A battle among brothers for a New York actual property agency is getting ugly.
Steven, Michael and Edward Ostad are duking it out over investments in firms and portfolios. However a year-long authorized struggle over enterprise strains and fairness has devolved into explosive private assaults, with Steven and his brothers each alleging dangerous habits.
Steven Ostad has now mentioned his brothers have been conducting fraud with cash rents, clean checks and cast paperwork, all whereas excluding him from administration and possession. Courtroom filings present he’s supplied images he alleges again up his declare, whereas his brothers have in flip painted him as an unsavory and untrustworthy character, susceptible to habit.
The allegations on either side are in some methods peripheral to Steven’s declare that he was unfairly reduce out of the enterprise. However they’ve made an acrimonious state of affairs much more hostile.
“In April 2026, Steven’s prior counsel knowledgeable The Actual Deal that he was exercising restraint — that he possessed images, affidavits and different information however was selecting to not file them,” Leo Jacobs, Steven’s legal professional, wrote in a press release. “That restraint has been lifted.”
Unhealthy blood
At their core, the disputes among the many Ostad brothers are about cash.
The brothers personal a portfolio of partially rent-stabilized properties, a administration firm known as Tristar Administration Associates, and a lending arm known as Flatiron Realty Capital.
Michael and Edward Ostad, urologists by commerce, filed in 2025 to dissolve a portfolio of 10 partially rent-stabilized properties. Standing in the way in which was Steven, youthful than the 2 by greater than a decade.
The 2 sides went into mediation, and the problem fell off the courtroom’s calendar.
Then, earlier this yr, Steven filed a lawsuit claiming he had been unfairly reduce out of managing the actual property portfolio, in addition to possession of Tristar and Flatiron. Steven had made a $6.5 million funding in Flatiron beneath assurances that he could be an element proprietor. He obtained distributions, however was excluded from the working settlement and from fairness within the lender.
His brothers moved to dismiss the swimsuit, and supplied working agreements that confirmed Steven as included on the actual property portfolio however not Flatiron.
Steven then switched legal professionals, deciding on brash chapter legal professional Leo Jacobs. He filed a number of incendiary paperwork and amended his criticism to deal with alleged fraud schemes at Tristar.
Amram Tehrani, a former worker of the Ostad’s Tristar Administration Associates, instructed the courtroom that the corporate often collected rents from business tenants throughout Manhattan, the Bronx and Queens in money. Though the properties had been owned by separate entities, the Ostads would deal with the money as fungible from one entity to the subsequent, and never file the money as earnings, Tehrani wrote.
The affidavit consists of photographs of stacks of money, which Tehrani claimed had been within the Tristar places of work.
The Ostads additionally lied to the state to falsely set up flats as market-rate as a substitute of rent-stabilized, Tehrani mentioned. In 2022, the Ostads bought a brand new constructing, 817-819 Ninth Avenue in Manhattan. Tristar staff, beneath Edward’s course, falsified tenant information and submitted them to the state. They used names and data from tenants in different Ostad properties and cast signatures straight.
An legal professional for Tehrani declined additional touch upon the allegations.
In his criticism, Steven describes additional fraud. Tenants who paid by test, he says, had been instructed to submit checks with the recipient title clean. That allowed staff to deposit the checks in no matter account they most popular.
“The defendants need this seen as a household disagreement as a result of it diminishes what the criticism alleges — monetary fraud inside an enterprise massive sufficient to hold a reported billion-dollar UBS credit score line,” Jacobs mentioned in a press release.
Steven is claiming that the fraud represents a breach of fiduciary responsibility. However the fraud allegations are in some methods simply incidental to Steven’s core claims of being unfairly reduce out of possession of Flatiron and the portfolio. The allegations do nonetheless stand to affect the way in which the Ostads are capable of do enterprise. A number of properties are in foreclosures proceedings, with lenders seeking to accumulate.
The brothers reply
Terry Oved, an legal professional for Michael and Edward with Oved & Oved, denied the fraud allegations and solid them as a last-ditch effort by Steven to win a settlement from his brothers.
“Unsurprisingly, as soon as defendants uncovered the deadly flaws in plaintiff’s criticism, plaintiff repurposed them with sensational and demonstrably false allegations in a determined try and extract an undeserved settlement,” Oved mentioned in a press release. “However new packaging doesn’t change stale contents.”
Michael and Edward have but to handle the affidavit and amended criticism in courtroom. However for his or her half, they’ve additionally introduced in their very own peripheral allegations about Steven and his character.
“The unlucky context of this litigation is that Steven has dissipated no matter assets he as soon as possessed resulting from his properly and publicly documented playing habit, substance abuse issues, and affiliation with intercourse offenders,” Michael Ostad wrote to the courtroom.
Within the 2025 dissolution case, an legal professional for the brothers made allusions to alleged connections between Steven and disgraced actual property brokers Tal and Oren Alexander, who had been convicted on federal intercourse trafficking prices this yr.
(A spokesperson for Steve mentioned he has “no involvement in that matter — none to elucidate, none to reply for, nothing,” and that the allusions don’t have any connection to the litigation.)
“We have now gotten textual content messages from ex-girlfriends speaking about how she will be able to’t get in contact with him as a result of he’s on a drug-fueled bender,” Brian Belowich, an legal professional for the brothers, mentioned in oral argument final August. “There are all types of issues that affect the enterprise and the flexibility for these companies to proceed working.
The Ostad firms paid greater than $200,000 to “exhausting cash” lenders on Steven’s behalf, the brothers mentioned in a criticism.
Oved, whose agency is representing the brothers within the new case, pointed to Steven’s previous authorized bother.
“As a defendant in over 20 civil lawsuits coupled with continual unpaid obligations and repeated monetary defaults, Steven’s disastrous observe file exposes the true motivation for his newest submitting which the courtroom will acknowledge and reject,” he mentioned in a press release.
Steven’s authorized crew argues that any character allegations, true or false, don’t straight relate to his declare to a part of Flatiron.
“Steven’s character will not be the query; their conduct is,” Jacobs mentioned in a press release. “This was by no means a declare on their cash. It’s an accounting for his.”
However they do flip up the warmth on a case that had already change into bitter.
“They don’t like Steven. Perhaps good purpose, possibly not, I don’t know,” the decide within the Ostad’s dissolution case instructed attorneys. “Nevertheless it has nothing to do with the statute and the usual to point out — to get a judicial dissolution of the businesses.”
It will likely be as much as that very same decide to wade by way of what’s a distraction and what’s price contemplating. And the Ostad brothers shall be left to choose up the items of their dispute.
Learn extra
“Bags of cash”: Steven Ostad accused brothers of exclusion and mismanagement
Ostads v. Ostad: Rent-stabilized distress frays family ties
Witness tampering claim fuels Ostad brothers’ real estate feud
