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October 15, 2019Cart

Business

by Westchester County Business Journal
by WCBJ

Developer accuses Mount Vernon councilman and another partner of stealing

Councilman André Wallace

A Queens developer who invested in a hotel project in Mount Vernon says he was ripped off by his partners, including Mount Vernon Councilman André Wallace.

Andy Bassaly sued Wallace and Marc Cox, a New Rochelle real estate investor, for $140,000 on Aug. 1 in Westchester Supreme Court.

“Everything with regard to the partnership went wrong,” Bassaly said in the complaint, adding that his co-investors “used the partnership as a personal piggy bank to enrich themselves at the expense of the partnership.”

Wallace, who was elected to the city council nine months after the partnership was formed, responded in a telephone interview that he bought out his partners and gave the check to Cox.

“This is really between Bassaly and Cox,” Wallace said. “I’m an easy target. You throw my name in there because I’m an elected official because you believe it will help your case.”

The partnership got started in early 2015, when Wallace bought 30 E. 1st St. for $295,000. The three-story commercial building is next to Wallace’s Creative Direction Construction & Design LLC.

Wallace said a friend introduced him to Cox, founder of Diamond Back Properties LLC in New Rochelle.

“I wanted to purchase it to rent it out,” Wallace said. “The hotel was Marc’s idea. It was just a dream nonsense thing of Marc or others.”

He said Cox brought in Bassaly, a principal in a 40-year-old development firm based in Bayside, Queens.

A few weeks after Wallace announced his candidacy for city council in April 2015, he formed 30 on First LLC to own the E. 1st Street property. He transferred two-thirds of his interest in the property to Bassaly and Cox for $l00,000 each.

Bassaly decided after a few months that he was no longer interested in the hotel project, the complaint stated, and asked to be bought out. He claimed Wallace told him he would be repaid when the property was refinanced.

Although the property was refinanced for $234,500 in March 2016, none of the money was given to Bassaly. Instead, the complaint stated, the entire amount went to Cox’s Diamond Back Properties and was used to buy property in Hempstead.

Then last year, Bassaly said in an affidavit, Cox orchestrated a refinancing of the 1st Street property again for $360,000, netting about $120,000. None of that money was paid to Bassaly, as well.

In the affidavit, Bassaly claimed Cox and Wallace “have stolen the portion of the net proceeds” owed to him.

Bassaly accused Cox and Wallace of waste of corporate assets, unjust enrichment, conversion, breach of fiduciary duty and breach of contract. He was in court on Tuesday asking for a receiver to be appointed to collect rents from the tenants and to preclude Cox or Wallace from selling or encumbering the property.

Wallace said he rents the building to four tenants, but he eventually wants to use the space to expand a construction trades school he operates.

As for Cox, Wallace said, “I don’t know where he’s at.”

Attempts to reach Cox by email and telephone failed. In 2016, he formed Mioym Equities Inc., a firm that, according to its website, specializes in reconstruction of single-family homes. Mioym lists its address as 32 E. 1st St. in Mount Vernon, the same building that Wallace owns but is more commonly known as 30 E. 1st St.

Wallace said Mioym is not one of his tenants and he has never seen any mail coming to Cox at that building.

“If he is using my address,” Wallace said, “he’s committing another case of fraud.”