A slain Brooklyn slumlord’s shady business practices helped
sink a bank that counted President Obama as a customer and ex-Chicago Bears
quarterback Jim McMahon as a member of its board, The Post has learned.
Two unpaid loans to murder victim Menachem Stark and
his business partner Israel Perlmutter were among 17 bad bets that
spelled $104 million in losses for Chicago’s Broadway Bank before it was shut
down by the feds in 2010, court papers show.
The loans included $1.5 million Broadway gave Stark and
Perlmutter in December 2007 through their Southside House LLC business “to
provide working capital for the borrowers’ New York-based real-estate
business,” according to a 2012 suit filed by the Federal Deposit Insurance
Corp.
The one-year, interest-only loan was secured by a second
mortgage on a 74-unit apartment building in Williamsburg that Stark and
Perlmutter bought for $29 million earlier in 2007, the Chicago federal court
filing says.
But Broadway lost any chance of getting repaid when Stark
and Perlmutter “defaulted on the first mortgage,” the suit says.
Stark and Perlmutter also borrowed $6.2 million in
construction money from Broadway in February 2007 to develop The Bedford Lofts
in South Williamsburg, even though financial statements revealed “they were
highly illiquid and unable to pay the loan,” the suit says.
Stark may have been targeted for a professional hit by one
of his many unpaid creditors, source said.
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