The defendants in a criminal case alleging tenant harassment, public nuisance, and zoning violations at a pair of apartment buildings have agreed to a 12-month diversion program that will dismiss all charges against them if payments totaling $102,000 are made.
On July 29, a judge for the California Superior Court placed defendants Adam Shekhter, MySuite, LLC., 1238 10th Street, LLC., and 1433 Euclid Street, LLC., in a diversion program that will result in all criminal charges being dropped if the defendants pay $80,000 to the City of Santa Monica for tenant protection enforcement and outreach, $20,000 to a former tenant, and $2,000 to a current tenant.
The case centers on a pair of buildings at 1238 and 1242 10th Street that were sold in the summer of 2015 for $8 million to Neil Shekhter, the CEO of NMS Properties, Inc. However, the properties were not initially part of the NMS inventory and were managed under the MySuite company owned by Neil’s son Adam.
The new owners began extensive renovation work on the buildings and while some residents were bought out of their leases others were evicted using the Ellis Act. The project prompted several investigations into the legality of the evictions, safe handling of asbestos, improper subdivision of rent-controlled units and potential conversion of the site into corporate housing.
Those investigations resulted in a criminal case against Adam Shekhter and several associated companies alleging tenant harassment, maintaining a public nuisance and violating local zoning laws when upgrading and converting units. The case alleged that defendants disobeyed repeated instructions from Code Enforcement, failed to fully pay for tenants to live elsewhere while the building was being renovated and used unlawful tactics — such as illegal buyout and eviction notices — in an attempt to evict tenants.
According to the City, if the defendants successfully comply with the terms of diversion, the Court will dismiss the charges against the defendants at the end of the diversion period. If the defendants fail to comply with the terms of diversion, the court is authorized to terminate diversion and resume the criminal proceedings.
A civil complaint is still pending that accuses the defendants of lying to City staff and submitting false applications to cover up unauthorized and unpermitted rental activity.