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New York State State Attorney General Eric Schneiderman has accused real estate developer Bruce Eichner of fraud. The accusation revolves around the sale of timeshares in a hotel which Mr. Eichner developed.
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Last Thursday, the State won a court order prohibiting Mr. Eichner from selling any more timeshares there.
The scandal surrounds the alleged sale of timeshares to some 14, 000 people in the Manhattan Club on W. 56th St. which only has 286 suites. Reportedly, hundreds of complaints were filed with the New York State authorities from angry owners who could not book time for suites for which they had paid tens of thousands of dollars. They also pay several thousand dollars a year apiece in building maintenance fees.
Attorney General Schneiderman stated: “We allege that the Manhattan Club, near New York City’s iconic Carnegie Hall, is a particularly stark example of such a bait-and-switch timeshare scheme. Owners, in some cases, have not been able to use any of the time they purchase.”
This went on while the residence was taking bookings online form tourists for as much as $450 a night.
The judge also barred the company from foreclosing on any of the owners for failing to continue to pay fees. It also froze its bank accounts related to the hotel.
Schneiderman’s office had staffers investigate posing as potential buyers for timeshares still being sold. This came after an attempted class action suit by owners was dismissed last year.
A spokesperson for the Continuum Company, which built the Manhattan Club, responded: “We intend to fully cooperate with the attorney general’s investigation and look forward to bringing clarity to the entire issue.”
The Manhattan Club’s website describes it as a residence style boutique hotel that provides “endless possibilities for the enjoyment of its guests.” It says that the hotel offers residents a knowledgeable concierge staff, a private club lounge, a fitness center, a business center and valet parking.
It also boasts an intimate lobby, meeting Rooms, complimentary Hi-Speed Internet, fully deeded ownership, spacious suites, pillow top mattresses, sumptuous linens, posh marbled baths, flat screen televisions sets, daily housekeeping, 24 hour security and RCI Gold Crown Status.
Bruce Eichner is chairman of the Continuum Company, a privately held firm focused on the acquisition and development of residential, office, hospitality and retail space in New York, Miami and Las Vegas.
