The relationships demonstrate the mayor’s enduring friendship with the brothers, who broke federal law a decade ago and have since been involved in culinary ventures that have deprived the government of tax revenue.
Adams has come under fire for other relationships with people with past transgressions – he angered LGBTQ people after appointing a former lawmaker with a history of anti-gay stances to a high-paying concert at City Hall . His team made an opening earlier this year that would have helped a longtime friend who was kicked out of the state senate. And he appointed a deputy mayor for public safety who was an unindicted co-conspirator in a federal corruption case.
Each month, the State Department of Taxation and Finance publishes a list of top 250 recent tax offenders. In July, Ofshtein came in at 78th, climbing 23 places since April.
Ofshtein owes $1.3 million in unpaid withholdings and sales taxes from Brooklyn restaurants that at one point straddled the political realm.
In 2019, a popular Park Slope brunch spot called Woodland became a flashpoint between several politicians who complained it was too rowdy, and Adams, who called the reviews racist because the restaurant’s clientele was mostly black.
At the time, Brooklyn attorney Frank Carone — who would become Adams’ chief of staff at City Hall — was representing the restaurant in a related dispute with the State Liquor Authority.
At the time, Ofshtein and the brunch had already racked up nearly $400,000 in unpaid taxes, according to the Finance Department’s July list (the restaurant also filed for bankruptcy in 2015).
In the years since, Ofshtein has roughly doubled that outstanding tab, even though the restaurant closed in 2020. The most recent warrant was issued three months ago.
The mayor’s spokesman, Fabien Levy, said Adams was unaware of the unpaid taxes and was supporting all manner of businesses in the city’s hospitality industry. The mayor visits the city’s restaurants, bars and music venues to promote the city’s hospitality industry, and these stops do not indicate that he is associated with any particular venue or operator, a- he declared.
Businesses and individuals land on the state’s delinquent list after failing to pay and ignoring government collectors, according to the state. Once a payment is missed, interest begins to accrue. Finally, the state can seize wages or requisition a company.
On March 2, for example, the tax department arrived at 327 Gold St. in Brooklyn and seized Forno Rosso, an upscale pizzeria owned by Ofshtein that owed more than $400,000 in unpaid taxes, according to a report by THE CITY.
The restaurant, where Adams attended a ribbon cutting in 2014, helped Ofshtein get onto the delinquent taxpayer list, despite receiving more than $550,000 from the Paycheck Protection Program, a federal initiative designed to helping small businesses weather the pandemic. Ofshtein cited Covid as the main reason for the restaurant’s debt and closure.
In an email to POLITICO, the Brooklyn attorney said he entered into a payment plan with the state more than a year ago, but reimbursing taxes is difficult due to the steadily increasing interest.
“Liabilities are not the major issue, they would have been paid for a long time ago,” he wrote. “The problem is interest and penalties.”
The mayor’s friends
The Petrosyants brothers can often be seen around town with the mayor at nightlife spots, including Zero Bond, the pricey members-only club where Adams hosted his election victory party.
They also have deep ties to the two restaurants with an unpaid tax debt.
In 2011, the brothers were indicted on 11 federal counts for allegedly participating in a check cashing scheme involving medical billing companies. In 2014, the brothers both pleaded guilty to one count of conspiracy, each related to the alleged scheme.
Robert Petrosyants was convicted of a felony and sentenced to six months in prison and three years of supervised release, according to court records. Zhan Petrosyants was given five years probation, records show.
Prior to their sentencing, the family and associates wrote to the judge asking for clemency, and Ofshtein described Robert Petrosyants’ pivotal role in Woodland, court records show.
“Robert oversaw the construction and eventual operation of this business,” Ofshtein wrote in the sentencing letter. “He has always been and continues to be – to this day – an essential and valued manager… I trust him to manage all aspects of this business. Frankly, I don’t know what I would do without him.
Zhan Petrosyants, Ofshtein said, ran Woodland on nights and weekends, and also promoted the restaurant.
Additionally, Robert Petrosyants managed Forno Rosso, according to Ofshtein, and was listed as a guarantor on the restaurant’s lease.
Several public reports suggested that the twins also held stakes. That might have been a problem after their 2014 convictions — unless there’s been a pardon or some specific type of waiver, the state doesn’t grant liquor licenses to restaurants if an applicant or business partner has been convicted of a crime.
In 2013, before his sentencing, Robert Petrosyants listed himself as the owner of Woodland in a $1,000 donation to Adam Borough President’s campaign, according to a DNAinfo report.
But a lawsuit in 2016 alleged that Robert and Zhan Petrosyants held financial interests in Forno Rosso. The lawsuit accused the brothers and Ofshtein of mishandling an investment, and part of the case is still ongoing.
Woodland and Forno Rosso are also among several restaurants in Brooklyn and Manhattan that a company called American Standard Hospitality Group claims to operate.
A since-deleted page on the company’s website from 2018, American Standard Hospitality Group was described as the company of the Petrosyants brothers, according to a screenshot posted by Atlantic Yards/Pacific Park Report.
“The Journey of the Petrosyan [sic] brothers – Robert and Johnny – is inspiring. They used the ingredients for success in sufficient quantity to prepare the American Standard Hospitality Group,” the page says, noting that Woodland and Forno Rosso were the first two restaurants to be owned and operated by the brothers.
Ofshtein has publicly stated, in court documents and in liquor board submissions, that he is the sole owner of Woodland and Forno Rosso. His law firm was also listed on American Standard Hospitality Group registration documents when it was founded in 2015, according to state records.
Connections to La Baia
American Standard Hospitality Group, which bills itself as an investment and brand management firm, also listed Osteria La Baia among the handful of restaurants it manages, according to an archived version of its website – marking another link to the biggest Democrat in town.
Adams once broke bread in La Baia with former Democratic Governor Andrew Cuomo and took a bite out of New York Times columnist Maureen Dowd as she gathered string for a profile. In March, Adams paid the restaurant $1,000 for a re-election fundraiser, campaign finance records show.
During dinner and drinks with former Democratic mayor Bill de Blasio in La Baia in February, POLITICO observed Zhan Petrosyants sitting nearby.
Adams said he met the brothers around 2014 and developed a close friendship with Zhan Petrosyants in particular, whom he mentored. A person’s background, he noted at a press briefing earlier this year, shouldn’t just define them.
“Yes, I will speak with people who have tripped and fallen,” Adams said at the time. “Because I’m perfectly imperfect, and this is a city of perfectly imperfect people.”
According to a liquor license application, La Baia is solely owned by Shahmuradyan, who is also the mother of Robert Petrosyants’ children. Public records show she owns other restaurants claimed by American Standard Hospitality – including a downtown Caribbean restaurant run by Robert Petrosyants – and she used an email address associated with the organization in the documents. of candidacy.
In June 2020, Shahmuradyan told the liquor board that she does not share ownership or any business partnership with Ofshtein, although the latter still provides her with legal advice and works for her companies on occasion.
“At one point, Mr. Ofshtein and I discussed owning restaurants together, however, I decided that I didn’t want to associate with Mr. Ofshtein, or anyone else for that matter,” said she writes.
Shahmuradyan did not respond to a request for comment. Zhan Petrosyants referred POLITICO to Ofshtein. And questions addressed to Robert Petrosyants, sent to both Shahmuradyan and Ofshtein, did not receive a response.
Shahmuradyan also wrote that she had no formal business ties with either Petrosyants brothers. For the liquor board, this would be an important detail, as the state considers the applicant’s spouse’s criminal history when distributing licenses.
Robert Petrosyants and Shahmuradyan sometimes gave government officials a contradictory account of their domestic life situation.
In application documents filed with the liquor board on October 1, 2019, Shahmuradyan declares himself to be single. But later that month, Robert Petrosyants filed an unrelated document with the state Supreme Court certifying that he was her husband.
Eight months later, Shahmuradyan wrote in an affidavit that although she lives with Robert Petrosyants and they have three children together, they are not married.
Julian Shen-Berro contributed to this report.