Not sure what you think was a scam. It’s legal to sublet a controlled apartment, with the landlord’s permission, and it’s also legal for adult offspring to move in with their parents.
There are plenty of scams but you haven’t mentioned one.
Rent control has been a struggle to phase out. More than twenty years ago, there were many tens of thousands still rent controlled, often at absurdly low rates from WWII. Illegal secret sublets were common in rent controlled apartments to people outside the nuclear family, because they were so valuable (like paying $100/month in Manhattan for a big apartment, and charging $2,100 to the sub).
Guiliani and Bloomberg finally sun-setted (or identified fraud) of most of the rent controlled apartments. Now the great bulk are rent stabilized (much closer to market rates). Rent controlled rates often stayed frozen far below what was required to pay for legally mandated expenditures like tax, heating oil, and maintenance. No one would buy a guaranteed money loser apartment building, so owners only choices were to walk away in bankruptcy, or burn it down for insurance.
The fires ravaged swathes of the South Bronx and Coney Island, leaving some neighborhoods looking like burned out cities from WWII.
May God damn the law under which rent can be controlled!
The rest of your post is irrelevant.