{"id":3036,"date":"2026-06-26T18:42:23","date_gmt":"2026-06-26T18:42:23","guid":{"rendered":"https:\/\/metrotransitreview.com\/?p=3036"},"modified":"2026-06-26T18:42:23","modified_gmt":"2026-06-26T18:42:23","slug":"exclusive-how-a-bathroom-pipe-fiasco-led-to-allegations-of-financial-fraud-at-one-of-nycs-most-exclusive-co-ops","status":"publish","type":"post","link":"https:\/\/metrotransitreview.com\/?p=3036","title":{"rendered":"Exclusive | How a bathroom pipe fiasco led to allegations of financial fraud at one of NYC’s most exclusive co-ops"},"content":{"rendered":"
\n

It\u2019s a stinker.<\/p>\n

A fight over a bathroom waste pipe has exploded into allegations of putrid dealings at a storied Manhattan co-op.<\/p>\n

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When Angelo Chan and his husband Frederick Wertheim spent $5.2 million for their home in a fancy Fifth Avenue co-op in 2018 \u2014 where Martha Stewart owns a pied-\u00e0-terre \u2014 they envisioned having three luxurious bathrooms after renovating their 2,500-square-footunit.<\/p>\n

But for five years, they\u2019ve been making do with just one \u2014 all due to a lengthy impasse over the location of a bathroom pipe that has devolved into a vicious court battle, allegations of fraud, and kept the water to the couple\u2019s two other bathrooms turned off.<\/p>\n

While investigating the pipe issue \u2014 namely, the location of a new pipe to drain bathroom waste \u2014 their attorney claims to have discovered something far more smelly.<\/p>\n

Since 2020, the building \u2014 907 Fifth Ave. \u2014 has failed to produce audited financial documents, alleges a lawsuit filed in Manhattan Supreme Court earlier this month. <\/p>\n

The lawsuit further alleges that when pressed to produce the documents, it produced fakes \u2014 concealing the fact that the building was spending hundreds of thousands of dollars on legal fees over the bathroom battle.<\/p>\n

\u201cA lie is a lie,\u201d said Steven Sladkus, the lawyer who is representing Chan and Wertheim. He called the falsification of such documents \u201cone of the gravest injustices I\u2019ve ever had to deal with.\u201d<\/p>\n

On behalf of the corporation, the two men are suing the building\u2019s board of directors for fraud and breach of fiduciary duty. <\/p>\n

Their lawsuit seeks damages for breach of fiduciary duty as well as punitive damages, and retroactive accounting from Dec. 31, 2019, the last date for which audited financial records exist.<\/p>\n

\u201cWe have suffered a great deal, and what we have experienced in the last five years is just a symptom of much bigger, fundamental issues in relation to this co-op,\u201d said Chan.<\/p>\n

The co-op is known as one of the city\u2019s most exclusive. Constructed in 1916, it overlooks Central Park at the corner of East 72nd Street. <\/p>\n

Alongside Martha Stewart, the building was once home to the reclusive heiress Huguette Clark, who owned a floor and a half, with those spaces listing for $55 million after her 2011 death. Last year, the penthouse sold for $37.5 million.<\/p>\n

\u201cIt is a document forgery scheme carried out under the imprimatur of one of Manhattan\u2019s most storied residential cooperatives,\u201d the complaint alleges, and \u201cwas used to deceive shareholders, purchasers and lenders in millions of dollars of transactions \u2026 This action will expose, remedy and hold the wrongdoers accountable for that misconduct.\u201d<\/p>\n

The dispute began during the renovation of the Chan-Wertheim apartment. <\/p>\n

According to court papers in the first lawsuit, filed five years ago, a kitchen pipe \u201cwas penetrated with a fastener during installation of drywall,\u201d causing major water damage in the apartment downstairs, occupied by board member Andrew Crisses and his wife Abby. <\/p>\n

They have been residents since 2003, and several years later combined their unit with an adjacent one.<\/p>\n

After that, the parties began arguing over the location of a different pipe, this one draining bathroom waste.<\/p>\n

The bathroom pipe could be routed through the ceiling of the Crisses\u2019 unit downstairs, replacing the original pipe, which would require breaking into the Crisses\u2019 ceiling. Or it could be situated on the floor of the Chan-Wertheim unit upstairs, which would necessitate raising the floor of their L-shaped hallway, with a step up and a step down. For five years, the parties have remained at loggerheads.<\/p>\n

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Meanwhile, the water to two bathrooms in the Chan-Wertheim home remains off. The building is concerned about the risk of flooding from ancient, corroded pipes, and has over time been working on decommissioning the old pipes and upgrading its plumbing system, according to court papers filed in the first lawsuit.<\/p>\n

As the bitter bathroom battle raged on, Sladkus sought copies of the building\u2019s audited financial statements. Obtaining the documents took weeks, he told The Post.<\/p>\n

\u201cWe literally begged for copies,\u201d Sladkus said. \u201cIn order to know the financial status of the building, shareholders are entitled to receive copies, and it is normal corporate practice for co-ops and condos to prepare these statements every year.\u201d<\/p>\n

When the documents arrived, they allegedly contained \u201cglaring inconsistencies and oddities,\u201d according to the complaint, and \u201cfailed to disclose ongoing litigation.\u201d Though building insurance covered 45% of the legal fees, one line item for legal fees was blank.<\/p>\n

\u201cThe money spent on litigation wasn\u2019t being reported to current shareholders and prospective purchasers,\u201d Sladkus claimed. \u201cIt is hundreds of thousands of dollars.\u201d<\/p>\n

Numbers contained in the documents \u2014 which were headed with different versions of the accounting firm Marks Paneth\u2019s logo \u2014 also allegedly included lower maintenance income than reported in the building\u2019s budget documents. For three years, the building\u2019s income from monthly maintenance was listed as exactly the same, down to the dollar.<\/p>\n

The documents appeared to be fake, according to CBIZ, which bought Marks Paneth. \u201cMarks Paneth did not issue the reports,\u201d CBIZ\u2019s general counsel wrote in an email. \u201cThe reports appear to be fraudulent, with forged signatures and letterhead.\u201d<\/p>\n

\u201cIt was a stunning discovery when I realized the seriousness of the situation. It was not just cooking the books, but fabricating the documents and impersonation of an auditing firm,\u201d Chan claimed to The Post, referring to the documents bearing Marks Paneth\u2019s name.<\/p>\n

In a statement to The Post, a spokesperson for the co-op board wrote: \u201cThis lawsuit is a baseless stunt by plaintiffs and their counsel, who filed it despite knowing that its core allegations are false.<\/p>\n

\u201cIt is nothing more than sour grapes and the latest chapter in a years\u2011long pattern of meritless litigation by the same entitled individuals who are upset they have had to adhere to the same standards and requirements as other shareholders in the building and refuse to abide by the Board\u2019s directives concerning their alteration.\u201d<\/p>\n

\n<\/div>\n

The statement further says that the managing agent from Brown Harris Stevens was responsible for the documents in question.<\/p>\n

\u201cBefore this complaint was filed, the managing agent\u2019s general counsel made clear to the plaintiffs and their counsel that the co\u2011op board had no knowledge of or involvement in the issues now being alleged, and that any inconsistencies in the documents were solely the managing agent\u2019s doing and responsibility. <\/p>\n

\u201cWe will vigorously defend against this action and pursue all appropriate remedies against both the plaintiffs and their counsel for abusing the legal process.\u201d<\/p>\n

The management company, Brown Harris Stevens, declined to comment, as did the Crisses\u2019 lawyer.<\/p>\n

\u201cShareholders are entitled to know what the true financial position of a cooperative is,\u201d Chan said. \u201cWe want an injunction to prevent these board members from doing this again. We are basically whistleblowers here. I feel this is an attempt to silence and intimidate people who step up to call out an egregious wrongdoing.\u201d<\/p>\n

Read more Trump returns to scene of assassination attempt \u2014 and security looks virtually the same<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

When a couple bought a lavish spread at 907 Fifth Ave., they expected to have three bathrooms — but their attorney discovered something far more smelly.<\/p>\n","protected":false},"author":1,"featured_media":3035,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[53],"tags":[],"class_list":["post-3036","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate"],"yoast_head":"\nExclusive | How a bathroom pipe fiasco led to allegations of financial fraud at one of NYC's most exclusive co-ops - Metro Transit Review<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/metrotransitreview.com\/?p=3036\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Exclusive | How a bathroom pipe fiasco led to allegations of financial fraud at one of NYC's most exclusive co-ops - 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