DC Attorney General files lawsuit to dismantle alleged real estate fraud scheme

DC Attorney General files lawsuit to dismantle alleged real estate fraud scheme

The D.C. Attorney General has filed a civil lawsuit aimed at shutting down what officials describe as a sprawling real‑estate fraud scheme that exploits tenants, lenders and District agencies while worsening the city’s affordable‑housing crisis.

WASHINGTON - The D.C. Attorney General has filed a civil lawsuit aimed at shutting down what officials describe as a sprawling real‑estate fraud scheme that exploits tenants, lenders and District agencies while worsening the city’s affordable‑housing crisis.

What we know:

Attorney General Brian L. Schwalb alleges that Ali "Sam" Razjooyan, his brother Eimon "Ray" Razjooyan and their mother, Houri Razjooyan, have been running an illegal real‑estate network that controls dozens of apartment buildings across the District.

According to Schwalb’s office, the family has spent the past decade acquiring more than 70 mostly rent‑controlled buildings, 90% of them in Wards 7 and 8.

The lawsuit alleges that, through a Ponzi‑style operation, the Razjooyan use fake financial documents and false renovation promises to secure loans.

They would then rent them to tenants who receive housing subsidies that are paid by the District agencies and that are above the rent-stabilized amounts, officials said.

Instead of repairing the properties, investigators say the Razjooyan would keep the loan money and use it to pay off earlier debts and buy new buildings to continue the scheme.

Schwalb’s office says the scheme left hundreds of vulnerable tenants living in dangerous conditions, including infestations, gas leaks, electrical hazards, mold, flooding and piles of trash.

What they're saying:

The lawsuit accuses the family of defrauding District agencies out of more than $16 million by falsely certifying that their units were safe and habitable, a requirement for receiving housing‑subsidy payments.

"Today, we’re dismantling the Razjooyan slumlord empire," Schwalb said in a statement. "DC has a serious housing affordability problem, and slumlords like the Razjooyans make things worse by decreasing the available housing supply and forcing tenants to live in horrific conditions. Their business model, by design, preys on tenants for profit — cheating banks, private lenders, and the DC government along the way. Instead of addressing each building individually, we’re attacking the very foundation of their illegal operation. As the District’s independent Attorney General, I am committed to using the law to put an end to such fraud and exploitation and to protect affordable housing in the District."

Read the lawsuit here.

New statement:

Razjooyan sent FOX 5 an official statement Thursday afternoon. You can read it in full below:

"I strongly disagree with the Attorney General’s allegations. These claims have not been proven, yet they are being presented to the public as though they already have been. That is not how our legal system is supposed to function.

This case should be decided in a courtroom based on evidence—not through dramatic headlines. The public deserves facts, not accusations framed for publicity.

The Office of the Attorney General has suggested that this action is about protecting District residents. In reality, its approach has imposed substantial costs on property owners and the housing system without producing meaningful solutions. Enforcement actions that prioritize publicity over process ultimately burden the very residents they claim to protect.

I will address these allegations in court, where they belong. When the full record is developed and the evidence is tested, I am confident it will demonstrate that the accusations do not reflect the facts."