Charges Filed in $86M Fraud Scheme

( – Manhattan prosecutors have indicted a major real estate developer and several of his executives over a massive fraud. According to the charges, over $86 million was skimmed off from construction projects over several years. All the defendants have pleaded not guilty.

On February 7, New York County District Attorney Alvin Bragg announced that Nir Meir, a former development executive at NYC real estate giant HFZ Capital Group, had been arrested in Miami Beach and charged with multiple financial offenses. Two more HFZ executives and three from construction company Omnibuild have also been named, and all but one have been arrested and charged. The charges against them include larceny, tax fraud, falsification of records, and money laundering.

According to prosecutors, in 2015 Meir hired Omnibuild to build two mixed-use tower blocks in the Chelsea neighborhood of Manhattan’s West Side and an office building in Madison Square North. Over $253 million was allocated to the projects, and Meir diverted that through a network of companies controlled by HFZ. He then used much of the money to cover shortfalls on other projects and skimmed millions more into the personal accounts of HFZ executives. To cover what was going on, he persuaded Omnibuild to give false reports of their progress on the three new buildings, aiming to convince lenders that the money was being spent on them.

Unfortunately for Meir, the lenders weren’t completely convinced, and demanded to inspect HFZ’s records. At this point Meir told a company accountant to falsify financial records, showing millions of dollars of investors’ funds sitting in HFZ bank accounts when in fact it had been moved elsewhere.

So far Meir, fellow HFZ executives Anthony Marrone and John Mingione, and Roy Galifi and Kevin Stewart from Omnibuild have been arrested and charged. Louis Della-Peruta of HFZ is expected to surrender soon. More arrests are likely to follow, though, with at least ten defendants likely to be charged.

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