Barrett: On Eve of Election, Thompson Is Sued Over How He Obtained His Harlem Home

On the eve of the mayoral election, Bill Thompson is suddenly facing a lawsuit that accuses him of engaging in a "blatant fraud" when he acquired his $2.1 million Harlem home in 2008.

Franklyn Castro, who fought unsuccessfully to block the court-compelled sale of his restored brownstone at 106 West 121st Street last year, is filing a 10-page complaint today in Manhattan Supreme Court detailing allegations that Thompson conspired with a politically-wired receiver in the case, Marc Landis, to deny him the right to match or top the Thompson bid.

The suit charges that Landis "represented that the sale was an 'an all cash deal,'" concealing the fact that Thompson obtained a $729,000 mortgage and $400,000 home equity loan from Amalgamated Bank, which did billions in business with Thompson at the comptroller's office, as the Voice revealed last week.

Based on those representations, Castro, who had spent years personally renovating the six-bedroom, seven-fireplace, four-story house before being forced from it in a divorce case, "agreed to accept the contract of sale" and withdraw his appeals. Castro had won the right of first refusal in the divorce judgment in 2004 -- giving him the right to match any bid -- but a judge stripped him of that right during the hotly contested years that followed.

That's why Landis was appointed to ready the house for sale and to sell it to "an independent third party."

Castro also named Derrick Cephas, the CEO of Amalgamated, as a defendant, accusing Thompson of obtaining through a "personal relationship" with Cephas the $1,129,000 financing for the house.

Lawrence Bloom, Castro's attorney, is apparently a witness himself to what the complaint says were Landis' "false" representations. The complaint charges that "this fraud has been perpetrated upon" Castro's attorney. Castro is seeking an order "restoring title" for the house to him and his ex-wife, or a judgment for $25 million in damages. Landis, who had yet to see the suit when contacted this morning, said: "They're mischaracterizing the contract of sale and my statements regarding the contract." Bloom and Castro do not dispute that they approved the contract at the time.

If Thompson thinks this is an election-day lawsuit likely to disappear the day after, he underestimates Castro, a 6-foot-5-inch plumber of Caribbean heritage just like Thompson. Castro says it took him five years to restore the house, which was a wrecked SRO (Single Room Occupancy) building with at least ten cluttered units when he bought it, and he's already been fighting in court to keep it for seven years. The problem for Castro may be, however, that suits against a receiver could require the approval of the court since a receiver acts as the agent of a judge. That may be difficult to obtain.

The Bloomberg campaign put up a television commercial on Friday citing the Voice story about the Amalgamated mortgage, contending that the mortgage was one more example of Thompson trading off his office. Prior Bloomberg commercials have cited Times and Daily News' stories detailing $650,000 in contributions Thompson has raised from placement agents and asset managers who do business with the pension funds Thompson administers. Amalgamated manages billions of fund assets and earned $51 million in fees for doing so in 2008.

The suit also names Elsie McCabe, Thompson's wife, as a defendant. While McCabe is the name she has used in connection with the Museum for African Art that she is now building on Fifth Avenue, she apparently now uses the surname McCabe-Thompson.

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