NY Presiding Justice Accused of Lying on Mortgage Docs

Judge out of order

The New York Post by Isabel Vincent and Melissa Klein - March 27, 2011

A Manhattan judge in charge of one of the most prestigious state courts in the country lied on mortgage documents, received property-tax breaks he didn't deserve and made questionable hires that included his ex-wife. Justice Luis Gonzalez, the presiding judge of New York's Appellate Division First Department, simultaneously took advantage of both rent-stabilization rules and home-ownership tax breaks by claiming places in two boroughs as his home, The Post has learned. In 2009, he took out a $510,276 loan on a Brooklyn house, attesting on the mortgage document that the property would be his primary residence. He then got a STAR tax break in 2009, 2010 and 2011 -- a perk that amounted to $4,440 and is supposed to go only for a primary residence. But Gonzalez really resided in a rent-stabilized Grand Concourse apartment in The Bronx, a living situation that is also supposed to be a primary residence. Gonzalez confessed his duplicity to The Post, saying he designated the Brooklyn abode as his main home to get the mortgage. "To be honest with you, I did not think there was anything improper about it," he said. "It sounds super silly, super stupid." Asked whether the deception was a crime, he said, "If it is, you're talking to someone who is in deep trouble." Jonathan New, a mortgage-fraud expert and former Manhattan federal prosecutor, said it's a federal crime -- fraud -- to lie on a credit application to a federally insured institution or for a federally insured loan. It is punishable by up to 30 years' prison and a maximum $1 million fine. Documents on file with the city show that Gonzalez got the February 2009 loan through now-defunct Union Federal Mortgage Corp. and that the loan was insured by the Federal Housing Administration. Such government-insured loans are available only for a primary residence. Gonzalez has taken out four mortgages on the Williamsburg home since 2004 and paid off three. On the first, for $280,000, he also said he would live in the house, on South Sixth Street. The judge says he lived in the modest two-bedroom house sometime between 2006 or 2007 and 2009, a period in which he borrowed $467,000 in two loans. He said he moved back to The Bronx in January 2009 and was unaware the Brooklyn home had a tax break. Gonzalez, 65, was promoted from an Appellate Division judge to presiding justice in March 2009 by Gov. David Paterson, becoming the first Latino to hold to the position. As presiding judge, he was required to live in The Bronx or Manhattan. He earns $147,600. Critics say Gonzalez has allowed nepotism to run rampant in the court. Vivian Gonzalez, whom the judge divorced 10 years ago but remains friendly with, was hired in December as a $65,000-a-year court clerk. Gonzalez said there was "no prohibition" against hiring his ex. He said he signed off on recent hirings of court workers' relatives, including his secretary's brother, his executive assistant's nephew and the son of a court officer who used to be his driver. None had state court experience, state payroll records show. But Gonzalez said all were qualified. Additional reporting by Candice Giove -- melissa.klein@nypost.com