A former bigwig at a once-prominent Big Apple development firm and a slew of other real estate industry executives were indicted Wednesday for allegedly stealing more than $86 million in a years-long fraud scheme, Manhattan prosecutors said.
Nir Meir, 49, and the since-shuttered HFZ Capital Group he once worked for allegedly swindled millions of dollars from investors, subcontractors and New York City during his five years at the company, according to an indictment.
Two other former HFZ employees and three Omnibuild construction firm executives were also slapped with varying counts of larceny, conspiracy, falsifying business records, tax fraud and money laundering in the wide-ranging criminal probe.
The case largely centers on the development of a luxury Manhattan condo project called the XI, prosecutors allege.
HFZ — founded in 2005 by Ziel Feldman — had hired Omnibuild in 2015 to construct two mixed-use commercial and residential towers along the High Line in Chelsea, according to the indictment. Feldman isn’t charged in the case.
Prosecutors allege Meir directed the project’s funds, totaling more than $253 million in four years, to be transferred to various LLCs controlled by HFZ — despite the trust assets being legally required to be used on the development.
Instead, the assets were allegedly diverted to cover financial shortfalls on unrelated HFZ projects, and at times, to personal accounts controlled by HFZ executives, which led to a shortfall of more than $37 million owed to Omnibuild and its subcontractors, the indictment alleges.
In a bid to fill the shortfall of funds and hide the true cost of work, prosecutors allege Meir conspired with Omnibuild executives — John Mingione, 54; Roy Galifi, 62; and Kevin Stewart, 48 — and his HFZ colleagues, Anthony Marrone, 64; and Louis Della-Peruta, 69, to inflate monthly invoices.
After HFZ’s financial difficulties surfaced due to a string of lawsuits and investors started asking questions about the firm’s financial records, Meir allegedly directed an HFZ accountant to then forge bank statements to reflect millions of dollars in investor funds.
One statement was allegedly forged to make it appear as if the account had over $24.6 million in funds when it contained just $814, according to prosecutors.
The XI project eventually went into foreclosure in 2021 following the financial collapse of HFZ amid a trove of investor lawsuits and other foreclosures.
“These indictments depict allegations of widespread fraud within the real estate industry primarily spearheaded by one man: Nir Meir,” Manhattan District Attorney Bragg said.
“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, who was arrested in Miami Beach, Florida, late Monday, is in the process of being extradited back to New York.
All three Omnibuild executives, as well as the company, pleaded not guilty to the charges during their arraignment on Wednesday.
“The evidence will show that HFZ stole from Omnibuild as it did from many others. We absolutely maintain our innocence and look forward to continuing to work with the DA to bring about this result as quickly as possible,” a spokesperson for the company said.
HFZ and one of its execs, Marrone, also pleaded not guilty. The other HFZ defendant, Della-Peruta, is expected to surrender Thursday morning and is still awaiting arraignment.