Why would Extell Development Company allegedly pay $669,000 to a 77-year-old man in Newburgh, N.Y., as commissions for selling 9 apartments in its Rushmore apartment building on Riverside Drive South when he has claimed in a newspaper article that he has never heard of the building?
An article in today's Wall Street Journal by Craig Karmin raises such a question when it reported that New York State officials are investigating whether a lawyer on one of his clients engaged in improper real-estate sales practices at the building.
The article said that the Department of state opened an investigation earlier this month in response to the newspaper's article last month that Mr. Cobb, an attorney, shared sales commissions with his friend and client, Carolyn Li, "a person familiar with the matter said."
"As a licensed New York attorney, Mr. Cobb is entitled to collect broker commissions but it would be against the law for him to split them with someone who isn't a licensed broker. Ms. Li isn't a broker and cannot legally collect commissions. Mr. Cobb said this week he hasn't been contacted by department officials but declined to comment further. Previously, he had declined to say whether he split commissions with Ms. Li. Ms. Li, who has worked in finance, didn't respond to requests for comment.
"Corcoran Sunshine Marketing Group, the building's sales and marketing agent," the article continued, "could also come under Department of State scrutiny, say real-estate attorneys. Officials at Corcoran Sunshine didn't respond to request for comment. Internal sales documents from Corcoran Sunshine reviewed by the Journal show that the 77-year-old Mr. Cobb earned $669,000 in commission checks in 2006 on nine apartment sales. Mr. Cobb said in an interview last month he never met any of the buyers in the sales attributed to him in the Corcoran sales records, and that he hadn't heard of the Rushmore. Some people familiar with the Rushmore told the Journal that several of the apartments sold and attributed to Mr. Cobb were actually shown by Ms. Li, whom Mr. Cobb said has been a friend for 15 years. Ms. Li instructed the building's developer, a venture between Extell Development Corp. and Carlyle Realty Partners, that it should pay a 3% commission on condo sales to Mr. Cobb, according to an email Ms. Li sent that was reviewed by the Journal. None of the documents reviewed by the Journal show that Mr. Cobb paid any commission money to Ms. Li."
The 271-unit Rushmore is one of three new residential buildings in New York developed by Extell and Carlyle, the article said, and "Carlyle says the developers paid Mr. Cobb because his name was listed on the purchasing contracts as a broker, according to a spokesman."
An article in today's Wall Street Journal by Craig Karmin raises such a question when it reported that New York State officials are investigating whether a lawyer on one of his clients engaged in improper real-estate sales practices at the building.
The article said that the Department of state opened an investigation earlier this month in response to the newspaper's article last month that Mr. Cobb, an attorney, shared sales commissions with his friend and client, Carolyn Li, "a person familiar with the matter said."
"As a licensed New York attorney, Mr. Cobb is entitled to collect broker commissions but it would be against the law for him to split them with someone who isn't a licensed broker. Ms. Li isn't a broker and cannot legally collect commissions. Mr. Cobb said this week he hasn't been contacted by department officials but declined to comment further. Previously, he had declined to say whether he split commissions with Ms. Li. Ms. Li, who has worked in finance, didn't respond to requests for comment.
"Corcoran Sunshine Marketing Group, the building's sales and marketing agent," the article continued, "could also come under Department of State scrutiny, say real-estate attorneys. Officials at Corcoran Sunshine didn't respond to request for comment. Internal sales documents from Corcoran Sunshine reviewed by the Journal show that the 77-year-old Mr. Cobb earned $669,000 in commission checks in 2006 on nine apartment sales. Mr. Cobb said in an interview last month he never met any of the buyers in the sales attributed to him in the Corcoran sales records, and that he hadn't heard of the Rushmore. Some people familiar with the Rushmore told the Journal that several of the apartments sold and attributed to Mr. Cobb were actually shown by Ms. Li, whom Mr. Cobb said has been a friend for 15 years. Ms. Li instructed the building's developer, a venture between Extell Development Corp. and Carlyle Realty Partners, that it should pay a 3% commission on condo sales to Mr. Cobb, according to an email Ms. Li sent that was reviewed by the Journal. None of the documents reviewed by the Journal show that Mr. Cobb paid any commission money to Ms. Li."
The 271-unit Rushmore is one of three new residential buildings in New York developed by Extell and Carlyle, the article said, and "Carlyle says the developers paid Mr. Cobb because his name was listed on the purchasing contracts as a broker, according to a spokesman."
Architecture Critic
Carter Horsley
Since 1997, Carter B. Horsley has been the editorial director of CityRealty. He began his journalistic career at The New York Times in 1961 where he spent 26 years as a reporter specializing in real estate & architectural news. In 1987, he became the architecture critic and real estate editor of The New York Post.
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