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 corporations 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 unhealthy conduct.
Steven Ostad has now mentioned his brothers have been conducting fraud with cash rents, clean checks and solid 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, liable to habit.
The allegations on each 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 data however was selecting to not file them,” Leo Jacobs, Steven’s lawyer, wrote in an announcement. “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 referred to as Tristar Administration Associates, and a lending arm referred to 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 best way was Steven, youthful than the 2 by greater than a decade.
The 2 sides went into mediation, and the difficulty fell off the courtroom’s calendar.
Then, earlier this yr, Steven filed a lawsuit claiming he had been unfairly reduce out of managing the true property portfolio, in addition to possession of Tristar and Flatiron. Steven had made a $6.5 million funding in Flatiron underneath assurances that he can be an element proprietor. He acquired 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 true property portfolio however not Flatiron.
Steven then switched attorneys, choosing brash chapter lawyer Leo Jacobs. He filed a number of incendiary paperwork and amended his grievance to give attention to alleged fraud schemes at Tristar.
Amram Tehrani, a former worker of the Ostad’s Tristar Administration Associates, instructed the courtroom that the corporate recurrently collected rents from business tenants throughout Manhattan, the Bronx and Queens in money. Though the properties have 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 pictures of stacks of money, which Tehrani claimed have 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, underneath Edward’s path, falsified tenant data and submitted them to the state. They used names and knowledge from tenants in different Ostad properties and solid signatures immediately.
An lawyer for Tehrani declined additional touch upon the allegations.
In his grievance, Steven describes additional fraud. Tenants who paid by examine, he says, have been instructed to submit checks with the recipient identify clean. That allowed staff to deposit the checks in no matter account they most well-liked.
“The defendants need this seen as a household disagreement as a result of it diminishes what the grievance alleges — monetary fraud inside an enterprise giant sufficient to hold a reported billion-dollar UBS credit score line,” Jacobs mentioned in an announcement.
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 best way the Ostads are capable of do enterprise. A number of properties are in foreclosures proceedings, with lenders trying to accumulate.
The brothers reply
Terry Oved, an lawyer for Michael and Edward with Oved & Oved, denied the fraud allegations and forged 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 grievance, plaintiff repurposed them with sensational and demonstrably false allegations in a determined try and extract an undeserved settlement,” Oved mentioned in an announcement. “However new packaging doesn’t change stale contents.”
Michael and Edward have but to handle the affidavit and amended grievance 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 because of his effectively 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 lawyer for the brothers made allusions to alleged connections between Steven and disgraced actual property brokers Tal and Oren Alexander, who have been convicted on federal intercourse trafficking fees 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 haven’t any connection to the litigation.)
“Now we have gotten textual content messages from ex-girlfriends speaking about how she will’t get in contact with him as a result of he’s on a drug-fueled bender,” Brian Belowich, an lawyer 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 corporations paid greater than $200,000 to “laborious cash” lenders on Steven’s behalf, the brothers mentioned in a grievance.
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 monitor file exposes the true motivation for his newest submitting which the courtroom will acknowledge and reject,” he mentioned in an announcement.
Steven’s authorized group argues that any character allegations, true or false, don’t immediately relate to his declare to a part of Flatiron.
“Steven’s character is just not the query; their conduct is,” Jacobs mentioned in an announcement. “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 develop into bitter.
“They don’t like Steven. Possibly good purpose, perhaps not, I don’t know,” the choose within the Ostad’s dissolution case instructed attorneys. “But it surely has nothing to do with the statute and the usual to indicate — to get a judicial dissolution of the businesses.”
It is going to be as much as that very same choose to wade by way of what’s a distraction and what’s price contemplating. And the Ostad brothers will probably be left to select 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
