. Wu. He liked the easy commute for his mother, now 81, to Brooklyn’s Chinatown, and he wanted both his parents to not have to worry about rent. (His father died last year.)

He made an initial down payment of $46,500 in 2013 to Mr. Wu, who told Mr. Tan and other residents of the building that the apartments were condos. In total, Mr. Tan paid Mr. Wu a down payment of $186,000 to secure the condo by 2014, and he took possession of the unit in 2015.

The tenants trusted Mr. Wu, who was “the local celebrity type” in the neighborhood, said Ed Cuccia, the tenants’ lawyer. Mr. Wu and Ms. Yang paid $1.5 million for 345 Ovington in 2011, according to property records.

Mr. Wu was so well-known and trusted, and the building’s construction such a spectacle, that he hardly had to search for tenants, according to Kris Chan, who was a teenager when she moved into the building with her family. The tenants came directly to him.

“He didn’t need to advertise at all,” said Ms. Chan, now 29. “His wife put a banner on the building,” she said, “and soon much of it was sold.”

According to the attorney general’s lawsuit, Ms. Yang shared the proceeds and also participated in the scheme, “serving as the collecting agent, bookkeeper, managing agent, and disbursing clerk for the payments” to Mr. Wu.

Mr. Wu and Ms. Yang divorced in 2020, court records show. Ms. Yang never held a real estate license under that name, according to the New York Department of State. When reached by phone on Tuesday, Ms. Yang declined to comment.

In 2013, one resident, Ya Hong Chen, made an initial down payment of $30,000 for the condo, and by 2015, she had paid $208,000 total, according to the initial lawsuit. However, any condo needs city authorization, and without that process, which Mr. Wu did not complete, selling units as condos is illegal, Mr. Cuccia said.

“It’s sort of like the equivalent of renting a car,” Mr. Cuccia said. “You go to a…