D.C. Attorney General Brian Schwalb’s office filed a lawsuit Thursday morning against a landlord it alleges has made a business out of defrauding lenders and the D.C. government — while leaving its hundreds of apartments in the District in squalor.

The AG’s office filed the civil suit in the D.C. Superior Court against defendants Ali “Sam” Razjooyan and his associates, Eimon Razjooyan and Houri Razjooyan.

The suit says the trio operate a “criminal enterprise” and seeks to prohibit them from doing business in the city. It also seeks restitution for the tenants, as well as damages and civil penalties.

Sam Razjooyan provided a written response to Bisnow saying he strongly disagrees with the allegations. He said the AG’s claims haven’t yet been proven and should be decided in a courtroom rather than in the press.

“The Office of the Attorney General has suggested that this action is about protecting District residents,” Razjooyan said. “In reality, its approach has imposed substantial costs on property owners and the housing system without producing meaningful solutions. Enforcement actions that prioritize publicity over process ultimately burden the very residents they claim to protect.”

“I will address these allegations in court, where they belong,” he added. “When the full record is developed and the evidence is tested, I am confident it will demonstrate that the accusations do not reflect the facts.”

Schwalb’s office alleges the Razjooyan enterprise has operated a “Ponzi-like scheme” that starts with buying distressed apartment buildings that are still habitable. It then allegedly obtains financing by telling lenders it plans to renovate them and completes some nominal improvements before allowing the properties to fall into disrepair while pocketing the renovation loans — and using them to buy more properties.

Click here for full story from Bisnow