Brooklyn Developer Trio Pleads Guilty in 421a Tax Abatement Fraud Cases

Three NYC developers pleaded guilty to overcharging rent at buildings subsidized by the 421a tax program, following a major investigation by Manhattan DA Alvin Bragg.

By: AXL Media

Published: Mar 10, 2026, 6:57 AM EDT

Source: The Real Deal

The Mechanics of the Fraud

The developers were accused by Manhattan District Attorney Alvin Bragg of certifying to city and state officials that specific units had been set aside for affordable housing, while actually renting them out at market rates. According to prosecutors, the landlords charged at least $1,000 more per month in rent than the legal limit allowed under the 421a program.

Guilty Pleas and Restitution

While the trio was initially indicted in October 2022 on charges of grand larceny and tax fraud, they ultimately pleaded guilty to the lesser charge of filing a false instrument. The settlements include significant financial penalties and a mandate to restore affordable housing stock:

Mendel Gold: Defrauded the program at 1140 Bushwick Avenue and 140 Stanhope Street. He must pay $275,000 in restitution and add one affordable unit to his portfolio.

Joel Kohn: Targeted for fraud at 70 Bushwick Avenue in Williamsburg. He is required to pay $514,000 in restitution and add one affordable unit to the property.