“I’ve always wondered who actually owns the properties CitiApartments manages. I made my checks out to a company with several Roman numerals at the end of its name. It always struck me as a odd, as though the numbers were part of a cataloging system — a way to keep track of different buildings and thus, different accounts.”

Thus speaks Sarah Hromack, former editor of Curbed SF, itself quite a chronicler of Tales of the Citi.

Sarah’s not the only person wondering: When we looked at the recent class action suit filed on behalf of former CitiApartments tenants who have been denied return of their uncontested deposits, we noted that the suit names not just CitiApartments, but 40-something other companies as defendants in this case.

Why are there so many companies named as the defendants on the complaint? Isn’t this just a suit against CitiApartments? We asked Devine on June 13, the day he filed the suit.

Devine insists “There still is money somewhere, funneled to another LLC or a family trust.”“We think there’s something going on here called alter ego liability” Devine told us. Though there are several, associated companies named as the owners of these buildings under the CitiApartments umbrella, Devine believes they’re all operating all as though they’re one company. And, if that can be proven in court, under this alter ego liability rule, the solvent companies will be held responsible for the insolvent companies.

“What we think could be going on here is that each company that owns the building is not well capitalized, so when the tenants ask for deposit money banked by one place, they’re moving the money to another company’s account.” What do you call this? It’s not a shell game…

“No, it’s more than a shell game, it’s siphoning off money, designed to leave one company broke and to get the money somewhere else where no one can find it. If they transfer all your deposits and rent money to another company, when you come to them wanting your deposit back, they can throw their hands up and say they have no money.”

On the heels of John Upton’s excellent Examiner piece on the most recent round of foreclosures on CitiApartments properties, we gave Devine a call to see what he was thinking these days.

In light of these new foreclosures, do you still think there’s this money-moving game going on, or are these people just idiots who don’t know how to handle their money? “I think it’s possible that they bought a lot of property at the top of the boom and are having trouble making the payments now — as happened to so many people.” But Devine insists “There still is money somewhere, funneled to another LLC or a family trust.”

“Right now we’re slogging through the records from all their (associated) companies, figuring out where the outflows are.” By following the money he is hopeful his law firm, Seeger Salvas, will be able to find a way to prove that CitiApartments can do more than just “throw up their hands” when departing tenants ask for their deposit.

But what about these foreclosures? What do they mean? “Anything I say would just be speculation” demurred Devine “but they do seem to be accelerating — I think there were nine this week alone. Who knows where they’ll end up?”

CitiApartments still has until August 13 to respond to the class action suit. Neither Devine nor his colleagues at Seeger Salvas have heard anything from CitiApartments or their general counsel, Ed Singer, and you probably won’t be surprised that they also did not respond to our questions for this story.

the author

Eve Batey is the editor and publisher of the San Francisco Appeal. She used to be the San Francisco Chronicle's Deputy Managing Editor for Online, and started at the Chronicle as their blogging and interactive editor. Before that, she was a co-founding writer and the lead editor of SFist. She's been in the city since 1997, presently living in the Outer Sunset with her husband, cat, and dog. You can reach Eve at eve@sfappeal.com.

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  • nobhill1380

    1390, 1380, 1340 etc… Taylor Street Property just received notes under doors tonight at 11:30 pm that the bank has taken over these Citiapartments buildings today July 31, 2009 and all payments are to be made directly to bank vs. citiapartments. Funny how Citiapartments has autopay directly to their accounts coming out at midnight tonight for most tenants. As per todays notice in the SF Examiner that they have been stealing the deposit money from tenants as cash flow are we to expect failure to pay notices by the bank next week if Citi keeps the rent money? Anyone out their helping the honest tenants?

  • nobhill1380

    1390, 1380, 1340 etc… Taylor Street Property just received notes under doors tonight at 11:30 pm that the bank has taken over these Citiapartments buildings today July 31, 2009 and all payments are to be made directly to bank vs. citiapartments. Funny how Citiapartments has autopay directly to their accounts coming out at midnight tonight for most tenants. As per todays notice in the SF Examiner that they have been stealing the deposit money from tenants as cash flow are we to expect failure to pay notices by the bank next week if Citi keeps the rent money? Anyone out their helping the honest tenants?

  • generic

    Why is anyone still paying their rent money to Citi?

    Seems to me the prudent thing to do is to get at least a few months behind.

  • generic

    Why is anyone still paying their rent money to Citi?

    Seems to me the prudent thing to do is to get at least a few months behind.

  • demjen88

    The lawyer in this case is absolutely correct about CitiApartment’s numerous entities being nothing more than a shell game. I had the unfortunate experience of working for these scumbags and I know for a fact that the multiple entity thing is no more than a farce. They take money supposedly slated for one entity and use it for the expenses accrued by another entity. I am confident that the attorney will be able to get the damages from the entities that still remain, but they better act fast! From what I understand, CitiApartments is very, very close to shutting it’s doors for good. If that happens, the poor people who had their deposits stolen will have to stand in line behind numerous banks in bankruptcy court all seeking a slice slum lord pie!

  • demjen88

    The lawyer in this case is absolutely correct about CitiApartment’s numerous entities being nothing more than a shell game. I had the unfortunate experience of working for these scumbags and I know for a fact that the multiple entity thing is no more than a farce. They take money supposedly slated for one entity and use it for the expenses accrued by another entity. I am confident that the attorney will be able to get the damages from the entities that still remain, but they better act fast! From what I understand, CitiApartments is very, very close to shutting it’s doors for good. If that happens, the poor people who had their deposits stolen will have to stand in line behind numerous banks in bankruptcy court all seeking a slice slum lord pie!

  • Brian Devine

    I’m the attorney who filed the class action against CitiApartments.

    @nobhill1380 – I looked up the Taylor Street addresses on the City Recorder’s website, and it shows that the CitiApartments entity (LSL Property Holdings) is still listed on the deed as the owner. I haven’t heard about a foreclosure action regarding this property. But usually, one of the first thing the Court does when a foreclosure action is filed is to allow the bank to take control of all rents and profits from the building. Sorry I don’t have much information to help you, but we’re still investigating the tangled web that CitiApartments have weaved.

    @demjen88 – I’d love to talk to you about the information you have. Feel free to shoot me an e-mail at bdevine [at] seegersalvas.com

  • Brian Devine

    I’m the attorney who filed the class action against CitiApartments.

    @nobhill1380 – I looked up the Taylor Street addresses on the City Recorder’s website, and it shows that the CitiApartments entity (LSL Property Holdings) is still listed on the deed as the owner. I haven’t heard about a foreclosure action regarding this property. But usually, one of the first thing the Court does when a foreclosure action is filed is to allow the bank to take control of all rents and profits from the building. Sorry I don’t have much information to help you, but we’re still investigating the tangled web that CitiApartments have weaved.

    @demjen88 – I’d love to talk to you about the information you have. Feel free to shoot me an e-mail at bdevine [at] seegersalvas.com