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P.O. Box 3436 Phoenix, Az. 85030

March 13, 1995

Representative Christopher Shays Chair, Human Resources and Inter-
Governmental Relations Subcommittee B-372 Rayburn House Office Building Washington D.C. 20515 Attn: Demi Greatorex
R: V&M Management Dear

Representative Shays:
I am writing as a result of an article in the Boston Globe which indicated that your subcommittee may be conducting hearings concerning the operation of the HUD low-income housing program
I represent V&M Management, the owner of a 275 unit low income apartment complex in Boston known as the Mandela Apartments. This complex constructed in a City of Boston urban renewal area in the early 1970's. Unlike many low income developments, this complex is privately owned and financed, and is not HUD insured. It is one hundred per cent subsidized under the Section 8 program.

My client purchased the complex in 1981. At the time of the purchase, the budget for the fifteen years of the Section 8 contract was set at $19,000,000, but the rent structure was set at levels substantially below comparable rents. The rents have remained below fair market since that time, and at present, according to the rent schedule published at 59 Fed. Reg. 4949 (September 28, 1994), my client is receiving approximately $27,000 a month less than it should be.
As a result of these years of shortages, my client has had to go into substantial debt beyond its private mortgage, and is now paying some loans with interest rates in excess of 20%. In order to alleviate the situation, my client has been requesting upward rent adjustments from the Boston HUD office for years, and has always been refused.

Two years ago, my client found a private commercial lender who would lend sufficient funds to restructure the entire debt on the condition that HUD would agree to
underwrite the loan through the 223 (f) program. This lender has made many such loans in the past, and assured my client that the loan was viable and financially sound. HUD denied the 223 (f) application on the grounds that the indebtedness was too high and the income too low to support the loan. We have now discovered that because of the years of underpayment of the rent, my client will have a projected $2.2 million budget surplus when the Section 8 contract expires in November, 1996. Nonetheless, Boston HUD still refuses to raise the rent to fair market value, or to commit a portion of this surplus to reduce the indebtedness or to make major capital repairs.
At the same time, my client, through its president, Alphonse Mourad, has been making major contributions to the well-being of the residents of that area of Boston. He pursued a petition with the Public Utilities Commission which eventually resulted in the reduction of interest and penalties on late payment charges. He provides space for and subsidizes a drop-in health screening and treatment center which receives no federal or state funding, but which has diagnosed and referred thousands of people with serious heart, lung, and diabetic disorders. He has sponsored a championship rowing crew for young black men, many of whom were unaware that there was a river two miles from where they lived. I cite these examples only to show that despite the severe financial problems faced by my client, it has provided important services to the community.

My client believes that it has been subjected to politically motivated discriminatory conduct on the part of HUD and the Boston-based Democratic Party, which has had a grip on the urban renewal process in Boston for years. I am sure that you receive many letters claiming that HUD is part of a conspiracy of one kind or another, but my investigation of this case over the years leads me to believe that the claims of V&M Management and its president are firmly grounded in reality. Should you decide that the operation of the Boston HUD office needs to be part of a broader review of HUD procedure, I and my client would be more than pleased to send you any substantiating documentation you might want, or to come to Washington to speak with one of your staff members.

Thank you for your attention to this matter, and if you have any questions, please do not hesitate to contact me.

Victor Aranow

  • Alphonse Mourad, the President of V&M Management, Inc., owner of the 276 units of Section 8 affordable housing known as The Mandela Apartments in Roxbury, Massacusetts, had lost his property as a result of a conspiracy involving U.S. Bankruptcy Chief Judge, Carol J. Kenner, The City of Boston, The Boston Redevelopment Authority, The Department of Revenue, Trustee Stephen S. Gray of The Recovery Group, Beacon Residential Properties, and the Law Firm Hanify & King and Mario Nicosia.
    In January 1996, V&M Management was forced into bankruptcy to stop a foreclosure based upon a forged and fraudulent note by creditor Mario Nicosia. Carol J. Kenner was the bankruptcy judge assigned to V&M's case.
    On February 1, 1996, three governmental agencies, The Boston Redevelopment Authority, The City of Boston, and The Massachusetts Department of Revenue, sought to have a Trustee appointed to wrest control of the Mandela Apartments from Alphonse Mourad. The housing development comprised of 276 units, sits on 5 ½ acres of land just outside of the city center.
    After having failed to achieve a receivership over Mourad's company (V&M) in State Court in over 10 years of litigation, in an effort to gentrify the Lower Roxbury area with urban renewal plan, the governmental entities finally had a chance before a friendly judge to deliver the 5.5 acre of prime Roxbury property to them. The end result was a September 26, 1997 reorganization plan in which Beacon Management was given the development, with money in excesses of $10 million in tax credits by the very entities that sought the Trusteeship in the first place.
    In a done deal, and relying upon false and ancient information, on April 1, 1996, Judge Kenner allowed the trusteeship and stripped Mourad of his fifteen year investment, and the foreclosure of Mourad's personal residence.
    On April 2, 1996, Judge Kenner approved the appointment of Stephen S. Gray as the Chapter 11 Trustee of V&M Management, even though V&M's attorney, Harold Murphy and his law firm, Hanify & King, had represented Stephen Gray in another case, in Carol Kenner's own Courtroom, at the very same time (Patriot Paper Case, No 93-12482-CJK).
    Judge Kenner must have known that Murphy represented Gray in the Patriot Papers case, as she allowed Gray's application to employ Murphy on May 23, 1994. Kenner also endorsed an Order For Relief from the Stay on March 20, 1995 in the Patriot Papers case, with Murphy's name on that document as representing Gray.
    On April 2, 1996, the U.S. Trustee's Office recommended Stephen Gray as the Chapter 11 Trustee, for V&M, and Judge Kenner endorsed Gray's appointment, despite the fact that Murphy represented Gray in an on-going bankruptcy case (Patriot Papers) in her very Courtroom. Nine days later, on April 11, 1996, Judge Kenner endorsed another Patriot Paper Motion for Relief.
    After years of litigation, in which Mourad fought to get his property back, when in fact Mourad offered and brought more money ($5.5 million) to reorganize the corporation (V&M Management, Inc.) than Beacon Residential Properties did, Judge Kenner continued to deny Mourad any vindication or restitution, and went as far as violating his civil rights by unlawfully having him arrested for allegedly violating her wrongful Court Order barring him from the U.S. Bankruptcy Court for life, even though he had motions pending.
    Later, Mourad was sent the K-1 IRS forms by Trustee Stephen Gray for the years 1996 and 1997 for V&M Management, Inc. The IRS stated that Mourad was personally responsible for the income tax on the profit V&M accrued for those years ($1.3 million) that Trustee Gray had pocketed for himself. Judge Kenner Denied Mourad's opposition and Ordered Mourad to pay Stephen Gray's income tax. Mourad appealed the Judge Kenner's decision and, after seven months, is still awaiting a ruling by the three appellate judges.
    On March 31, 1999, more than four months after Judge Kenner barred Mourad from the 11th floor of the Tip O'neil Building, he had filed a malpractice and conspiracy lawsuit against the law firm Hanify & King and Stephen S. Gray in the Suffolk Superior Court, C.A. No. 99-1470C, in which Judge Diane M. Kottymyer had been chosen to preside over the case.
    Hanify & King and attorneys Harold Murphy and Donald Farrell unjustly refused to accept service of the State Court Complaint served to them by the Suffolk County Deputy Sheriff, at their One Federal Street, Boston office.
    Judge Kottymyer allowed Mourad's Motion, and Ordered the Defendants to appear on May 11, 1999, at 2:30 PM, at the Suffolk Courthouse, Room 227, to hear argument on said Motion.
    During this hearing, D. Ethan Jeffery, attorney for Hanify & King, Murphy and Farrell, told Judge Kottymyer that the case had been transferred to the Bankruptcy Court, and that she no longer had jurisdiction to hear the case. This was to Judge Kottymyer's surprise. Judge Kottymyer Ordered the Defendants to accept service.
    Judge Kottymyer advised Mourad to go to the Bankruptcy Court (11th floor of the Tip O'neil Building) to inquire about the transfer of the case.
    Mourad was then arrested for simply following the advice of Judge Kottymyer, to go to the Bankruptcy Courts Clerks Office to inquire about the transferred State Court action, and to see whether it was docketed.
    Mourad initially tried to call the Clerks Office but got no response. So he would not appear at the Clerks Office unannounced, the night before, Mourad notified the FBI that he had no choice but to go the Clerks Office to inquire about the status of his case that was transferred to the Bankruptcy Court, and that he meant no harm to Judge Kenner.
    The FBI then notified U.S. Marshall Stephen M. Donaher to meet Mourad at the Bankruptcy Court and assist him in seeking access to the Clerks Office. When Mourad arrived, and walked through the metal detectors, U.S. Marshall Donaher was awaiting him. Donaher escorted Mourad to a private room, so I could wait while Donaher spoke with Judge Kenner privately about the matter. Donaher spoke with Judge Kenner for over a half hour, trying to convince her to allow Mourad to inquire about his case. Mourad came nowhere near Judge Kenner or her Courtroom at any time.
    Marshall Donaher was forced, by Judge Kenner, to arrest Mourad for contempt of court for violating an invalid Court Order that has no legal or constitutional basis, especially after the bankruptcy case was dismissed. That was a deprivation of Mourad's civil right of access to the Courts.

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