Judge Rejects Mark Harounian's King Arguments

A New York state judge had some harsh words for a Great Neck real estate scion who claimed he could take money from his family’s business to live as a “king or better.”

Judge Joel Cohen recently issued a decision after a trial in an 11-year legal battle between Mark Harounian and his sister Mehrnaz Homapour over distributions and payments from the family’s Manhattan real estate portfolio.

Cohen said Harounian “demonstrated a brash willingness to skirt state and federal law and repeatedly mislead state and federal government authorities, as well as family members, both as to his income and in the conduct of his business.”

The New York state judge awarded $16.5 million in damages to the family LLCs, in which Homapour holds a minority stake. Homapour had sought $48 million from Mark, but Cohen said that number contained math errors.

The award will be reduced by a credit given to Harounian for running the family business equal to 6 percent of gross rents for certain family LLCs managed from 2012 to 2022.

Homapour is owed an additional $5.28 million in previously unpaid distributions from the family LLCs. Harounian has to authorize the payments.

Mark Harounian is the son of Jacob Harounian, who immigrated from Iran and made his fortune in the rug business in the 1970s before building his own Manhattan real estate portfolio in the 1980s, made up primarily of multifamily walkups. Harounian the younger took over management of the family businesses, while his sisters took a passive role. By 2014, the family controlled about 30 Manhattan rental properties valued at $500 million.

Homapour sued her brother in 2015, alleging Harounian used the family real estate as a personal piggy bank, buying Picassos, luxury cars and vacations and paying for multiple mistresses. Homapour accused her brother of defrauding her into signing operating agreements which allowed him to enrich himself.

But last year the judge ruled that Homapour failed to demonstrate fraud. An appellate court reinstated the claim, allowing Homapour to bring the fraud claim to trial. At the trial, Cohen rejected the fraud claim, stating that Homapour failed to prove by clear and convincing evidence that her brother tricked her into signing the operating agreements.

Still, Cohen found that her brother diverted funds from his family real estate companies to pay for his lifestyle, including payments tied to extramarital relationships, a bar mitzvah and personal properties. Cohen said he found Harounian “bracingly candid,” but sometimes evasive.

Cohen also found that Harounian engaged in a “blatant scheme” to get around rent regulations by inflating invoices.

Harounian believed the money he took from the family LLCs as his birthright as the only son of a “staunchly patriarchal father,” Cohen noted in his September decision. Cohen said the scion testified that he believed he could “take whatever he needed to live his life,” and to do so, “as a king or better.”

But Cohen said that while cultural and familial practices may, in part, explain Harounian’s conduct, “they do not excuse disregarding the governing operating agreements.”

“The Court’s decision made clear he was no king, his fiduciary duties were not a crown, and the family companies were not his kingdom,” said Terrence and Darren Oved of Oved & Oved, who represented Homapour. “This is a victory not only for our client, but for every minority member in a closely held New York State entity.”

But Harounian’s lawyers at Pryor Cashman suggested they were on the winning side of the decision, noting that Cohen rejected the “plaintiff’s outrageous and unsupported demands to rescind the operating agreements.”

“The plaintiff does not deserve any recovery, and the very modest award she did receive is the result of errors and oversights elsewhere in the decision, which we will address on appeal,” said William Charron of Pryor Cashman.

A judgment has not yet been entered on the docket.

Mark Harounian has another ongoing legal battle with his family. His father, Jacob, brought a suit against him in 2018, alleging his son had confessed to stealing $3 million in family funds.

“I had asked God to give me a good son, but … I apparently made a mistake when I was asking God,” the patriarch said through a Farsi translator at a 2024 hearing. “Instead of giving me a good son, he gave me this guy.”