New York: The Homeless Industrial Complex

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Kris and Cheryl Gounden shown with their children. Photo: Nate Adams

[Housing Court Horrors]

A landlord says he's owed tens of thousands of dollars in unpaid rent after the City of New York stuck him with tenants and then refused to pay their bills.

In one case alone, the unpaid rent for one tenant is nearly $50,000. The landlord says he housed a tenant whom the City sent to him through the Section 8 program for four years. The City paid only about two years worth of rent and then tied him up in Housing Court, says the landlord.

"The City uses this as a deliberate ploy with small landlords," says Kris Gounden, of the Howard Beach section, of Queens. "The City sends tenants knowing at some point it will encourage the tenant to file a complaint so the City doesn't have to pay us rent even though it's already budgeted."

In the case of the tenant he housed for four years, says Gounden, a Housing Court judge finally awarded him $49,700 after two years in court, during which time he incurred costly legal fees and fines. To add insult to injury, he says, the city then asked him to collect on the judgment from the homeless woman who's now back in a city shelter.

"It's like a New York City Housing Mafia," says Gounden.

Meanwhile, the apartment itself was destroyed by the tenant and needs more than $10,000 worth of repairs on the walls, the floors, the kitchen, and the bathroom, says Gounden.

Gounden himself was in the news about six years ago when he bought a house for his family on Howard Beach and faced racist taunts and an attempted assault from a neighbor. Since that incident, Gounden who is a Guyanese immigrant of ethnic Indian ancestry has been trying to build a business managing two buildings he inherited from his father but says he faces endless harassment from some neighbors, and City agencies --including numerous tickets for what he says are concocted violations-- as a result of the incident when he first moved to the neighborhood. The racist attacks against the Gounden family attracted wide media coverage at the tme.

Gounden says because he stood up against closed-minded people when he first moved to Howard Beach, he angered some local politicians. He believes some of the predicaments he faces with his businesses today could be retaliatory targeting.

With respect to the $49,700 judgment he won this summer, Gounden says of the city, "They can't be serious, refusing to pay me after I won a judgment for two years worth of back rent on behalf of a client they sent to me."

Ana Garcia, the tenant whom Gounden says owed the rent, had moved with her six children into the four bedroom apartment at 486 Glenmore Avenue, in Brooklyn in 2007 having been sent by the Department of Homeless Services (DHS) under a program called Children Advantage/Fixed Income Advantage Program.

Gounden wanted $1,800 in rent but agreed to $1,481 when the city promised that after the first year's lease expired Garcia would be converted to a Section 8 tenant through the New York City Housing Authority (NYCHA) and the city would pay $1,900 rent, he says.  "After the first year it was all downhill and a nightmare," Gounden says.

In 2008 instead of converting Garcia to Section 8, DHS informed Gounden that the city had no money. "I was told if I initiated eviction proceedings Garcia would become eligible for a city program called  Eviction Prevention Program and become automatically qualified for rent payment from the city," Gounden says. The alternative was for Gounden to find another program for Garcia from non-profit organizations like ACORN, or CAMBA, both of which provide support for the homeless, he was told. "So now the city was freelancing its work to me and asking me to become a social worker without pay," he says.

Gounden says it took about two months and several court appearances, and attorney fees payment, before the city resumed paying Garcia's rent, under the Eviction Prevention Program (EPP). His legal cost was never refunded.

Even when the city halts rent payments on behalf of tenants like Garcia, it still makes money, Gounden claims. "The Department of Homeless Service collects thousands of dollars from the city, the state and federal government per tenant and only pays out a fraction," he says. "Let's say DHS collects $5,000 for rent payment for a person like Garcia and only pays me $1,481 or nothing at all, as in the case of those months before she became eligible for EPP, where does that money go?" Gounden says.

"Multiply this scenario times the thousands of homeless families and you now see how there's a whole homeless industrial complex. It's all one big scam," he adds.

The system keeps thousands of people employed, including social workers, judges, legal aid lawyers and court officers, Gounden says. "Everyone else except the homeless people the system is supposed to help make out well. The homeless and small landlords like me are just pawns. A lot of people live very well off the misery of homeless families," he says.

Even while the city had halted Garcia's rent payments DHS sent inspectors to the apartment without contacting Gounden. "The wrote up numerous violations on the apartment due to damages caused by the tenant. I'm supposed to do maintenance with money from my own pocket with no rent money," he says. "Small landlords, especially people of color, have no rights at all when dealing with the City when it comes to housing." 

To qualify for EPP, Garcia was required to apply for Section 8 housing; she did and was provided with Section 8 vouchers. But when the EPP expired, the city again informed Gounden that there was no money. "Section 8 tells me since Garcia had never received a single Section 8 payment, she was not a Section 8 tenant," he says. "So I had no choice but to initiate eviction proceedings against Garcia again."

Gounden and his attorney at the time, Stuart Jacobs, faced another legal aid attorney, Sarah Matheson, before Judge Maria Milin. The case lasted two years from 2010 until 2012.

After several court skirmishes, in July 2010, Matheson said the city was now willing to settle with Gounden for $7,000 as back payment of rent and to resume rent payment on behalf of Garcia at an even lower rate, $1,350.

"By now, I'm owed more than $20,000 and the city wants to pay about 30 cents on the dollar plus they want me to take less money than the first year's lease," he say. "I rejected the offer."

But the bills were piling up. Gounden was bleeding from non-payment of rent and having to pay legal fees and the city's fines for violations in the apartment. "I had no choice but to relent and accept the deal. Even then, the horror continued," he says.

Two months later, he still hadn't received the $7,000 and the city hadn't resumed rent payment. "So we have another court date. Just when you thought it couldn't get any more strange, now the legal aid attorney Matheson says the city has decided to sue me. The city now claims my rent had been too high in the first place. The city was suing me for overcharging even though I had not been paid rent going on two years now," Gounden says.

Gounden researched and learned that before the city could file an overcharging lawsuit in court it first needed to file a claim with a State agency called the Division of Housing and Community Renewal (DHCR), which would then make a ruling. DHCR told him the city had filed no such claim against his property. "Even though I told this to the judge, the trial was allowed to start," he says.

Instead of paying the back rent, the city was now asking for $25,000 in damages from Gounden for the alleged overcharging. The city also wanted Garcia to live rent-free for two years in the apartment.

According to court papers reviewed by The Black Star News, on December 15, 2010 the legal aid lawyer Matheson filed a motion to be relieved from the case.  Matheson withdrew her motion to be relieved of the case in January 2011, according to court papers.

During a routine review of the files in the clerk's office, Gounden and Posr Posr, a paralegal who has made a reputation for himself in New York helping people who represent themselves in court, discovered that crucial documents he submitted were missing. "The signed letter from Garcia stating that the apartment had been fully renovated before she moved in wasn't there," Gounden said. "The letter from my broker confirming the major renovation also wasn't there. I could see that I was being setup."

In 2011, Gounden made an even more stunning discovery.

Matheson, the legal aid lawyer, had taken a new job. She was now the law clerk for Judge Milin; the same judge who had been hearing the case. "I was shocked. But nothing in the New York court system surprises me anymore," Gounden says.

"I said to my attorney how can the judge write a decision against her own law clerk?" he says. When he asked his attorney to file a motion for Milin to recuse herself, his lawyer balked, he says. "My attorney said 'Well I gotta work with these people,'" Gounden says.

On June 30, 2011 Gounden filed a motion for Judge Milin to recuse herself from the case and also asking to terminate relations with his attorney Jacobs. Because "the court's law clerk currently represents the respondent," Gounden wrote, the  "impropriety of this potential conflict of interest is glaring."

By this time, Gounden says, Judge Milin knew of his intentions to file the motion. He served the motion on his attorney Jacobs at 2:56PM, he served the motion on Milin at 2:59PM, and he served the court at 3:30PM. Judge Milin signed papers recusing herself at 3:46PM.  "This needs to be investigated. The judge tried to make it appear as if my motion had nothing to do with her recusal. How could opposing counsel in a case before her be her law clerk at the same time?" Gounden says.

Indeed, Judge Milin's own papers which she signed says the "court sua sponte recuses itself from consideration of this case," meaning it was action taken by the judge without formal prompting from another party.

The case was transferred to another judge, Hanna Cohen. The director of the legal aid office in Brooklyn, Stephen Meyers, now stepped to represent the city. "They were doing damage control. One of their own lawyers had gone to work for a judge handling a case in the middle of the trial, while they were still both on the case," Gounden, says. "Even by New York standards this is a black eye for the court."

After Gounden fired Stuart as his attorney he hired a new one, Kevin Golden.

"Legal aid's defense, presented by Stephen Meyers, was that since the apartment had been vandalized, there should be no rent paid," Gounden continues. "This was their excuse for non-payment for two years, when in fact they had emptied my pocket and caused financial stress to me and my family," he adds, noting the toll on his wife Cheryl and their young children.

On December 23, 2011, Myers himself filed a motion which was granted by the court asking to be relieved from the case. "The circus continued. I hope New York taxpayers finally see how legal aid and the courts play games with their hard earned money," Gounden says.

Finally, Gounden was awarded the $49,700, in back payment for Garcia's rent. "After two years  this was a measure of justice," Gounden says.

He had rejoiced too soon.

Typically, when landlords win judgments they take the paperwork to the HRA's office  in the court building and they are quickly issued a check, Gounden says.

"When I went there with my judgment, the supervisor of the office told me 'that's not how it works.' He said 'payment is made based on who your lawyer is or whom you know,'" he says. "When I asked the judge and the city how to collect on the judgment I was told to collect the money from Garcia. I kid you not, I was told to collect $49,700 from a homeless woman. You tell me if this is not a horror movie or what?"

Meanwhile, Garcia moved back into a city shelter. But after she moved she still came back to the apartment. Since she was never legally evicted, Garcia and the city still had rights to the unit.

"The city pushes people into shelters for temporary stays. These shelters are owned by rich landlords who charge about three to four times more than we small land lords charge and they get paid immediately," Gounden says. "Those rich landlords who get this business don't look like you or me."

Gounden says he's still waiting for payment on the $49,700 judgment.

During the course of reporting this article, the following individuals didn't return messages seeking comment: Judge Maria Milin; Judge Hannah Cohen; Sarah Matheson; Stuart Jacobs; and Stephen Meyers.

Ana Garcia couldn't be reached.

Spokesperson for DHS and NYCHA also didn't return calls.


Editor's Note: This is first in a series that will examine the Homeless Industrial complex and Housing Court. If you have had similar experiences or know of other well documented cases contact or (646) 261-7566.



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