A New York City Council member and a tenant's rights group are launching an investigation into the real-estate firm controlled by the family of President Donald Trump’s son-in-law and senior adviser, Jared Kushner, over a report that it regularly falsified building permits.

Politician Ritchie Torres and Aaron Carr, founder of Housing Rights Initiative (HRI), a tenants’ rights watchdog, made the announcement at a press conference outside Kushner Cos. New York headquarters on Manhattan’s Fifth Avenue, according to media reports. The news comes a day after the Associated Press reported that Kushner Cos. routinely filed false paperwork with New York City, declaring it had no rent-regulated tenants in buildings it owned, when it actually had hundreds.

That allowed the company to move in and conduct extensive construction and renovation that tenants claimed was targeted harassment aimed at driving them out to clear the way for higher-paying renters, said the AP.

Torres said the Department of Buildings should have identified the false documents as soon as tax documents showed they were wrong. The politician said he is confidential talks with prosecutors, but did not offer further details.

In one instance, the Kushner Cos. purchased three buildings in Queens in 2015, in which most of the tenants had some protection that barred developers from evicting them or raising their rents in an effort to turn a quick profit, the AP reported.

But the company ticked a box on construction-permit applications that said the buildings had no rent-regulated tenants, according to an AP review of the documents. Tax records filed a few months after that showed the buildings actually had 94 rent-regulated units. The Kushner Cos., which at the time was headed by Jared Kushner, sold the buildings two years later for $60 million, or nearly 50% more than it had paid.

“It’s bare-faced greed,” said Carr. HRI compiled the work-permit application documents and shared them with AP. “The fact that the company was falsifying all these applications with the government shows a sordid attempt to avert accountability and get a rapid return on its investment.”

HRI found that the Kushner Cos. filed at least 80 false applications for building permits in 34 buildings across New York City from 2013 to 2016, all saying they had no rent-regulated tenants, when tax documents showed there were more than 300 such units.

Kushner Cos. responded to an AP request for comment by saying that it outsources the preparation of those documents to third parties, with review by independent counsel. “If mistakes or violations are identified, corrective action is taken immediately,” the company said.

Had the paperwork been filed correctly, it could have led to much closer oversight of construction crews, which could have included unplanned “sweeps” on site by inspectors to ensure tenants’ rights were being respected.

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Current and former tenants of the Queens buildings told the AP that they were subjected to loud construction noise, including drilling, banging, dust and leaking water. At other buildings, tenants complained that construction went on at all times of day and night, which is against the rules in New York City.

A 67-year-old tenant in Manhattan’s East Village said she had a knock on the door and the offer of $10,000 if she agreed to leave the building, which had been subjected to loud drilling in the middle of the night and become infested by rats because of the construction work. The tenant, Mary Ann Siwek, turned down the offer and instead sued the company, winning a year’s worth of free rent and a new refrigerator.

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New York City’s rent-stabilization law was introduced in the period after World War II and aimed at ensuring people with lower-paying jobs could continue to afford to live in the city. For landlords, its restrictions cannot be overcome until the rent rises above $2,733 a month, a move that can take a long time as each annual increase is limited.

Filing false documents to the city’s Department of Buildings carries a misdemeanor fine of up to $25,000, but it is regularly flouted. Landlords can receive a demand to file an “amended” form with the correct numbers. HRI found that the Kushner Cos. filed dozens of amended forms for the buildings in the documents, many of them a year or two later.

The Kushner Cos. is already being reviewed by the Securities and Exchange Committee for its use of the U.S. EB-5 investment-for-visa program, The Wall Street Journal has reported. The program offers green cards to immigrants who invest at least $500,000 in U.S. businesses that have been determined to create at least 10 jobs per investor. Most of the visas go to wealthy Chinese individuals, according to the Department of Homeland Security. Last year, Kushner’s sister, Nicole Meyer, mentioned the EB-5 program in marketing materials targeting major Chinese cities seeking investment in Kushner buildings in New Jersey.

The AP report is the latest in a series of negative news articles about Kushner and his real estate deals. Last week, Sen. Elizabeth Warren and other Democrats said they are asking Citigroup Inc. C, -1.05% and Apollo Global Management APO, -2.43% about loans to the Kushner Cos. from the period immediately after Jared Kushner joined the White House, Politico reported.

In February, Kushner was stripped of his top-secret security clearance after months of delays in completing his background check. Kushner has repeatedly had to amend disclosures of foreign contacts that he initially failed to include. His dealing with foreign businesses in the Middle East have also come under scrutiny.

The Dow Jones Industrial Average DJIA, -1.35% was down 1.2% in midday trade, while the S&P 500 SPX, -1.42% was down 1.4%.

Kushner Cos. is facing investigation for filing false building permits