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. Last Updated: 07/27/2016

Families Fight for Homes After Scam

ST. PETERSBURG -- "It was the dream of a lifetime to move into a new flat," said Galina, a tourist guide, who until recently shared a communal apartment with three other families in St. Petersburg's Moskovsky district. "The conditions were very bad. It was insanitary. People used to come home drunk. The place needed renovating but nobody could agree on it. It was impossible to live there," said Galina, 35, who declined to give her last name. She sold her room, dug into her savings and bought an apartment for $8,000 last August in a block still being built and due to be finished by the end of March. The buildings were a part of a large housing development under the state company Gosudarstvenny Obukh-ovsky Zavod, or GOZ. When it ran out of money in 1992, a private company, Profit, was brought in to help finance the project. They ran out of money a year later and another private investment company, Green, was brought in. According to the contract signed by GOZ, Profit and Green, and seen by The Moscow Times, Green was supposed to provide the investment for 25 flats which it would eventually have the right to sell. But Galina and 30 other families who paid for Green's new flats, never had the chance to move in. Suddenly, telephone calls to Green's office went unanswered. According to the police, the director Valentin Gusev, who had been using a false passport, mysteriously disappeared last December and still cannot be traced. In an interview, the general director of Profit, Dmitry Monosov said Green failed to hand over any money for the flats and that they considered the contract annulled by Sept. 15 last year. The families estimate that some $400,000 were paid to Green, in cash or by bank transfer, for the flats which cost between $8,000 and $13,000 each. Monosov says he was unaware that Green had been selling the flats until he heard complaints from the families that the company had disappeared. But the families say they checked with GOZ and Profit who told them Green was authorized to receive the payments. Monosov told The Moscow Times that the families were naive to pay into Green's account because the company did not provide a valid contract. He also says that the contract between Green, Profit and GOZ was invalid because Green did not transfer the money. Meanwhile, advertisements for the same flats appeared in the local media under another company's name. Monosov says that since Green failed to come up with the money, the contract was annulled and they sold the flats on to another company. Galina and the original families feared that other people were about to move into their flats. "We saw a lorry loaded with furniture parked in front of the building. We had to do something otherwise we'd all end up living in the street with no homes to go to," says Galina speaking in the stairway of the flats where the families have blockaded themselves. Now they are refusing to move out until a solution is found.