HFZ, Meir and executives from both HFZ and Omnibuild allegedly defrauded subcontractors, investors and the City of New York.

Mark your calendars for the ultimate real estate experiences with Inman’s upcoming events! Dive into the future at Connect Miami, immerse in luxury at Luxury Connect, and converge with industry leaders at Inman Connect Las Vegas. Discover more and join the industry’s best at inman.com/events.

Former HFZ Capital executive Nir Meir was formally charged on Thursday with stealing more than $86 million, along with other industry executives and HFZ Capital itself.

HFZ, Meir, and executives from both HFZ and the construction firm Omnibuild allegedly defrauded subcontractors, investors and the City of New York through a series of fraudulent schemes, according to an indictment by the Manhattan District Attorney.

“These indictments depict allegations of widespread fraud within the real estate industry primarily spearheaded by one man: Nir Meir,” District Attorney Alvin Bragg said in a statement.  “In total, we allege these defendants’ conspiracies netted them a total of $86 million stolen from investors, contractors, and the City of New York. My office’s Rackets Bureau is laser-focused on fraud in the construction and real estate industries and will continue to root out people who steal from investors and corrupt the market.”

Meir was arrested this week in Florida with plans to extradite him to New York to face charges.

Nir Meir. Image: Handout

Omnibuild executives John Mingione, Kevin Stewart and Roy Galifi were all accused of grand larceny. Omnibuild was HFZ’s primary contractor for the XI, a luxury condo on Manhattan’s high line that the DA’s criminal probe centered around. The defendants pleaded not guilty, while the company did not respond to requests for comment.

Along with Meir, HFZ former managing director of construction Anthony Marone and former HFZ senior project executive Louis Della-Peruta were charged with grand larceny.

Prosecutors allege the defendants made false reports of construction costs in 2019 and 2020 for the XI project in order to bilk their investors and defraud the City of New York of $15 million in taxes. Meir allegedly did this by conspiring with Omnibuild and HFZ executives to inflate the “percentage of completion” on their monthly invoices to make the project appear to be closer to completion than it was in reality. Their lenders believed them and freed up more capital for them.

The XI project went into foreclosure in 2021 before it was completed and after Omnibuild filed a lien against HFZ in the summer of 2020, alleging $100 million in unpaid bills. It was purchased by another developer who renamed it One High Line and opened it in late 2023.

Meir was fired from HFZ and decamped to Florida, where he lived out of a series of luxury hotels before he was arrested one week after declaring bankruptcy.

His arrest marked a stunning fall from grace from second in command at what was once one of the most prominent and ambitious developers in Manhattan.

The DA’s inquiry into the XI project also turned up a number of unrelated alleged schemes, including one from a subcontractor who stole $300,000 from the XI project, and $4.6 million allegedly stolen from an investor by HFZ to develop a commercial property in San Francisco that HFZ allegedly never acquired to the rights to develop.

Email Ben Verde

This post was originally published on this site