Help! Deal with landlord or primary tenant?

[chinatown blues]

I'm confused about how to best protect myself in my current situation. I live in a Chinatown loft space with three other people. There are two people on the lease: one of them lives in the apartment with me, let's call him Moe. The second guy on the lease I've never met and don't know who he is. I have a written agreement with Moe that stipulates that I will live there for a year (been there six months already). It also mentions the amount of my rent, and the fact that Moe gets in advance both my last month's rent and my security deposit. There are also two girls who live in the apartment - one girl is Moe's girlfriend and I don't know the nature of her agreement, and the other girl is month-to-month.

The building is commercial except for our apartment (I've checked this with DOB). On the floor below us, the place is billed as a massage parlor but I'm pretty sure it's used for prostitution. On the floor above, I believe there is illegal gambling (noises of chair scraping the floor at all hours of the night, plus what sounds like mah jong tiles and voices if you stand in the bathroom) I pay a ton of money for the place and haven't made any complaints while I've been here until last month.

It's recently come out that Moe pays almost no rent - he just charges me and the other two (including his girlfriend!) so much that we basically pay his rent for him. I went to the landlord to verify that Moe is a tenant of record (wasn't sure before) and the landlord started asking Moe questions as a result of my visit - apparently he didn't know that Moe had all these other people in the apartment who are not on the lease. The landlord also hadn't previously realized Moe was living almost rent-free. Although the landlord didn't seem to care that there are extra people here, Moe was furious with me for "going over his head to the landlord" and causing all this information to come out. He is protective of the fragile relationship he has with his landlord, and of the money he's making off of us all (including his own girlfriend!). He is afraid the landlord might find reason to evict us all if any one of us annoys him too much.

The reason I did all this homework is because, since last month, I have been trying to get Moe to lower my rent, on the basis of so many repairs that need to be made (it's a very old place) being a factor in the decreased value of my rental. I have also been asking that he return my last month's rent (thereby keeping only the security deposit) because he has been so unstable in his behavior toward me this last month that I want to decrease my chance of financial loss if I have to leave in a hurry. Finally, around the 1st of this month, Moe agreed to begin negotiations on these points and suggested mediation. As of today, the 7th, I haven't paid my rent, pending some kind of agreement we make. Moe has been saying I should pay this month's rent "in good faith" because mediation will take a long time to arrange, but I'm extremely worried about giving him any more of my money until we have some agreement in writing. I'm pretty sure Moe is not going to be dealing with me in good faith and if I pay up, it will give him no incentive to do anything.

I want out. Pronto. How can I do this with as little financial damage to me as possible? Since I haven't paid this month's rent, he can obviously take me to court for a non-payment eviction, and I want to avoid any history in tenant court. I have considered finding myself a place ASAP and, on securing something, raising such a stink with the landlord over the illegal activity in the building, that at least I would have documentary proof of the very bad conditions I live in, as a way of covering myself in case Moe wants to hold me liable for the rest of the lease, and try to sue me for that as well. Is this a good way to go?

I understand that maintenance issues inside the apartment are things I have to address to Moe, since he's the one I have a business relationship with. But what about the building-wide illegal activities, do I bring that up with the landlord or with Moe? If I call 311 to document the apartment maintenance issues, is Moe responsible or the landlord? If Moe ends up getting evicted by his own landlord (and me as well) because of all these measures I take, will I have any legal way to recoup my last month's and security deposit from him?

Also: since problems like mold or unsafe electrical wiring are clearly visible to Moe (because he lives here) do I have to formally notify him to take care of it, or can I just assume that he knows about all conditions inside his own apartment and if he hasn't done anything to fix them, I am justified in breaking my lease?

This is all so confusing! I could use some sane advice to help get myself out of this mess.