DC sues landlords with law used in organized crime to stop mistreatment of low-income tenants

Washington D.C. Attorney General Brian Schwalb has taken an unprecedented legal approach in the fight against substandard housing, filing a lawsuit Thursday that employs racketeering laws to target a family of landlords accused of maintaining deplorable living conditions while defrauding lenders and housing programs.

The lawsuit marks the first time Washington D.C. has used the Racketeer Influenced and Corrupt Organizations Act (RICO) – legislation originally designed to combat organized crime – in a housing case. The legal action targets Ali “Sam” Razjooyan, his brother Eimon “Ray” Razjooyan, and their mother Houri Razjooyan, who collectively own approximately 70 primarily rent-controlled properties across the district.

“For every 100 extremely low income renters in the District of Columbia there are only 32 affordable and available homes,” Schwalb said at a press conference announcing the lawsuit. He accused the Razjooyan family of exploiting this housing crisis through “a sprawling illegal enterprise, a complex web of shell LLCs, unlicensed property management and construction companies and straw purchasers.”

According to the lawsuit, the Razjooyans deceived lenders with false promises to renovate buildings that would then be rented to tenants receiving housing subsidies paid by the D.C. government. Instead, the buildings were allegedly allowed to deteriorate, leaving hundreds of residents in squalid conditions.

The living conditions described in the lawsuit are stark: rodent and cockroach infestations, noxious odors from basements filled with standing water, and apartments without heat throughout winter months. The Attorney General’s office claims these conditions rendered some units completely uninhabitable, further exacerbating the district’s affordable housing shortage.

Ali Razjooyan strongly disputed the allegations in a text message response. “These claims have not been proven, yet they are being represented to the public as though they already have been,” he stated. “This case should be decided in a courtroom based on evidence, not through dramatic headlines.” Razjooyan expressed confidence that when “the evidence is tested,” the accusations would be shown not to “reflect the facts.”

This lawsuit builds upon earlier legal actions taken by Schwalb’s office in 2024 on behalf of residents at two Razjooyan properties. The continuing investigation allegedly uncovered an intricate network designed to conceal true ownership and the actual condition of properties.

The use of RICO in this housing case represents a significant tactical shift in how municipalities might combat fraudulent housing practices. The statute allows prosecutors to target entire operational networks rather than addressing issues property by property.

Palmer Heenan, a housing expert and civil rights attorney, characterized the approach as “novel and important” because it enables authorities to penetrate multiple layers of corporate ownership. “One of the advantages is it lets you go backwards into these networks, so it makes it easier to go after all of the companies involved,” he explained. “It will also make it easier for tenants to obtain justice for the horrific conditions they’re all too often been exposed to.”

Among the specific allegations, the lawsuit claims Razjooyan attempted to secure refinancing by falsely representing the construction of 10 new units at one property. To support this claim, he allegedly installed doors with apartment numbers that opened to “concrete block walls, apparently to deceive appraisers and generate a higher property evaluation.”

The Attorney General is seeking restitution for affected tenants and a court order that would effectively ban the defendants from doing business in the District of Columbia.

This case highlights the intensifying struggle over affordable housing in major urban centers across the United States. As cities face growing housing shortages, the exploitation of vulnerable tenants and housing subsidy programs has become a pressing concern for municipal governments. The use of RICO statutes could represent a new front in this battle, giving prosecutors more powerful tools to dismantle complex networks of housing fraud.

If successful, Washington D.C.’s approach might serve as a template for other jurisdictions facing similar challenges with landlords who operate through intricate corporate structures designed to shield them from accountability.