T he two city inspectors upbraided the gray-haired man in a lavender button-down shirt as if he were an unruly teenager instead of one of Boston’s biggest landlords.
“Are you serious, Anwar?’’ inspector Iris Figueroa-Jones asked indignantly as she entered a squalid vacant apartment in one of Anwar N. Faisal’s buildings in Fenway last September. “What’s the problem, Anwar?’’
It was move-in weekend, that annual rite of late summer when tens of thousands of college students lug mattresses, flat-screen televisions, and 30-packs of beer into off-campus apartments all across Boston. It’s the U-Haul marathon, those exhausting but giddy days of settling in.
But three Berklee College of Music students weren’t feeling it. The young men had called the city in a panic after finding their new $3,800-a-month apartment near Northeastern University a wreck. Someone had punched gaping holes through doors and ripped them from frames. Kitchen cabinets were broken. Stale beer puddled on wood floors.
“Look at the house that you’re standing in, dude,’’ an exasperated student told Faisal in a confrontation witnessed by the Globe Spotlight Team.
Faisal promised to fix the doors, but those were the least of the problems. Inspectors that day deemed basement apartment 25B at 109 St. Stephen St. a firetrap.
Metal grates covered the outside of the windows. Smoke detectors dangled uselessly from the ceiling. In a fire, inspectors said, the only exit besides the front door would be through a sunken boiler room.
The city condemned the unit. Later, inspectors discovered something else. The city had authorized Faisal to have only 25 apartments in the building, not 26. This apartment was illegal.
What’s the problem, Anwar?
Here’s the problem.
Anwar Faisal is one of the giants of the student apartment rental business in Boston — maybe the biggest of them all. Few, if any, landlords own and rent more units to students; few, if any, have a longer rap sheet of offenses against state sanitary and building codes; and no one better exemplifies the city’s ineffectiveness at policing chronic offenders like him.
He’s gotten rich at this game, his business footprint growing with the rollicking expansion of the city’s student population. He lives in a secluded mansion in Brookline and can get away from it all on a private island off Fairhaven held in his wife’s name. His tenants, meanwhile, enjoy rather different amenities: doors without working locks; heat that doesn’t work; vermin of every vintage.
Yet despite Faisal’s odious record, which includes a federal conviction for mortgage fraud, he remains a powerful player in the rental market and is treated not as a pariah but as a partner by one large school with a shortage of dorms. Northeastern has paid Faisal millions in leases for much of the past decade to house its students in a dozen buildings just steps from the campus. A high-ranking community liaison from the university said he had no idea that other Northeastern students rent shabby, sometimes even unliveable, units directly from Faisal, often in the same buildings as the university-leased apartments.
A 62-year-old Gaza refugee whose best-known company’s headquarters has an awning with the black, white, and green stripes and red triangle of the Palestinian flag, Faisal owns more than 100 residential properties in Greater Boston assessed at about $150 million, a fraction of their market value. At a public hearing last fall, his lawyer said Faisal has more than 2,000 apartments.
Most of his properties are near Boston College, Boston University, and Northeastern. The majority of his customers in Boston, real estate agents say, are college students who find their way to his well-worn basement headquarters in Allston, where he operates Alpha Management Corp.
That makes Faisal something of an official greeter to each new wave of young Bostonians seeking their way in the city.
What he greets them with is, all too often, appalling.
The Spotlight Team set out to anatomize Faisal’s business and practices because his history as a landlord sums up what is deeply amiss in the student rental business here. A review of hundreds of city inspectional records and Boston Housing Court complaints, interviews with current and former tenants, and repeated visits to his buildings found an unmistakable pattern: violation after violation, real safety and health threats, and almost no meaningful penalties.
Among the Globe’s findings:
■ Faisal is one of the most complained about landlords who cater to students in Boston. Over the past decade, he and his companies have been defendants in at least 22 lawsuits and 11 criminal complaints at Boston Housing Court, according to court and city records. The city has also taken him to Housing Court at least 60 times to determine whether criminal complaints should be issued. And that doesn’t count a variety of lawsuits brought against him in superior and district courts.
■ In the same period, he has received 469 code enforcement tickets totaling $51,720 for violations outside his buildings, including overloaded dumpsters, loose trash, and failing to clear snow from sidewalks, according to the Inspectional Services Department, the city’s chief code enforcement agency. But Faisal has paid only $3,010. The city said it had no way to make him pay the so-called green tickets until 2010, when a new state law authorized cities and towns to transfer unpaid fines to landowners’ property tax bills. He ultimately got most of his unpaid tickets dismissed.
■ Faisal has been the subject of 16 complaints by tenants filed with the state attorney general’s office since 2008. Among the allegations: that he kept or mishandled security deposits, provided apartments littered with garbage and infested with rodents, and let overeager real estate agents sneak into residents’ locked units to show them to prospective tenants, including one agent who forced open a bedroom window from the fire escape.
In interviews with the Spotlight Team, current and former tenants described in almost Gothic detail the dangers and indignities they endured under Faisal’s roofs. Rats that scurried into their bedrooms. Bedbugs that left red welts on arms and legs. Leaks that pooled near electrical outlets. Radiators that raised temperatures above 90 degrees or turned cold.
“Everyone knows they’re slumlords,’’ said Kristin Recker, 25, who moved last September out of an Alpha apartment at 103 Gordon St. in Brighton, where she said Faisal failed to fix a broken stove and repair a mold-ridden shower.
But Inspectional Services had no record of Faisal — or any other Boston landlord — being convicted of a criminal violation of the state’s building and sanitary codes in recent years, and a spokeswoman for the judiciary said the courts have no way to track that.
Those codes, the state’s highest court has ruled, are intended to protect the public, not to punish offenders. As a result, prosecutions of Faisal and other chronic violators follow a familiar, kid-glove routine. The city takes the landlord to court. Weeks or months go by. The landlord finally makes the needed repairs. Case closed — until the next violation.
“We want to get the problems fixed, and putting somebody in jail doesn’t always accomplish those things,’’ said Inspectional Services Commissioner Bryan Glascock. “We try to be remedial rather than punitive.’’
The attorney general resolved many of the complaints it received about Faisal through mediation and filed no legal actions, according to a spokeswoman.
The penalties for Faisal’s mistreatment of tenants have, as a result, amounted to little more than administrative pinpricks. The stiffest fine the Globe found over the past decade was $335, which, the city said, went on his tax bill after he failed to pay a ticket in 2013 for an overloaded dumpster, loose trash, and graffiti on a building.
Tenants have sued Faisal repeatedly, but the occasional judgment ordering him to pay several thousand dollars in damages appears to have had little deterrent value.
There is no increasing scale of penalties for the third or the seventh or the hundredth offense. There is no tipping point in the system where Faisal’s right to operate as a landlord is called to question.
“This is America,’’ Glascock said. “Life, liberty, and property, I guess sort of in that order, are very well protected.’’
And so Faisal carries on, virtually unimpeded. Last year alone, he was hit with 69 green tickets totaling $5,805 and paid only $375 after successfully appealing most of them to the city and state, according to Inspectional Services . And those were only for code violations outside his buildings.
No landlord is better known to city inspectors, and no one’s repeat offenses are more frustrating to them.
Faisal declined to be interviewed, despite repeated attempts by the Globe. A woman who identified herself as his assistant explained that Faisal has been wounded by reporters who “usually only use the negative and not the positive.’’ Faisal did give an interview to a Boston Magazine writer last fall, for a substantial piece on his business practices. In the article, which tagged him the “Lord of the Sties,” Faisal rated himself an 8 or 9 on a scale of 10, for his skill as a rental property manager.
One of Faisal’s lawyers, Robert L. Allen Jr., told the Globe Faisal is a man of good works who provides scholarships to needy students abroad and was active in a mosque he helped establish in a former American Legion post he bought in Brighton in 2005 for $1 million. As for the conditions of Faisal’s apartments, Allen pointed a finger at student tenants.
“Just look at what the streets look like at the end of August and beginning of September — students come and go and just leave their belongings in the unit or on the street, leaving the landlord responsible to clean up,’’ he said in an e-mail.
“Inherently with student housing, there will be issues.’’
Avoiding tenant complaints
S tacks of case files in Boston Housing Court make it clear why Faisal is on a first-name basis with city inspectors and courthouse clerks.
His rental clientele is mostly college age, or young adults, with that demographic’s low bar for housekeeping and willingness to put up with a lot for an affordable rent.
Still, plenty do complain about problems ranging from major safety hazards to simple squalor.
Consider a small claims suit by Kelsey Hallman. A paralegal working in Watertown in 2012, she sued Faisal in housing court after she and a roommate were forced to flee five months after moving into a sweltering, bedbug-infested apartment that they rented for $1,495 a month at 1412 Commonwealth Ave. in Brighton.
The two women were alarmed from the moment they arrived. Four mattresses, left by previous tenants, were propped against the entrance of the building. They bore bright orange stickers with an ominous message from the city of Boston: “Caution — This May Contain Bed Bugs — Do Not Remove!’’
Despite their misgivings, they moved in and hoped that AlphaManagement’s fumigation of their apartment that month would prevent an infestation.
In the early winter, however, Hallman began suffering bedbug bites. She couldn’t sleep. She repeatedly called Alpha to fumigate again but was told the exterminator was busy. “Listen, I don’t know why you’re mad,’’ an Alpha representative said at one point, according to a letter she later wrote the company to break her lease. “It’s not like we created the bedbugs.’’
Three months after Hallman fled the apartment and sought damages, Camilla B. Duffy, an assistant clerk magistrate at Boston Housing Court, ordered Faisal to reimburse his former tenant nearly $2,500. It was a stinging decision and, for Faisal, a rare courthouse rebuke.
“It is apparent that the defendant had an unwritten policy of avoiding any complaints from the tenants,’’ Duffy wrote. Hallman “should not bear the burden of the defendant’s successful maneuvers in avoiding repairs.’’ Faisal threatened to appeal, prompting Hallman to accept $2,000 from him just to end the matter.
Bedbugs are hardly the only pests Faisal’s tenants endure.
Roxanngely Correa-Torres, who lived at 41 Bay State Road during her senior year at Suffolk University, is a named plaintiff in a pending 2012 class-action suit that accuses Faisal of charging illegal $250 fees to new tenants. Faisal said in a deposition that the sum covered his costs if tenants left behind bulky belongings that he had to dispose of. But the suit alleged the fees were, at best, security deposits by another name that legally had to be held in interest-bearing accounts but weren’t.
During an interview with the Globe, Correa-Torres matter-of-factly recounted seeing rats every couple of days in the $2,050-a-month apartment. Alpha provided rat traps and exterminated, she said, to no avail. Finally, she and her roommate wedged towels under their bedroom doors to keep the rodents out.
Around 3 a.m. one spring night, Correa-Torres said, she felt something move on her bed and realized in horror what it was.
“I screamed at the top of my lungs,’’ she said.
Although city inspectors have begun more than 70 criminal proceedings against Faisal over the past decade in housing court, the vast majority were dismissed at “show cause’’ hearings — with no complaints issued — after inspectors confirmed that Faisal had fixed the violations.
“We have sort of felt we were being used as his maintenance work order system,’’ Dion Irish, the city’s former assistant commissioner for housing, told the Globe two years ago. “It is a needless waste of city resources.”
Some Inspectional Services officials also say they have recently detected an improvement in Faisal’s property management.
The primary purpose of the sanitary code, the state Supreme Judicial Court ruled in 1966, is to prod property owners to fix violations, not to punish them. But Faisal and several other landlords have appeared to use that legal precedent to neglect their properties until enough tenants complain and the city takes the owners to court.
Only rarely does the judicial hammer fall. Housing Court Chief Justice E. George Daher made headlines in 1989 and 1992 when he sentenced two landlords in separate incidents to live in their Boston apartment buildings, rife with code violations, until they fixed the problems. But such actions are almost unheard of.
And nothing like that has ever happened to Anwar Faisal.
A questionable partnership
G iven that so much of Faisal’s business involves renting dilapidated, out-of-code, or even unsafe units to student tenants, one might think local colleges would be wary or worse.
But for one of the city’s largest schools, it is quite the opposite.
For much of the last decade, Northeastern has been one of his best customers, the Spotlight Team found. It has paid him millions in leases to house students because the university has a shortage of dorms.
Northeastern, which has transformed itself from a commuter school to a nationally known university, houses only 47 percent of its 15,941 undergraduates on campus, according to a Northeastern-commissioned housing report last year. Although Northeastern has built dorms over the past decade, it still houses a smaller percentage of its undergraduates on campus than several other large Boston schools.
Faisal has helped fill the void. Since 2004, he has bought a dozen buildings on St. Stephen Street, Hemenway Street, and Huntington Avenue, just steps from the campus gates. Northeastern currently rents apartments for 600 students from local landlords, Michael Armini, a Northeastern spokesman, told the Globe in an e-mail, and Faisal houses more than half of them.
Remarkably, Faisal has, as part of this lucrative relationship, been rewarded for the slovenly upkeep of his apartments. In an arrangement any landlord would covet, the university has renovated apartments it leases from him — at the college’s expense — when the units failed to meet Northeastern standards for student housing.
“Our first obligation is to our students, and there are times when we make investments to bring master-leased units up to Northeastern standards,’’ Armini said in the e-mail. “This is done regardless of who the owner of the unit is.’’
The result has been the creation of parallel worlds within Faisal’s dozen buildings. Sometimes on the same hallways.
Northeastern treats the apartments it leases from him like dormitories. Resident advisors supervise the students, and any needed repairs are promptly dealt with, according to the undergraduates. If a kitchen drain clogs or a smoke alarm malfunctions, students submit a work order request to Northeastern, and the school sends staff or tells Alpha to fix it.
“My roommate dropped an earring down the pipe,’’ said Elizabeth Joseph, a third-year student who lives in a university-leased apartment at 309 Huntington Ave. “They came here the next day.’’
In contrast, Joseph’s next-door neighbors, Michelle Kane and Jacqueline Violette, also third-year students, rent a $2,600-a-month apartment directly from Faisal and said they have struggled to get him to fix serious safety problems.
On move-in day, for example, they found a flimsy piece of plywood where a window pane had once been and broken glass on the floor. It took Alpha two months to replace the pane, they said.
Faisal’s bookkeepers rival his buildings staff for slovenly methods, they said. Six weeks after move-in day, Kane got an eviction notice under the door saying she had failed to pay the rent. Actually, her father’s check had cleared two weeks earlier. Kane showed the Globe a copy.
“I was crying hysterically,’’ she said. “This was the first time I lived off campus. I said, ‘How could they evict me? They still haven’t even provided us with the lease.’ ’’
Students in units that Northeastern leases from Faisal appear to pay slightly more each month than their counterparts who rent directly from him, but the difference seems to be well worth it.
One student in a three-bedroom, university-leased unit on Huntington said she and her two roommates each pay $8,730 for the eight-month school year, or $1,091 a month, excluding meal plans.
Three roommates who rent a three-bedroom apartment directly from Faisal on Huntington each pay a total of $12,800 for 12 months, or $1,066 a month.
Armini, the Northeastern spokesman, declined to say how much the school pays Faisal to rent apartments but confirmed it has totaled millions.
Northeastern has also helped funnel customers to Faisal.
The university website refers students seeking rentals to his properties and those of competing landlords. The listings, which are accessible by password to Northeastern students, include a disclaimer that the school has no responsibility for “any problems that may arise’’ with privately leased apartments.
And arise they do, at least for those in Faisal’s buildings.
The Spotlight Team recently surveyed students living in 40 apartments in six Faisal buildings on Hemenway and St. Stephen. Most of the students attended Northeastern. Some rented directly from him, and others lived in units leased by the university. The occupants of 37 apartments, or 93 percent, reported at least one significant problem, such as pests, mold, inoperable smoke alarms, and broken locks on apartment doors.
“I will never live in an Alpha building again,’’ said Alston Potts, a third-year engineering student at Northeastern. He lives with three roommates in a $3,975-a-month basement apartment at 109 St. Stephen St., across the hall from the Berklee students’ apartment that was condemned in September.
Although it was mid-December, Potts said he had to keep a fan on and the windows open; the temperature inside hovered around 85 degrees and the heat couldn’t be lowered. Mold spread across his bathroom ceiling. He reported it to Alpha after moving in, he said, but the landlord never responded.
Faisal has acknowledged the crucial role Northeastern plays in his business. “We have a good relationship with Northeastern,’’ he testified in a 2012 deposition. “And we want to maintain the relationship. And we need these kids to come back.’’
Some community leaders, however, have skewered the school for paying Faisal to house its students in buildings where he mistreats other Northeastern students and for bankrolling his renovations.
“They’re doing a disservice to their own students, and they’re promoting this kind of real estate exploitation,’’ said Richard Giordano, civic engagement director for the Fenway Community Development Corporation.
Matthew Brooks, a Fenway civic leader and Northeastern graduate who sits on the panel that helped develop Northeastern’s expansion plan last year, wrote fellow members in 2012 that he was “appalled that disreputable landlords signing leases with NU will be financially rewarded for their substandard housing.’’ Brooks didn’t name a specific landlord but told the Globe he was referring to Faisal.
Some Northeastern officials have also evidently grumbled about the costs of such housing to the school.
James Chiavelli, an official in Northeastern’s general counsel’s office, told a Fenway community activist in 2012 that the school’s maintenance of university-leased apartments is a “sore point on this side.’’
“According to our financial people, we lose money on every master-leased unit, in part because we have to bring them up to reasonable living standards and then to maintain them,’’ he said in an e-mail obtained by the Globe through a public records request. Chiavelli, who has since left Northeastern, did not name specific landlords.
Northeastern has leased private property for student housing in the Fenway since the early 1980s, Armini told the Globe in an e-mail. Many of those apartments, he wrote, have “been acquired by Alpha Management, though our involvement with the units long predates the ownership change.’’
The school promised the city in 2004 to try to phase out such leases within five years and build more dorms. The pledge came after students rioted near Symphony Road following the Patriots’ Super Bowl win, prompting neighbors to urge Northeastern to keep students on campus.
But the school hasn’t come close to keeping its promise.
Gerald Autler, a senior planner for the Boston Redevelopment Agency, the city’s chief planning agency, which signed the 2004 agreement with Northeastern, recently told the Globe that community fervor for phasing out such leases has declined. Autler reviews Northeastern’s development plans, including how it handles student housing.
He also knows first-hand what Faisal is like as a landlord. In 2007, Faisal took Autler and his then-fiancee, Laura Rosenfield, to housing court, claiming they owed $2,625 in rent after the couple broke their lease in the South End. The couple filed a countersuit accusing Faisal of providing an apartment infested with mice, mishandling their security deposit, leaving broken locks on lobby doors, and letting real estate brokers pester them, dropping in to show the unit without sufficient notice. Both suits were ultimately dropped.
Does Northeastern know how Faisal treats the students who rent directly from him?
“It’s never been brought to my attention,’’ said John Tobin, Northeastern’s vice president of city and community affairs, who stepped down from the Boston City Council in 2010 to become what he described as “the city councilor for Northeastern.’’
But it’s hard to see how Northeastern could be in the dark.
In 2008, two Northeastern roommates leasing a $2,100-a-month apartment from Faisal at 313 Huntington Ave. fled six weeks after they moved in because of a bedbug infestation. The students, who sued Faisal in housing court, said Northeastern hastily found them housing in another building — not the only time the school has rescued Faisal tenants.
Far from distancing itself from Faisal, Northeastern doubled the number of students in the units it leases from him from spring 2008 to fall 2013, according to annual reports the school files with the city.
A humble start to an empire
B y his own account and by any measure, Anwar Faisal is a remarkable American success story — the night watchman who ascended to the executive suite.
He was born in 1951 in the Gaza Strip, just two years after Israel and Egypt signed an agreement ending the first Arab-Israeli War, which displaced thousands of Palestinians. He spent his early life in a refugee camp.
After earning a college degree in Egypt, he moved to Massachusetts in the late 1970s, according to his deposition in a suit filed by tenants.
He earned a master’s degree in public relations from BU’s School of Public Communication in 1983. His thesis was titled “Arabian and Middle Eastern Images in the American Media.’’
In the paper, Faisal criticized what he characterized as the three most common stereotypes of Arabs: the “highly romanticized ‘Arabian Nights’ image’’; the “dirty, cruel terrorist’’; and the “super-wealthy, vulgar ‘Sheik.’ ’’
He argued that the American media fostered those stereotypes after the OPEC oil embargo of 1973, which sent gas prices soaring and provoked outrage in the United States. “No one seemed to point out that the Arabs were doing what American business people traditionally extolled: practicing capitalism,’’ he wrote.
Prejudice against Arabs is a theme Faisal returns to often when defending his business practices. At the condemnation hearing for the Berklee students’ apartment at Inspectional Services in September, Faisal sat next to one of his lawyers and glared at the two inspectors across the table who had deemed the apartment uninhabitable.
Referring to himself in the third person, he accused them of targeting him for personal reasons because he “doesn’t look like an American’’ even though, he said, he is a US citizen.
“He has an accent, and this is why — the reason he has to be punished,’’ Faisal said, his voice rising. “And he has a deep pocket. . . . Somebody coming from refugee camp, to build empire [of] real estate, should be punished . . . because his name is Anwar Faisal. He is not Josh . . . he is not Bob.’’
John Connors, court coordinator for the city inspection agency, dismissed the accusation. “You’ve always been treated fairly, with no distinction where you come from or what you do,’’ he said.
Faisal directed similar accusations at Paul Creighton Jr., executive director of the Allston Brighton Area Planning Action Council, in a long-running legal battle between the antipoverty agency and the landlord, according to Creighton.
For about 30 years, the agency has run a day-care center for the poor in the basement of the former Allston Congregational Church on Quint Avenue. In 2007, Faisal bought the church and promised to honor a five-year lease that the agency had with the prior owner. But several months later, Creighton said, Faisal reversed himself and said the rent would go up, ultimately to triple the amount.
The dispute led to a trial in Brighton District Court, where a judge ruled in 2011 that Faisal had acted in bad faith and barred any move to evict the day-care center.
During a break in the trial, Faisal, who set up an organization called the Palestinian Cultural Center for Peace in the church, approached Creighton and suggested the antipoverty activist had other reasons for opposing him.
“You don’t like me because I’m Palestinian,’’ Creighton recalled him saying.
Sitting in his storefront office, Creighton also recalled meeting with Faisal about the day-care center on a snowy day a few years ago. The setting was significant, said Creighton, and gave him a glimpse into Faisal’s early days in Boston and ambitions as a landlord.
The two men met at a six-story building at 1106-1110 Commonwealth Ave. Faisal had bought it in 2006 from his alma mater Boston University, which used it as a dormitory. Faisal knew the building well. He worked there as a security guard in the 1980s, he told Creighton.
Faisal also knew the building’s history. BU had bought it in 1977 from another real estate magnate, Harold Brown, the chairman and chief executive of the Allston-based Hamilton Co.
A generation ago, Brown was widely regarded as Boston’s most infamous landlord. He pleaded guilty in 1986 to bribing a city official for a building permit. But he has long since rehabilitated his public image and now has a real estate empire worth $1.4 billion and including 5,500 residential units, according to a Hamilton spokesman.
Now the Commonwealth Avenue building belonged to Faisal, and he boasted about the size of his growing portfolio. “He was second to Harold Brown and trying to get to be like him,’’ Creighton said.
Faisal founded Alpha Management in 1993. Alpha boasts on its website that it has “some of the best and most desired locations in Boston.’’
Alpha’s headquarters seem at odds with such superlatives: a basement office in a three-story house with peeling paint at 59 Linden St. in Allston. The house also serves as the headquarters of at least 15 other Faisal real estate corporations, according to the state secretary of state’s office. They include several entities named for his wife and four children.
While Faisal would not speak with the Spotlight Team, he did consent to an interview in November with a Northeastern journalism student, now a Globe correspondent, reporting for the campus newspaper. She questioned him about the woeful condition of apartments that he leases directly to Northeastern students.
Faisal escorted her into a sumptuous office in a Beacon Street building he owns in Brookline. He sat behind an elegant desk with claw feet, his framed degree in public relations hanging on the wall behind him.
He brushed aside Yelp reviews that excoriated Alpha Management. “We have thousands of tenants,’’ he said. “Less than a quarter of a percent of them give us complaints.’’
Yet he also said his large portfolio makes it difficult to account for all of his properties.
“How do you want me to check 5,000 apartments?’’ he said, using a figure more than twice the one his lawyer used at the September condemnation hearing. A former Alpha employee, who insisted on anonymity because he still works in real estate, said that under Alpha’s “stone age” bookkeeping system in the mid-2000s, workers kept track of rent payments by hand with check marks on spreadsheets.
Faisal didn’t “have the systems required to manage so large a real estate business,’’ he said.
Harold Brown, the man Faisal is said to have modeled his empire after, was more succinct.
“He doesn’t treat the tenants right,’’ Brown said in an interview, adding later: “He just doesn’t do anything.’’
A setback, and rapid recovery
I n 1994, just a year after he started Alpha, Faisal suffered what could have been a devastating personal and business setback. He was charged in US District Court in Boston with mortgage fraud.
Most of the case records have been destroyed, but the surviving documents indicate he pleaded guilty to four counts of making false statements to federally insured banks, a felony.
Faisal lied about having made down payments ranging from $20,000 to $31,300 to obtain four loans for condominiums on Queensbury and Faneuil streets, the purchase prices he paid, and his income, according to prosecutors.
US Attorney Carmen M. Ortiz has declined to discuss the closed case.
Federal sentencing guidelines recommended a prison sentence of 18 to 24 months and a fine of $4,000 to $40,000. But a judge sentenced Faisal in 1995 to only 10 months on probation, including six months of home confinement. Prosecutors cited his “substantial assistance,’’ according to court records, an indication that he provided evidence against others.
The fine was below the guidelines “because of the defendant’s inability to pay,’’ the records said.
If Faisal was broke in 1995, he would not be for long. Over the past two decades, he has acquired dozens of properties and leveraged them to buy more.
From 2001 to 2008, when banks granted huge loans to real estate speculators nationwide, Faisal received millions of dollars in mortgages from an array of lenders, including $40 million from Morgan Stanley and $15 million from now-defunct Bear Stearns.
If the rental properties he bought are described by tenants as chronically trouble-ridden, things are far more comfortable for him at home.
In 2008, he paid $6 million for a 1920 Colonial Revival mansion in Brookline and installed an enclosed swimming pool. A year later, his wife, Heiam J. Alsawalhi, bought an island with a 1972 Italian-style villa for $3 million in Fairhaven. The island is called Bella Vista — nice view.
Even out on sun-drenched, Nasketucket Bay, Faisal has allegedly flouted government rules. Just a few months after the purchase, the Fairhaven Conservation Commission filed the first of five enforcement actions by the town and state that accused the island’s owner of violating wetlands protection act regulations.
The allegations included placing fill in a roadway too close to a salt marsh and shellfish beds, building a concrete stairway to the beach, altering vegetation, and constructing a 100-foot gangway and 93-foot sea wall without permission.
The situation degenerated after a member of the Conservation Commission said she heard the town conservation agent refer to Faisal as a “towel head.’’ The commission member filed a complaint with the Massachusetts Commission Against Discrimination, which dismissed it last year.
Faisal also filed a discrimination complaint with MCAD after someone told him about the alleged slur. That case is pending.
Taking it all in stride
J ust a year before the Berklee students’ Fenway apartment was condemned, the city condemned another Faisal cellar apartment in his building next door, at 115 St. Stephen St. That time it was a Northeastern senior, Tim Granger, renting directly from Faisal, who had to scramble to find alternate housing.
The student’s father, Rick Granger, a Connecticut general contractor, recognized that the $1,200-a-month, roach-infested apartment flouted the state’s sanitary code — it had no windows, ventilation, emergency lighting, or working carbon monoxide detectors — and called Alpha to get out of the lease. Granger paraphrased an Alpha representative’s blunt response: “tough cookies.’’
So Granger complained to the city, which sent inspectors. Faisal, as it turned out, hadn’t gotten a certificate of occupancy for that unit either, according to city officials. Faisal ultimately refunded Rick Granger fully: first month’s rent, last month’s rent and a security deposit, totaling $3,670. And Inspectional Services opened criminal proceedings against Faisal in Housing Court.
Thus began the drill. Faisal hired contractors to bring the apartment up to code. It passed inspection. And as invariably happens after the city begins criminal cases against landlords, the agency filed a brief order to end the matter. “Nolle prosequi,’’ it said in Latin, we won’t prosecute.
“Unfortunately, the landlord took it as just another day at work,’’ the elder Granger said.
Faisal seemed to take the condemnation of the Berklee students’ apartment at 109 St. Stephen St. a year later in stride, too.
After fixing the doors and cabinets and building a clear pathway past the boiler room in case of a fire, Faisal got two young men to rent the place, even though the city says the unit is illegal — he is only authorized to have 25 apartments.
Conveniently, one of the tenants was Joseph P. Merullo Jr., who said he met Faisal through his father, a business associate, and worked as an administrative assistant at Alpha.
He initially said he and a roommate each paid $1,200 a month but later said Faisal actually charged him only $500 for rent.
Merullo, 20, didn’t know the apartment had been condemned when he rented it but that didn’t bother him, he said. He also acknowledged refusing to let inspectors in when they knocked on the door.
“It’s what I need,’’ he said of the apartment earlier this year. “It’s right next to the office. I’m a simple guy. It’s a place to sleep, eat my dinner, and take a shower.’’ Weeks later, he moved out after taking a job at another real estate firm.
With contributing reports from Globe correspondent Emma McGrath.