Aaron Yashouafar, owner of Oklahoma City's landmark First National Center, will have to pay $1 million to tenants of a Nevada condominium complex and faces up to 10 years in prison after pleading guilty to one felony count of embezzlement.
The plea comes as Yashouafar faces an Aug. 17 “final” deadline to pay $12 million to Capmark Group to retain control of First National Center, and follows a string of foreclosures, bankruptcies and controversies involving properties owned by his investment groups.
In comments provided Wednesday to The Oklahoman, Nevada Attorney General Catherine Cortez Masto called Yashouafar's embezzlement of $1 million in insurance money intended for repairs of senior residents' fire-damaged condominiums “particularly jarring.”
“Older victims, many of whom were living on fixed incomes in Paradise Spa, were forced to find and pay for alternative living quarters when they were still obligated to make mortgage payments on their burned condo units, while waiting for repairs that would never be made,” Masto said.
The plea agreement allows for Masto to seek 30 days' incarceration for Yashouafar while he awaits his Nov. 14 sentencing. Yashouafar, meanwhile, faces what a Capmark attorney has termed a third and final deadline extension to pay off a reduced mortgage on First National Center or lose control to a receiver.
Neither Yashouafar or Capmark attorneys returned calls Wednesday from The Oklahoman.
Yashouafar promoted himself as someone who would end 20 years of low occupancy and launch long-needed upgrades to the 81-year-old First National tower when he bought it for $21 million in 2006 — far more than the $5 million paid just a few years earlier by another out-of-state partnership that tenants charged did little to improve the office complex.
In the past two years he was listed as one of New York City's top slumlords by The Village Voice, faced a tenant revolt at his 45-story Sky condominium tower in Las Vegas, and filed property bankruptcies on both coasts.
Chuck Wiggin, a veteran real estate and investment broker in Oklahoma City since 1979 who served as receiver for First National Center in 1987, was among those in disbelief when Yashouafar led investment groups in buying the property for $21 million.
“I met some of his people at the time of the transaction,” Wiggin said. “They were very proud of what they did. I introduced them to some people. … But it didn't seem like it was a good deal.”
Wiggin suspects the felony embezzlement plea will further increase the odds against Yashouafar obtaining the $12 million in financing needed to retain control of First National.
“Even if the guy has great credit, the chances of getting $12 million for that building in today's market are very slim,” Wiggin said. “Now it may be impossible.”