The connections demonstrate the mayor’s enduring friendship with the brothers, who ran afoul of federal law a decade ago and have since been involved in culinary ventures that deprived the government of tax revenue.
Adams has come under criticism for other relationships with people having past transgressions — he angered LGBTQ people after appointing a former lawmaker with a history of anti-gay positions to a high-paying City Hall gig. His team made an overture earlier this year that would have helped a longtime friend who was expelled from the state Senate. And he named 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 releases a list of the top 250 recent tax delinquents. In July, Ofshtein came in at No. 78, climbing 23 spots since April.
Ofshtein owes $1.3 million in unpaid employee withholding and sales taxes stemming from Brooklyn restaurants that, at one point, overlapped with 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 critics racist because the restaurant’s clientele was largely Black.
Back then, Brooklyn lawyer Frank Carone — who would go on to become Adams’ chief of staff in City Hall — represented the restaurant in a related dispute with the State Liquor Authority.
At the time, Ofshtein and the brunch spot had already accrued nearly $400,000 in unpaid state taxes, according to the finance department’s July list (the restaurant had also filed for bankruptcy in 2015).
In the years since, Ofshtein roughly doubled that outstanding tab, even as the restaurant closed in 2020. The most recent warrant was issued three months ago.
Mayoral spokesperson Fabien Levy said Adams was unaware of the unpaid taxes, and that he supports all manner of businesses in the city’s hospitality industry. The mayor visits restaurants, bars and music venues around the city to promote the city’s hospitality industry, and that these stops do not indicate he is associated with any particular location or operator, he said.
Companies and individuals land on the state’s list of delinquents after failing to pay and ignoring government collectors, according to the state. Once a payment is missed, interest starts accruing. Eventually, the state can garnish wages or commandeer a business.
On March 2, for example, the tax department arrived at 327 Gold St. in Brooklyn and seized Forno Rosso, an upscale, Ofshtein-owned pizzeria that owed more than $400,000 in unpaid taxes, according to a report in THE CITY.
The restaurant, where Adams attended a ribbon cutting in 2014, helped land Ofshtein on the list of delinquent taxpayers, despite receiving more than $550,000 from the Paycheck Protection Program, a federal initiative designed to help small businesses weather the pandemic. Ofshtein has cited Covid as the main reason behind 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 that clearing back taxes is difficult because of constantly increasing interest.
“The liabilities are not the major issue, they would have been paid a long time ago,” he wrote. “The problem is the interest and penalties.”
The Petrosyants brothers can often be seen out on the town with the mayor at nightlife spots including Zero Bond, the pricey members-only club where Adams held his election night victory party.
They also have deep connections to the two restaurants with outstanding tax debt.
In 2011, the brothers were indicted on 11 federal counts for allegedly taking part in a check-cashing scheme that involved medical billing companies. In 2014, the brothers both pleaded guilty to one conspiracy count each related to the alleged scheme.
Robert Petrosyants was convicted of a felony, and sentenced to six months in prison and three years supervised release, according to court records. Zhan Petrosyants got five years’ probation, records show.
Before they were sentenced, family and associates wrote to the judge to plead for leniency, and Ofshtein described Robert Petrosyants’ central role at Woodland, according to court records.
“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 run every aspect of this business. Quite frankly, I do not know what I would do without him.”
Zhan Petrosyants, Ofshtein said, managed Woodland on nights and weekends, and has also promoted the restaurant.
In addition, Robert Petrosyants managed Forno Rosso, according to Ofshtein, and was listed as a guarantor on the restaurant’s lease.
Several pieces of public information have suggested that the twins also have held ownership stakes. That could have been a problem after their 2014 conviction — barring a pardon or a specific type of waiver, the state does not grant liquor licenses to restaurants if an applicant or a business partner has been convicted of a felony.
In 2013, before his conviction, Robert Petrosyants listed himself as the owner of Woodland in a $1,000 donation to Adam’s borough president campaign, according to a report in DNAinfo.
But a 2016 lawsuit alleged that Robert and Zhan Petrosyants held financial interests in Forno Rosso. The suit 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 Brooklyn and Manhattan restaurants that a company called American Standard Hospitality Group has claimed to operate.
A since-deleted page on the company’s website from 2018, American Standard Hospitality Group was described as the Petrosyants brothers’ company, according to a screenshot published by Atlantic Yards/Pacific Park Report.
“The journey of the Petrosyan [sic] brothers — Robert and Johnny — is inspiring. They have used the ingredients of success in right quantities to prepare the American Standard Hospitality Group,” the page said, noting the Woodland and Forno Rosso were the first two restaurants to be owned and operated by the brothers.
Ofshtein has said publicly, in court documents and in submissions to the liquor authority that he is the sole owner of both Woodland and Forno Rosso. His law firm also appeared on the registration documents for American Standard Hospitality Group when it was created in 2015, according to state records.
Connections to La Baia
American Standard Hospitality Group, which bills itself as an investment and brand management company, has also listed Osteria La Baia among the handful of restaurants it’s managed, according to an archived version of its website — marking another connection to the city’s top Democrat.
Adams once broke bread at La Baia with former Democrat Gov. Andrew Cuomo and took New York Times columnist Maureen Dowd for a bite while she was gathering string for a profile. In March, Adams paid the restaurant $1,000 for a reelection fundraiser, according to campaign finance records.
During dinner and drinks with former Democrat Mayor Bill de Blasio at La Baia in February, POLITICO observed Zhan Petrosyants seated nearby.
Adams has said that he met the brothers around 2014 and developed a close friendship with Zhan Petrosyants in particular, whom he mentored. A person’s past, he noted at a press briefing earlier this year, should not solely define them.
“Yes, I’m going to talk with people who have stumbled and fell,” Adams said at the time. “Because I’m perfectly imperfect, and this is a city made up 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 eatery managed by Robert Petrosyants — and she has used an email address associated with the organization in application documents.
In June 2020, Shahmuradyan told the liquor authority that she does not share ownership or any business partnerships with Ofshtein, though the latter still provides her with legal advice and she works for his companies on occasion.
“At one point in time, Mr. Ofshtein and I discussed owning restaurants together, however, I decided that I did not want to partner with Mr. Ofshtein, or anybody else for that matter,” she wrote.
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, were not answered.
Shahmuradyan also wrote that she has no official business ties with either of the Petrosyants brothers. To the liquor authority, that would be an important detail, because the state considers an applicant’s spouse’s felony history when doling out licenses.
Robert Petrosyants and Shahmuradyan have sometimes given government officials a conflicting account of their domestic living situation.
In application documents filed with the liquor authority Oct. 1, 2019, Shahmuradyan lists herself as unmarried. But later that month, Robert Petrosyants filed an unrelated document with the state Supreme court certifying he was her spouse.
Eight months after that, 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.