San Francisco City Attorney Dennis Herrera sued a Peninsula couple Thursday who he alleges lied nearly 20 years ago to qualify for an affordable condominium in downtown San Francisco and then rented it out or used it as a pied-a-terre despite owning a $2.8 million house in Redwood City’s Emerald Hills neighborhood.

The lawsuit, the latest in a series of actions the city has taken to crack down on people who abuse the city’s below-market-rate housing program, alleges that in 1999 Caroline Novak failed to disclose that she owned a home in the city of San Mateo when she applied to buy an affordable condo at 300 Beale St. for $178,500. Owning property would have disqualified Novak from the below-market-rate program, which is administered by the Mayor’s Office of Housing and Community Development.

Over the next 19 years Novak, and her husband, co-defendant Igor Lotsvin, violated the city’s housing laws — at times illegally renting out the condo and at times using it as a pied-a-terre, the lawsuit charges. The couple also allegedly leveraged the unit as security for over $1.5 million in loans and lines of credit.

Herrera is seeking a court order preventing the couple from owning the unit in violation of the law and requiring them to sell the property to a new qualified low-income owner. He is also seeking civil penalties of up to $2,500 per violation of the state’s unfair competition law and up to $1,000 per violation of the city planning code, which could potentially add up to hundreds of thousands of dollars.

Novak and Lotsvin are managing partners and co-founders at Sage Rhino Capital in Menlo Park, a financial advisory firm. A receptionist at the company — Sage Rhino’s motto is “intellectual honesty” — said that neither Novak nor Lotsvin were available to comment.

The case is the 22nd so far in Herrera’s investigation into affordable-housing fraud, which has resulted in three lawsuits and 18 settlements that have totaled $3.3 million. The investigation, which is being conducted with the mayor’s housing office, has resulted in 21 below-market-rate housing units being converted to their original purpose: providing an affordable home for first-time San Francisco homebuyers.

“The city’s affordable housing program is not an investment scheme to be manipulated by would-be real estate moguls looking to profit off the housing crisis,” said Herrera in a statement. “It’s about giving hard-working San Franciscans a chance to stay in the city they love.”

J.K. Dineen is a San Francisco Chronicle staff writer. Email: jdineen@sfchronicle.com Twitter: @sfjkdineen