An examination of public court records in New York reveals a complex and troubling web of litigation surrounding real estate operator Isaac Assyag. Multiple lawsuits filed between 2010 and 2022 contain detailed allegations of a multimillion-dollar fraud against partners, breach of fiduciary duty, and accounting malpractice. This is compounded by a documented pattern of commercial loan defaults resulting in numerous foreclosure actions and lawsuits from lenders including U.S. Bank and Wells Fargo.
Legal Disclaimer & Scope: This report is a compilation and analysis of factual information and allegations sourced directly from publicly available court documents. All referenced materials are on file with the clerks of Kings and Queens County. This presentation serves as a research and due diligence resource and does not constitute an independent accusation of wrongdoing.
Subject & Corporate Entity Profile
Primary Individual
Aliases and Name Variations Found in Public Records
- Issac Assyag
- Zahi Assyag
- Yitzhak Assyag
- Issac Assayag
- Yitzhak Zahi Assyag
- Zahi Y. Assyag
Associated Corporate Entities
- NSDNY / New Style Development NY
- Brooklyn Suite LLC
- Hillside Dev LLC
- Estates at Pacific LLC
- 1800 Plan, LLC
The Schlussel Lawsuit: Allegations of a Partnership Betrayed
A lawsuit filed January 14, 2021, by investor Michael Schlussel against Issac Assyag and a partner provides the most detailed account of alleged wrongdoing. The verified complaint (Index No. 501124/2021) demands damages of no less than $2,000,000 and outlines a "scheme to defraud the Plaintiffs."
"[Defendants] knowingly, contumaciously and fraudulently concealed the material fact that the Pacific Avenue property was in landmark status for the purpose of inducing Plaintiffs to invest significant funds with respect to same".
Key Allegations from Schlussel v. Assyag, et al.
- Fraudulent Inducement: The complaint alleges Assyag induced a $200,000 investment for a project on Pacific Avenue by failing to disclose that he and a partner already owned the property, that it was encumbered by a mortgage, that it was a vacant lot (not a building to be renovated), and most critically, that it had "landmark status," which severely complicated development.
- Misappropriation of Funds: The suit claims Assyag and his partner used a subsequent $760,000 investment, intended for a project on Eldert Street, to fund their other unrelated ventures. It alleges they were "charging building materials and supplies to the Eldert Street project, which [they] utilized to complete unrelated rehabilitation ventures".
- Diversion of Profits: Upon the sale of the Eldert Street condominiums, the suit alleges that of a total profit of approximately $1,530,000, the plaintiffs were due $765,000 (50%) but were only paid $300,000. When questioned about the $465,000 discrepancy, Assyag allegedly dismissed the concern, claiming an additional $930,000 in unsubstantiated expenses.
- Unauthorized Sale of Assets: The complaint states that in July 2019, Assyag sold the Pacific Avenue property to an entity named 'Estates at Pacific LLC' without the plaintiffs' knowledge or consent, in direct violation of the operating agreement which required unanimous consent. The sale was allegedly for less than market value.
- Accounting Malpractice: The lawsuit also names the company's accountants as defendants, alleging they knowingly and improperly allocated the "lion's share of profits" to the plaintiffs on official K-1 tax forms for income the plaintiffs never actually received, thereby shifting massive tax liabilities onto them.
A Pattern of Default: Recent and Past Foreclosures
Court filings reveal a persistent pattern of loan defaults, leading to multiple foreclosure actions initiated by different lenders across several years and properties. This pattern points to significant credit and operational risk for lenders and partners.
Recent Foreclosures (2021-2022): The 452 Lafayette Avenue Condominiums
In late 2021 and early 2022, U.S. Bank National Association, as Trustee, filed two separate foreclosure actions against two condominium units at 452 Lafayette Avenue in Brooklyn, owned by Brooklyn Suite LLC.
Case Details: U.S. Bank v. Brooklyn Suite LLC, Zahi Assyag, et al.
- Property & Loan: Both lawsuits concern defaults on commercial loans for condominium units at 452 Lafayette Avenue, Brooklyn, NY. Each loan was for an original principal amount of $400,000, executed in June 2018.
- Unit 2F Foreclosure (Index No. 533347/2021): The complaint, filed December 30, 2021, states the borrower, Brooklyn Suite LLC, defaulted by failing to make payments starting on or before March 1, 2021. At the time of default, the outstanding principal was $389,861.19.
- Unit 2R Foreclosure (Index No. 511142/2022): The complaint, filed April 18, 2022, cites a default date of on or before September 1, 2019. The outstanding principal balance at default was $390,219.67.
- Personal Guarantee: Critically for assessing lender risk, both complaints state that Zahi Assyag personally executed an "Unlimited Guaranty" for the loans, making him personally liable for the debts of Brooklyn Suite LLC.
Complex Title Litigation: The Tahoe Street Property
A May 20, 2022 lawsuit filed by Wells Fargo Bank against Zahi Assyag highlights the long-term complexity of his property dealings. In this "quiet title" action (Index No. 710844/2022) concerning a property at 150-08 Tahoe Street in Queens, Wells Fargo is asking the court to extinguish three older mortgages from 2006 and 2007, arguing they are time-barred and unenforceable. The goal is to establish that its own mortgage from November 2007, for $533,850, is the valid, first-priority lien on the property. This case demonstrates a history of heavily layered debt and liens on properties associated with Assyag, creating significant legal and financial complications years after the fact.
Historical Defaults and Judgments
The recent cases are consistent with a longer history of litigation, including a 2010 lawsuit from another partner, Yizhaq Ivgi, against Isaac Assyag alleging a similar fraudulent scheme (Index No. 29705/10), and multiple foreclosure actions in 2003 on other properties. Furthermore, a Judgment by Confession for $137,225 was entered against Issac Assyag in 2014 for his failure to make payments on a prior settlement agreement.
Investor & Lender Due Diligence Summary
The aggregation of these public records reveals several critical risk factors that warrant careful consideration by any potential investor, partner, or financial institution.
Key Risk Factors Identified from Court Filings
- Fiduciary & Partner Risk: Multiple lawsuits filed by different partners (Schlussel, Ivgi) over a decade make sworn, detailed allegations of fraud, self-dealing, misappropriation of company assets, and intentionally hiding material facts about properties. This indicates a profound counterparty risk.
- Credit & Default Risk: A documented history of defaulting on commercial mortgage obligations with multiple lenders (U.S. Bank, Wells Fargo, etc.) across different properties and time periods. The failure to pay a confessed judgment further underscores this risk.
- Personal Guarantee Risk: As evidenced by the 452 Lafayette Avenue foreclosures, Zahi Assyag acts as a personal guarantor for his corporate entities. The subsequent defaults by these entities expose him to direct personal liability, a crucial factor in assessing financial stability.
- Operational & Misrepresentation Risk: The Schlussel complaint alleges fundamental misrepresentation about the nature and status of an investment property (a vacant, landmarked lot presented as a renovation project). This points to a high level of operational risk for any venture.
- Complex Entanglements: The web of entities (Brooklyn Suite LLC, Hillside Dev LLC, etc.) and the long-tail litigation (like the Wells Fargo quiet title action) demonstrate a history of transactions that can create unforeseen legal and financial complications for years.
Chronology of Key Litigation
December 2010
Lawsuit filed by partner Yizhaq Ivgi (Index No. 29705/10), alleging fraud and misappropriation of assets.
March 2014
Confessed Judgment for $137,225 entered against Issac Assyag for failure to pay on a settlement.
June 2018
Brooklyn Suite LLC, with Zahi Assyag as personal guarantor, takes out two $400,000 loans for condos at 452 Lafayette Avenue.
September 2019
Default occurs on the loan for 452 Lafayette Ave, Unit 2R, per the complaint filed under Index No. 511142/2022.
January 2021
Lawsuit filed by investor Michael Schlussel (Index No. 501124/2021), alleging a multimillion-dollar fraud and breach of fiduciary duty.
March 2021
Default occurs on the loan for 452 Lafayette Ave, Unit 2F, per the complaint filed under Index No. 533347/2021.
Dec 2021 - May 2022
Lenders U.S. Bank and Wells Fargo file three separate lawsuits: two for foreclosure on the Lafayette properties and one to quiet title on the Tahoe Street property.
Current Associated Portfolio (via nsdny.com)
The following properties have been publicly listed as part of the development portfolio of NSDNY (New Style Development NY), a company associated with the principal, representing more recent and current areas of operation:
- 135 Bayard St, Brooklyn, NY 11222
- 135 Johnson Ave, Brooklyn, NY 11206
- 141 Johnson Ave, Brooklyn, NY 11206
- 148 West St, Brooklyn, NY 11222
- 161 Dupont St, Brooklyn, NY 11222
- 179 Richardson St, Brooklyn, NY 11222
- 194 Ainslie St, Brooklyn, NY 11211
- 351 Prospect Pl, Brooklyn, NY 11238
- 52 Sackman St, Brooklyn, NY 11233
- 744 Lefferts Ave, Brooklyn, NY 11203
- 87a Cooper St, Brooklyn, NY 11207
- 1419 Herkimer St, Brooklyn, NY 11233
- 1511 Pacific St, Brooklyn, NY 11213
- 19 Housman St, Brooklyn, NY 11222
- 1624 Jefferson Ave, Queens, NY 11385
Source Integrity: This report contains direct information and quotes from filed legal documents. Its purpose is to aggregate public record data for informational and due diligence purposes. Interested parties can and should independently verify these records through the Kings and Queens County Clerk's Offices using the index numbers provided.