Los Angeles Lakers basketball player Kareem Abdul-Jabbar and his wife Habiba have filed a $14 million lawsuit against a former District developer and his wife, two area realty companies, several of their sales agents and mortgage and title companies in what the Abdul-Jabbars allege was a scheme to defraud the owners of 14 houses in Northwest Washington.
The Abdul-Jabbars' suit, the third to be filed in U.S. District Court here in the alleged scheme, concerns the 1982 sale of a house they owned at 1614 Myrtle St. NW, which had been occupied previously by members of the Hanafi Muslims.
One of the Hanafi Muslims arrested in the March 1977 takeover of the District Building, the B'nai B'rith headquarters and the Islamic Center told police he lived at the Myrtle Street house.
The other lawsuits involve sales of property at 4319 18th St. NW, 1710 P St. NW, 5129 Chevy Chase Parkway NW and 5226 Klingle St. NW, which were among the 14 properties cited by the Abdul-Jabbars. The sellers contend they were defrauded by the same alleged scheme.
The properties were purchased in 1981 and 1982 by D.C. developer Edgar A. Weisman and his wife Judith under financing arrangements involving an owner "takeback."
According to court documents and persons familiar with the transactions, Edgar Weisman usually told the sellers that he intended to make major renovations of the properties and then resell them.
The arrangements usually provided for the seller to receive a substantial down payment and to hold a second mortgage on the property for the rest of the sales price. That would enable Weisman to obtain a first mortgage on the property, which he usually described to the seller as "construction financing."
For example, on the P Street property, the sales price was $210,000. Edwin Peskowitz apparently received a $30,000 down payment, Weisman obtained a first mortgage of $144,000 and Peskowitz took back a note for $180,000, according to information compiled by Rufus S. Lusk & Son Inc.
According to the lawsuits, Weisman used the loan money he obtained to make the down payments and pay real estate agent commissions and legal fees, but he seldom did any renovation and "misappropriated" the rest of the funds.
Later, Weisman defaulted on the loans on the five properties, and the firms holding the first mortgages on the properties foreclosed.
Because the total of the first and second mortgages on each property was much greater than the selling price or assessed value of the property, the original sellers generally lost large amounts of money.
Weisman, who now lives with his wife in Thousand Oaks, Calif., recently filed for bankruptcy in Los Angeles, according to court documents. He listed liabilities of $40 million and assets of about $700,000. Robert Levin, the Weismans' attorney, said yesterday he had no comment.
Abdul-Jabbar and the other plaintiffs are seeking damages from the real estate firms, mortgage and title companies and, in some cases, attorneys, whom they allege conspired with the Weismans.