Trust. It's a word often heard when board members and shareholders of Big Six, a 982-unit co-op complex in Woodside, Queens, talk about their former managing agent, Richard Stone, and what they think went wrong. Essentially, they say, we trusted the wrong man. Why did individual shareholders, mostly retirees, invest up to $80,000 each in a shopping center expansion that ballooned in cost and has yet to be finished? Why did board members allow themselves to be convinced that the expansion was in the co-op's best interests?
Everybody trusted him, says Hal Schimel, a long-time resident of Big Six.
He was good, explains Richard Fischbein, a partner with the law firm of Fischbein, Badillo, Wagner and Itzler, who is representing the board in a civil suit filed last month against Stone and others allegedly involved in the scheme. There's no question that he was good at keeping board members in the dark.
Exactly what happened at Big Six, where Stone was the managing agent for 25 years, remains shrouded in mystery. But the gist of it is that millions of dollars of the co-op's money, as well as nearly two million dollars loaned by individual shareholders, was spent on expanding the complex's shopping center, a project that spiralled out of control and has yet to be completed. The situation is further complicated by allegations that much of the money went toward contracting projects at other properties owned or operated by Stone.
Big Six, a Mitchell-Lama co-op that is home to mostly retirees and working-class families, is now $27 million in debt, says Fischbein, a sum that includes $1 million owed to the city in mortgage payments, $4 million in real estate taxes, water and sewer charges and $10 million in construction loans.