On February 7, prosecutors in Manhattan indicted a huge real estate developer and several executive conspirators in court. They are alleged to be responsible for defrauding investors, subcontractors, and the government of New York City in a multi-year scheme that drained them upwards of $86 million.

Real estate developer and managing director Nir Meir, executives at HFZ Capital Group, and executives at Omnibuild construction firm are accused of stealing funds from their investors and shorting subcontractors on their projects. Prosecutors accused Meir of running the scheme over the five years he worked at the company.

As the managing director of HFZ, Meir was one of the most powerful real estate developers in New York City, appearing alongside HFZ founder Ziel Feldman on lists of giants in the industry. The HFZ development of luxury property The XI would have made Meir and HFZ responsible for one of the most recognizable skylines in the city and possibly the world.

HFZ Capital Group was launched in 2005 by Ziel Feldman, whose name is excluded from the current indictments against Meir and several HFZ executives. Since its founding, the private company has managed billions of dollars in real estate development.

The construction management firm Omnibuild was founded in 2007 and is one of the leading firms in New York. They are a mid-sized firm that has completed more than 20,000 feet of vertical building space in New York.

HFZ purchased a full block in Chelsea, Manhattan, to develop a luxury two-tower property called ‘The XI.” At the time, the $870 million purchase in 2015 was one of the highest amounts ever spent to buy a development site in Manhattan. The goal of the project was to have a 137-room hotel, 247 condominiums, and nearly 90,000 square feet of retail space.

In the indictment, prosecutors assert that Meir was responsible for manipulating the funds meant to develop The XI to be transferred to different places than what they were meant for. Meir allegedly diverted $253 million over four years into various LLCs, skirting legal requirements for them to be used on project development.

Prosecutors allege that Omnibuild executives John Minigone, Roy Galifi, and Kevin Stewart were part of a conspiracy to inflate their monthly invoices in an attempt to hide the financial wrongdoing.

One of the bank statements that was allegedly forged attempted to make an account that only had $814 in it look like it has over $24.6 million. The alleged scheme took place over several years.

Alvin Bragg Manhattan District Attorney said, “These indictments depict allegations of widespread fraud within the real estate industry primarily spearheaded by one man: Nir Meir.” (via New York Post)

Bragg carefully outlined the seriousness of the investigation and the amount they suspect was ultimately stolen.

Meir was arrested in Miami Beach Florida on February 5. He will need to go through an extradition process before he can formally appear in a New York court. The three Omnibuild executives and the company itself have pled not guilty to the charges brought by prosecutors.