AT 28, he bested the U.S. government in a case against the
Selective Service that went all the way to the Supreme Court and set a legal
In his 40s, he headed investment partnerships that made a run for two
beleaguered retail giants. Even though the partnerships didn't end up with the
companies, they got more than $1.6 million for their efforts.
Now at age 60, Robert I. Toussie, one of the largest developers in Suffolk
County, may be in the fight of his life, waging battles on several fronts.
First, he is defending himself against more than 200 minority homeowners in
Suffolk County and on Staten Island who are suing the Brooklyn-based developer
and his son, Isaac, 30, charging that they conspired with lenders, lawyers and
appraisers to sell the families shoddily built, overpriced homes. Both father
and son have denied the charges.
Last year, Isaac pleaded guilty to one count of making felony false
statements in a federal mortgage fraud scheme involving the homeowners' houses.
Investigators with the U.S. Department of Housing and Urban Development said
the scheme netted Isaac Toussie more than $20 million and was one of the
Island's largest housing scams in recent years. Isaac Toussie, who denies he
made anything close to that amount, is expected to be sentenced next month.
Robert Toussie wasn't charged. But the controversy over the HUD mortgage
fraud case prompted the Suffolk County Legislature to block the sale of $1
million of property the developer won at a county auction last May.
Responding to homeowners' complaints, the legislators expressed concern
that Toussie, frequently the auction's biggest buyer, would continue to
transfer some properties he won at auction to Isaac.
"I'm troubled by what's gone on here," Brian Foley (D-Blue Point) said last
August, adding that the county had to be careful whom it sold land to and how
it was developed.
Then last fall, the U.S. Attorney's office began investigating Robert
Toussie's sale of the 40-acre Chandler Estate in Mount Sinai after Newsday
reported he sold the property to the county and Brookhaven Town for $5 million,
despite five appraisals valuing the property for half that amount. The county
relied on a much higher appraisal supplied by Brookhaven Town to set the price
because Allan Grecco, who headed the county's Division of Real Estate, said the
developer would not sell the property for less money. Grecco, who engineered
the Chandler Estate sale while his private company did business with Toussie,
subsequently resigned under fire. Last week, in a letter to the county, Toussie
offered to repurchase the Chandler property from the county for $5.5 million.
For Toussie, the stakes are high.
His potential liability in the lawsuits and the Suffolk County
Legislature's blocking of his purchase of county property have put the future
of his local land-development business in question.
The county's action already has taken a toll, according to the $50-million
lawsuit Toussie filed against the Legislature, County Executive Robert Gaffney
and Grecco less than two months after the blocked auction sale.
"The Legislature's decision caused substantial damage to Robert Toussie's
reputation in the business community, as purchasers of land he had previously
acquired sought to delay or cancel contracts with him in light of Suffolk
County's decision," alleges the lawsuit, which is pending.
But Toussie has been in tough spots before and prevailed.
In the early 1970s, the U.S. Attorney's Office investigated Toussie and his
brother, Samuel, after minority homeowners complained of subpar construction
and deceptive sales practices. However, after a two-year investigation, the
government decided not to file any charges against the Toussies, citing
Toussie shrugged off the inquiry at the time.
"It is very customary to be investigated by any lending institution," he
told Newsday in 1973, referring to the Farmer's Home Administration, which
provided mortgages to the minority homeowners who complained to government
And Toussie already has begun to strike back this time. Through his
lawyers, he has insisted that homeowners and lawmakers are wrong in lumping his
business operations with his son's. Attorney Matthew Fishbein, of Covington &
Burling's Manhattan office, told the Suffolk Legislature's Ways and Means
Committee, "Robert Toussie stands separate from his son."
And Toussie has denied building any of the families' homes or any homes at
all since the 1970s.
"Isaac Toussie was the builder of the houses, not Robert," said C. William
Phillips, another Covington & Burling lawyer who represents Robert Toussie.
"He's not a home builder; he hasn't done that in decades."
But his lawyers have also acknowledged that the developer did transfer some
of the land he bought at auction to his son, and that Robert Toussie gained
financially from such transactions.
"I think it is fair to say that Robert Toussie has benefited in part from
the business of Isaac Toussie, yes," Fishbein told the legislative committee.
In previous court cases, Toussie has shown himself to be a formidable
opponent - something the U.S. government witnessed firsthand. It sued him in
1967, eight years after Toussie refused to register with the Selective Service
when he turned 18.
Toussie, who was raised as a pacifist, said his conscientious beliefs
against war prevented him from signing up for the draft. He argued that by the
time the government got around to suing him, the five-year statute of
limitations had run out on any offense.
The government unsuccessfully countered that military law imposed a
"continuing duty to register, which would last until age 26." It contended that
the clock didn't start ticking on the five-year statute of limitations until
then - an argument the Supreme Court turned down by a 5-to-3 vote.
Toussie's defense produced not only a victory - and a front-page story in
The New York Times on March 3, 1970 - but also set a legal precedent.
In 1996, a Wisconsin federal circuit court judge wrote in another
statute-of-limitations case: "Toussie remains the leading case on defining the
scope of the continuing offense doctrine."
By several measures, Robert Toussie has been a brilliant scholar and is
considered an astute businessman today. He graduated from Lafayette High School
in Brooklyn at 15. He went to work because he couldn't afford college. By
1961, when he was 20, he owned eight children's clothing companies, including
Merry Mites, a well-known manufacturer. After selling the companies in the late
'60s, he enrolled in Columbia University. After just six months of
undergraduate work, he was allowed to skip to the MBA program, the university
confirmed. He earned an MBA in 1969 at the age of 28.
His holdings make him one of Long Island's largest and most influential
Three years ago he and Isaac told Newsday they owned more than 5,000
parcels throughout Suffolk County, ranging from one acre to 100 acres of
buildable land. Beginning in the 1970s, Toussie started accumulating land on
Long Island, he said, increasing his land holdings during weak real estate
markets, particularly in 1974, the early 1980s and the early 1990s, when he
often bought foreclosed subdivisions from banks. The extent of Robert Toussie's
current holdings aren't known, because he declined to be interviewed and all
his companies are private.
Robert Toussie is involved with many companies - at least 19 are registered
to his Brooklyn address, with four recently dissolved for nonpayment of taxes,
according to the New York Department of State.
One of the key issues in the homeowners' lawsuit - as well as Toussie's
dispute with Suffolk County over his auction purchases - centers on his
lawyers' assertion that he is a large land owner, but not the builder and
seller of the houses sold to homeowners who are suing him.
Documents obtained by Newsday show that practically all the companies that
sold homes to the homeowners list Robert Toussie's Manhattan Beach address in
their state filings.
According to Brookhaven Town documents, either Robert Toussie or two
companies he heads applied for 70 building permits between 1996 and 1999, many
of them for the houses owned by the homeowners filing suit. In addition, an
examination of more than 100 county land transfer documents involving the
homeowners showed that Robert Toussie often transferred the property from
himself to one of the companies he heads on the same day the company sold a
completed house to the homeowners.
That was the case with Maxine Wilson, a plaintiff in the homeowners'
lawsuit, and her husband, Terry. On the same day they closed on their house in
Gordon Heights, Aug. 8, 1997, Robert Toussie transferred the parcel from
himself to his company, David Park Estates, which in turn sold the house to the
Wilsons for $',000. Of the sum, the Wilsons' mortgage documents and copies of
canceled checks show that David Park Estates received almost $93,000, and
another company Toussie heads, Greenstar Enterprises, received $40,000.
In other similar transactions, homeowners' documents showed that Robert
Toussie received large chunks of money from home sales in Gordon Heights and
other areas in Suffolk County.
Of the nearly $161,000 that George and Evelyn Rodriguez borrowed to
purchase a home from Toussie's David Park Estates in 1997, $60,000 went to
Homeowners who wanted extras for their houses, such as dishwashers, showed
Newsday copies of canceled checks made out to Robert Toussie for those items.
Cassandra Seward, who with her husband, Floyd, purchased a home in Yaphank
from Toussie's Easy Home Program in 1999, said that if they wanted anything
additional, their contractor told them "we had to write out the checks to
Robert Toussie's signature also appears on some of the homeowners' deeds.
Both his signature and identification as the president of the Easy Home Program
appear on the Sewards' bargain and sale deed, a form commonly used to transfer
ownership from the seller to the buyer.
Lawyers for the homeowners suing the developers assert that both Toussies
were involved in the home sales. "The complaint pleads a case that with respect
to all the counts, Isaac and Robert Toussie were equally liable," said
attorney Paul D. Young of Milberg, Weiss, Bershad, Hynes & Lerach in Manhattan.
Phillips, Toussie's lawyer, responded, "These are issues that are involved
Phillips refuted assertions that the homeowners' documents indicated that
Robert Toussie was the builder of the homes in question, adding, "We dispute
the premise of the questions and intend to litigate them vigorously."
While several developers who know Toussie declined to comment, two
businessmen familiar with the developer offered different perspectives.
"He is considered by builders to be a tough competitor," said Robert
Wieboldt, executive vice president of the Long Island Builders Institute, who
said that Toussie specializes in housing on either side of $200,000.
"I did business with Bob Toussie 25 years ago and I will never do it
again," said John Kanas, chief executive of Melville-based North Fork Bank. He
Phillips countered, "Robert Toussie is surprised to hear that Mr. Kanas
apparently feels this way, particularly since North Fork Bank has repeatedly
solicited business from him over the years."
Toussie has displayed toughness for many years. In the late 1980s, he and
two investment groups he headed launched a hostile takeover of New York-based
retailer and former toy-train maker Lionel Corp., which owned the Kiddie City
toy stores; and Heck's Inc., a West Virginia-based discount chain. Both stores,
now defunct, were being hammered by competitors at the time.
Lionel's board fought the Toussie-led group to a standstill agreement that
paid him and his partners $600,000. A Discount Store News report at the time
said the takeover fight Lionel waged against Toussie cost the company its
entire profits in 1989.
Phillips, Toussie's lawyer, responded: "Lionel management's own
intransigence contributed substantially to the costs, both to the company and
to Mr. Toussie, who was also the company's largest shareholder."
The Toussie group dropped its Heck's bid in 1987 after the company said it
wouldn't meet quarterly income projections. The group later sued the company
for $1 million in expenses and interest. "The litigation was satisfactorily
resolved in Mr. Toussie's favor," Phillips said.
Like many successful businessmen, Toussie is known for acquiring expensive
things as well as sharing his wealth with charities.
Several people who have had dealings with him noted the developer's
penchant for expensive suits, with the trademark handkerchief in the breast
pocket. And they pointed to his taste for expensive cars - he owns a 2001
Jaguar; 1998 and 1989 Bentleys; and a 1989 Rolls-Royce, according to New York
State Department of Motor Vehicle records. A real estate agent said homes in
Manhattan Beach, where Toussie and his wife, Laura, live in a stone and shingle
house, average $1.5 million.
His charitable contributions in recent years include a $50,000 donation
last year to the New York Presbyterian Hospital-Weill Medical College of
Cornell University in Manhattan; a $10,000 contribution in 1999 to Babylon Town
toward a park's refurbishment, and a $1,000 donation that same year to the
Guide Dog Foundation for the Blind in Smithtown; a $10,000 donation to Hatzolah
ambulance service in Brooklyn in 1998, and a $500 donation that same year to
the Correction Officers Benevolent Association in Manhattan.
And, Phillips added, his client has shown concern for minorities over the
Mr. Toussie "is proud of his role of being among the first to integrate a
large factory in Alabama in 1962," Phillips said. "Decades later, his son Isaac
became the pre-eminent seller of houses to minority families on Long Island,
further assisting in the integration of towns and townships all over Long
But an NAACP-Toussie partnership, which was formed in the 1970s to build
affordable subdivisions in Brookhaven, went sour. The alliance fell apart after
homeowners who bought other Toussie homes complained of such things as shoddy
workmanship, said Gordon Heights resident Elsie Owens, 73, a longtime
Phillips disputed that account, saying that Toussie stopped building only
after his contracts expired.
"These were fine houses," Phillips said. "Indeed, for years Mr. Toussie and
his family themselves lived in one of the identical houses built for the
OTHER TOUSSIE ENDEAVORS
Robert Toussie has been involved in many private local development companies,
Chandler Property Inc.
(previously known as Toussie Family Enterprises Ltd.)
David Park Estates Inc.*
Delson Equities Corp.
East Coast Land
Easy Home Program Corp.**
Greenstar Enterprises Inc.
Marconi Realty Ltd.
(registered to his address but in someone else's name)
R.I. Brookfield Corp.
R.I. Boyle Corp.
R.I. Camelot Homes Corp.*
R.I. Miller Place Corp.
R.I. Monterrey Oaks Corp.
R.I. Paulis Corp.
R.I. Ridge Green Corp.
R.I. Rolling Hills Corp.
RIHB Development Corp.
Rod Staten Corp.
Staten Sketch Corp.
Toussie Group Ltd.
Your Long Island Home Corp.
SOURCE: New York Department of State and Dun & Bradstreet