First-Of-Its-Kind Lawsuit Aims to Permanently Shut Down Sprawling Real Estate Fraud Scheme That Exploits Tenants, Lenders, and District Government & Worsens DC’s Affordable Housing Crisis

Attorney General Brian L. Schwalb today filed a first-of-its-kind civil lawsuit under the Racketeer Influenced and Corrupt Organizations Act (RICO) to dismantle an extensive real estate fraud scheme led by slumlord Ali “Sam” Razjooyan, his brother Eimon “Ray” Razjooyan, and their mother Houri Razjooyan.

The Office of the Attorney General (OAG) alleges that the Razjooyans are operating a vast, illegal real-estate empire that controls dozens of apartment buildings in DC. Over the past decade, the Razjooyans have acquired over 70 primarily rent-controlled buildings – 90% of them in Wards 7 and 8. 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. 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...

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