'Mystery buyer' is actually partner helping notorious Milwaukee landlord build new empire, city says

The so-called mystery buyer who tried to buy 123 properties owned or linked to Elijah Mohammad Rashaed — the notorious Milwaukee landlord the city is trying to chase out of town — is actually a Rashaed business partner who is helping him set up shop in Ohio, Milwaukee officials charge in new court filings.

"Rashaed has stated he intended to get out of the landlord business, but has been secretly building a new residential rental property business in the state of Ohio all along," assistant city attorney Kail Decker wrote in a motion urging that Rashaed's Milwaukee holdings be effectively placed in receivership.

"The fact that (Rashaed and companies linked to him) have acquired properties in Cincinnati and John Harrison's company, Affordable Realty, is located in Cincinnati is not a coincidence," Decker wrote.

The person helping Rashaed gain a foothold in Ohio, John "J.J." Harrison, in February offered to buy 123 Milwaukee properties owned by Rashaed or companies linked to him, Decker wrote.

One of the properties purchased in Cincinnati is already on the radar of that city's health inspectors after a child who attended a day care in the building tested positive for lead poisoning. The city plans to board up the apartment used by the day care unless the lead paint problem is resolved.

The offer to buy the Milwaukee properties came in hours before Milwaukee County Circuit Judge Glenn Yamahiro was expected to decide whether to place Rashaed's Milwaukee holdings under the control of a property manager. The manager would run all aspects of the business, which includes more than 160 properties, and collect rental income and use the funds to manage and repair the Rashaed properties. Yamahiro later rejected the buyer.

Decker noted that Harrison filed organizing documents with the Ohio regulators to form two limited liability companies linked to Rashaed, who currently resides in West Palm Beach, Fla. Harrison provided his business address and company name as the return address on the documents, Decker wrote.

"The appearance of this out-of-state buyer with no explanation of how the offer came to be received ... was looked upon with skepticism by both the city and the court," Decker wrote. "However, after further research, the evidence indicates that Mr. Rashaed and Mr. Harrison are business partners."

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At the time, Rashaed's lawyer, David Halbrooks, told Yamahiro that he had no knowledge of Harrison or his background. He later said that he knew of no links between his client and Harrison.

Halbrooks responded to Decker's latest filing by calling the claims "fantastic falsehoods" and asking Yamahiro to seal Decker's motions. Halbrooks argued in court filings that Decker's claims "will be proven false" and "are at the very least slanderous."

In a brief interview Friday, Halbrooks urged a reporter not to post or publish anything about Decker's claims until after Monday when a hearing on the city's request that Rashaed lose control of his properties is heard.

"Certainly, Mr. Harrison is not a public person," Halbrooks said, an apparent reference to libel laws that set a high bar for a public person or official to win a libel claim.

Halbrooks said his comment was not meant as threatening a libel suit.

Contacted by phone Friday, Harrison said he has known Rashaed for several months but was not his business partner.

He said he bid on Milwaukee properties at the suggestion of Rashaed's real estate agent but that he did not know the properties were part of a court fight or that his bid came in hours before Yamahiro was initially scheduled to decide on whether Rashaed was to lose control of the properties.

"This whole thing is so bizarre and so crazy," Harrison said.

Harrison declined to say whether he had helped Rashaed buy any properties in Ohio, saying the information would be confidential.

"I'm going to go ahead and get an attorney and I'm going to conclude this conversation," Harrison said as he hung up.

Thousands of violations

Rashaed agreed in October to sell his holdings in Milwaukee after the city sued him, charging that he exploits poverty-stricken and desperate tenants. The suit noted that the city has cited Rashaed or his operations for 12,806 violations of the city building code, a figure that does not include "hundreds of orders to correct thousands of (code) violations ... at properties that have no residential units or that they no longer own."

If the city succeeds in forcing Rashaed out, he will be the second major Milwaukee slumlord to lose control of his properties. The more than 70 properties owned by Mohammad Choudry or LLCs linked to him were placed in receivership in 2016 after the city charged him with racketeering in a civil lawsuit.

In the action against Rashaed, the city is charging that the landlord is more focused on building a new empire in Ohio than on overseeing his Milwaukee properties. His operation consists of a confusing maze of more than 50 LLCs owned or linked to Rashaed.

In the latest motion, Decker wrote that "the tenants who live in (Rashaed's) Milwaukee properties and the neighbors who live next door were a lower priority than Mr. Rashaed's interest in building his rental real estate empire in a new market."

A check of real estate records Friday showed that LLCs linked to Rashaed bought two 20-plus unit apartment buildings in Cincinnati last year for a combined $1.4 million. The buildings sit one block apart and are located in a neighborhood where 39% of residents live in poverty and the median household income is $22,564, according to the U.S. Census Bureau.

Weeks before the properties were sold, the City of Cincinnati's Health Department received notice a child who attended day care in one of the buildings tested positive for lead poisoning.

Joe Wolf, a health inspector and lead risk assessor with the city, found lead paint in the apartment where a woman is running the day care operation. Since the inspection took place as the property was being sold, Wolf notified the real estate agents who were handling the sale, including J.J. Harrison.

"If the property is transferred the orders will be the responsibility of the new owner. Orders stay with the property," Wolf wrote in an email to Harrison and two other people on Sept. 28, one day before records indicate the property was sold.

In an interview with a reporter, Wolf said the lead paint problem has not been addressed.

"They've been out of compliance for two months," the inspector said. "I'll be putting a placard on the door (of the apartment) and letting the residents know they have to go."

The LLCs linked to Rashaed purchased three more properties in Dayton, also in high-poverty neighborhoods. The two single-family homes and one multifamily property were bought for a combined $121,000, according to the city's motion.

Milwaukee properties owned by Rashaed LLCs are concentrated in low-income neighborhoods.

Decker noted that in one week last fall Rashaed spent about $272,000 cash to buy $1 million worth of Ohio real estate.

After Rashaed agreed to sell his Milwaukee properties, he spent $60,000 to buy a rental property in Dayton and he leveraged a "Palm Beach luxury rental property" owned by one of his LLCs to obtain a $1.27 million loan.