The stories of Adam Hochfelder and Elliot Spitzer 

 

Can the “Wharton Whiz Kid” Ever Tell the Truth?

Adam C. Hochfelder  is a Long Island born executive who co-founded the real estate firm Max Capital in 1996, with members of the powerful Kalikow real estate family, as was reported by Wikipedia.

At its peak, Max Capital had ownership or management stakes in 8,000,000 square feet (740,000 m2) of space, including the Helmsley Building and the Conde Nast Building in Manhattan.  At one point in time, his property portfolio was valued at a staggering $2.7 billion.

Some of the nation’s largest institutions invested side by side with Hochfelder including JP Morgan, Citigroup, Wells Fargo, Goldman Sachs, Credit Suisse and Fidelity. He bought out N. Richard Kalikow from his partnership because of a soured relationship in 2002. Hochfelder paid Kalikow $35 million, of which $18 million was Hochfelder’s own money, and he borrowed $17 million from banks to help finance the buyout of Kalikow.

Wikipedia reported that some of the loans were collateralized in a manner inconsistent with reporting regulations. Hochfelder voluntarily paid back all of the money to complete the transaction. Due to NYS regulations, he was obligated to serve 14 months in a NYS program.

Hochfelder is known as the “Wharton Whiz Kid” for his ability to financially structure and acquire some of NYC’s largest properties which helped him generate multimillion-dollar deals. Currently, Hochfelder is the Managing Director of Real Estate Acquisitions & Development at Merchants Hospitality.

Born to a Jewish family, Hochfelder was raised in Old Westbury on Long Island. In 1993, he graduated from University of Pennsylvania’s Wharton School of Business. Hence the sobriquet “Wharton Whiz Kid” that would eventually be used to describe his business acumen.

According to the information site, the following is a chronological list of Hochfelder’s real estate accomplishments and acquisitions.

• In 1998, Max Capital acquired 230 Park Avenue for $300 million. This 1929 tower was a former Helmsley property, and Hochfelder worked with the Bass family to pay for it. Later in 2005, a Dubai prince bought it for $705 million.
• In 1999, Hochfelder purchased 1440 Broadway near Times Square for $152 million.
• In 2000, he was involved in the development of the multiple luxury hotel properties including the Hyatt Andaz at 485 Fifth Avenue in NYC.

  

• In 2002, Hochfelder acquired multiple residential properties in New York and Chicago worth $740 million. His other acquisitions include the former Condé Nast building at 350 Madison Avenue ($180 Million).
• In 2003, Hochfelder purchased a massive building adjacent to Grand Central Terminal, the 237 Park Avenue for $455 million. He purchased this building known for its soaring, glass-roofed interior for a relatively low price, $379 a square foot – compared to $600 a square foot Boston Properties paid in 2002 for 399 Park Ave. The same year he made a deal with Texas investors to pay $320 million for full control over 450 West 33rd Street, home to the Daily News and the Associated Press.
• In 2005, he successfully acquired the Tommy Hilfiger Building for $88 million. This was a 185,000-square-foot office building at the northeast corner of 41st Street, overlooking the New York Public Library’s main branch at 485 Fifth Avenue.
• In 2006, Hochfelder acquired the Westin Aruba Resort and Casino in the Caribbean from Oswaldo Cisneros, CEO of Pepsico South America.

  

• In 2013, Hochfelder partnered with Eric Hadar and together they acquired the 1619 Broadway Brill Building, a $185 Million Retail and Office Building in Times Square. Later that year, they sold it for $250 million.
• In 2015, Hochfelder was responsible for the $110 million acquisition and assemblage of 1802-1810 Second Avenue, which is slated to be Manhattan’s first super-luxury Senior Living Facility.

Hochfelder was also responsible for the acquisition of 2412 Broadway, a luxury residential apartment building on the Upper West Side and for Merchants Hospitality’s acquisition of the Global Hospitality & Restaurant Brand, Philippe Chow located in NYC, as was reported by Wikipedia.

Back in March of 2019, the Real Deal reported that Hochfelder pleaded guilty to a misdemeanor fraud charge in a scheme involving Knicks season tickets, a false order from a fashion retailer and a Manhattan apartment building, according to court documents. In 2010, Hochfelder was sentenced to serve at least two years and eight months, with a maximum of eight years in prison for fraud.

These charges were in the same vain as a 2008 fraud case in which Hochfelder was accused of defrauding banks as well as family members and friends out of more than $18 million.  In 2010, he was sentenced to serve at least two years and eight months, with a maximum of eight years in prison for the fraud charges.

The Real Deal reported that a plea agreement in the case indicated that between 2015 and 2017 Hochfelder had defrauded eight people out of almost $500,000 in three separate incidents.

According to the Real Deal: “The first incident took place in 2015, when he told three people he had purchased season tickets for the Knicks and wanted to sell several of the games to partners. Each person gave him $12,000 in exchange for several Knicks tickets, but Hochfelder never had or purchased any of the tickets and instead used the money on personal expenses and debts, court documents say. He eventually repaid two of the three people.”

The plea agreement goes on to provide shocking details about the mendacious nature of Hochfelder’s claims. In 2016, Hochfelder swindled someone out of $150,000 on the fraudulent assertion that he needed the money for the “manufacture of goods” as he claimed his wife had a “pending order from a large fashion retailer.” The truth was that Hochfelder nor his wife had a deal of this kind but Hochfelder needed to substantiate his claim so he ordered subordinate  to forge a purchase order from the retailer to add some credibility to his tall tale.

After receiving the money from the unnamed person, the plea agreement stated that Hochfelder used the $150,000 to pay off debts and other personal expenses. After the person scrutinized Hochfelder and discovered that this was a scam, he paid him back, according to the plea deal.

According to court documents, the last incident also took place in 2016 when Hochfelder took $295,000 from four people. He had persuaded the quartet that he needed to money to buy a distressed property in Manhattan and as the plea agreement stated, Hochfelder told them that because the mortgage was in default on the building that he could get a good deal on it because he allegedly had a personal relationship with a large bank.

According to the Real Deal report, the Manhattan district attorney said that “the property had no such mortgage on it and was not available for sale.”

The plea agreement mandated that Hochfelder make restitution on the monies that were fraudulently taken and that he had to pay back $1 million from his previous fraud case. As far as the Knicks tickets scheme was concerned, Hochfelder was ordered to pay back $12,000 that he still owed one person.

As was reported in December of 2019 in a feature article in the Real Deal, Hochfelder also attempted to bully the Real Deal in June of that year into not publishing anything about his previous criminal behavior.

The article which was written by Erin Hudson said that Hochfelder was phoning the publisher of the Real Deal several times a day from various phone numbers as he was exceptionally concerned about the reporting that they had planned to do about his case. Hochfelder had spent weeks threatening the publication with legal action and other menacing consequences if they went ahead and published what he perceived to be “false claims” about him and one of his latest projects.

When that wasn’t working for him, Hochfelder resorted to blackmail techniques in his attempts to kill the story about him that would surely sully his already tarnished reputation. He told the Real Deal publisher that he had been privy to unsubstantiated allegations from his purported sources about a staffer at the publication. The Real Deal report indicated that if the publication printed these “false” claims about him then he would hand over the allegations about the staffer to an unnamed publication who would run it.

What disturbed Hochfelder was the fact that the Real Deal was investigating his latest hotel and entertainment project, involving the Playboy Club New York, as was reported by Erin Hudson in a searing and thoroughly researched story.

The article indicated that Playboy had been struggling for years to create a feasible business strategy that would resonate with Americans in the aftermath of its “glory days” when Hefner was running the show. Its New York location on West 42nd Street proved not to be the answer: Playboy cut ties with the club at the end of 2019, after a plethora of issues with Hochfelder and his partners.

The Real Deal report indicated that from three lawsuits tied to the project emerged a trail of unpaid bills that ran for two years and allegations of misused funds, “unconscionable fraud” and sexual harassment. Those claims, which have since been settled, were largely aimed at Hochfelder, the lead representative for one of the project’s owners, Merchants Hospitality.

It also appears that Hochfelder is a master at turning the screws on people and using heavy handed methods to silence them. Ms. Hudson reported that of the 30 people she interviewed for her article, many were reluctant to speak because they had signed confidentiality agreements or were concerned that they would be targeted by Hochfelder.

“The Sheriff of Wall Street” – Eliot Spitzer

Having served as the Governor of New York, a two term New York State attorney general and six years as a prosecutor in the Manhattan district attorney’s office, it appeared that the Bronx born and Harvard educated Eliot Spitzer had solidified a prestigious career in public service.

After all, he earned a national reputation as the “Sheriff of Wall Street” as Spitzer went head to head with bigwigs like AIG’s Hank Greenberg, the New York Stock Exchange’s Richard Grasso and billionaire Ken Langone, a co-founder of Home Depot who said he hopes Spitzer’s “private hell is hotter than anybody else’s.”

That was not to be the case, however, in the years that followed Spitzer’s dark side emerged as he was eventually implicated in a high-priced call girl scandal in 2008 and an extortion scandal in 2016.

Following his father Bernard’s illness and death in 2014 and with politics behind him, Spitzer came to lead his family’s real estate business, Spitzer Enterprises, despite having avoided the role for much of his life, as was reported by Wikipedia.

According to a report in the Real Deal, Spitzer Enterprises built iconic properties such as 200 Central Park South and 800 Fifth Avenue — the luxury apartment tower overlooking Central Park that Spitzer now calls home.

Spitzer sold his company’s apartments in The Corinthian and the Crown Building in Manhattan for a large profit, which he used to fund a $700 million project of three waterfront buildings in South Williamsburg, Brooklyn.

According to a March 2019 article in Forbes magazine, “the three-tower development, named 420 Kent for its addresses at 416 and 420 Kent Ave., has 857 apartments, along with 20,000 square feet of retail space, and has been move-in ready since January, with finishing touches still being added to its amenities.”

Forbes added that it was designed by the New York-based ODA Architecture, which has projects in the United States, Canada and Europe, including several others in Brooklyn, such as Pier 6 at Brooklyn Bridge Park.

The firm is known for its avant-garde approach, and 420 Kent is no exception, with a multidimensional, cubist aesthetic wrapped in glass, as was reported by Forbes.

 

The Dark Side

On  March 10, 2008, The New York Times reported that Spitzer had patronized a high-priced escort service called Emperors Club VIP and met for two hours with a $1,000-an-hour call girl. This information originally came to the attention of authorities from a federal wiretap, according to a Wikipedia profile. During a six month span, Spitzer had at least seven or eight liaisons with women from the agency and paid more than $15,000. According to published reports, investigators alleged that Spitzer paid up to $80,000 for prostitutes over a period of several years while he was attorney general, and later as governor.

Spitzer first drew the attention of federal investigators when his bank reported suspicious money transfers under the anti-money laundering provisions of the Bank Secrecy Act and the Patriot Act. The resulting investigation was triggered by the belief that Spitzer might have been hiding bribe proceeds and led to the discovery of the prostitution ring. His FBI code name was “Client No. 9”

On March 10, Spitzer held a press conference apologizing to his family and to the public. He added, “‘I must now dedicate some time to regain the trust of my family'”

Following Spitzer’s March 10 press conference, New York State Assembly Republican Minority Leader James Tedisco and Republican New York Congressman Peter King separately called for his resignation. Tedisco later announced that he would initiate impeachment proceedings in the State Assembly if Spitzer did not resign.

Spitzer abruptly resigned from office two days later in a story that became a tabloid sensation, as was reported by the Real Deal.

In February 2016, Spitzer was investigated by the New York City Police Department after being accused of assault by Svetlana Travis-Zakharova, a woman from Russia, in an incident that supposedly occurred at the Plaza Hotel on February 13, 2016. The New York Daily News reported Spitzer had been accused of attacking the woman, who tried to kill herself by slitting her wrists after the incident. Ms. Travis subsequently recanted her accusations and no charges were filed.

Within a month, Travis − who left for Russia in February − turned from an alleged victim into a suspect. On October 10, she was arrested upon landing at JFK International Airport. On October 12, Travis-Zakharova, 26,faced state charges of grand larceny by extortion, while also being investigated for prostitution. Over two years, prosecutors claimed, she had collected around $50,000 from Spitzer in exchange for keeping “intimate details” of their relationship secret from his relatives. The money was allegedly deposited into a bank in Russia, as was reported by Wikipedia.

Also on October 12, Travis faced forgery and identity theft charges, from an unrelated incident, after purportedly signing a high-end apartment lease under a different name, costing the victim − a 67-year-old New Jersey man − $18,000. The bail was set at $1 million.