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Former Executive of Collapsed NYC Development Firm Arrested in Multimillion-Dollar Fraud Scheme
Edited by: TJVNews.com
In a stunning turn of events, Nir Meir, a former executive at the once-prominent New York City development firm HFZ Capital Group, found himself in handcuffs this week as authorities moved forward with charges related to a sprawling multimillion-dollar fraud scheme, as was reported by the New York Times. Meir’s arrest, which took place at the 1 Hotel South Beach in Miami on Monday, marks a significant development in a case that has sent shockwaves through the real estate industry.
Today we announced the indictment of HFZ Capital Group, Managing Principal Nir Meir, and other industry executives for allegedly stealing more than $86M from investors, subcontractors, and New York City through a series of frauds and schemes. More here: https://t.co/lNx4nNMfCK
— Alvin Bragg (@ManhattanDA) February 7, 2024
According to sources familiar with the matter, Meir is expected to face charges brought by the Manhattan district attorney’s office, spearheaded by Alvin L. Bragg. According to information provided in the NYT report, the charges stem from alleged fraudulent activities connected to HFZ Capital Group’s development of the XI, a luxury condominium project in Manhattan. Meir, along with at least 10 other individuals and businesses, were handed down indictments on Wednesday in connection with the scheme.
Nir Meir the second in command at one of Manhattan’s largest condo developers was arrested and faces extradition. https://t.co/cqXEvnh308
— Keith Larsen (@TheKeithLarsen) February 6, 2024
According to a press release issued on Wednesday from Bragg’s office, Meir and other industry executives were indicted for stealing more than $86 million from investors, subcontractors, and New York City through a series of frauds and schemes that began in 2015. In five separate but related New York State Supreme Court indictments, HFZ, Meir, and others were charged with varying counts of larceny, conspiracy, falsifying business records, tax fraud, money laundering, and more. The indictments are the culmination of a joint investigation by the Manhattan D.A.’s Office’s Rackets Bureau and the New York State Police Special Investigations Unit.
Nir Meir the second in command at one of Manhattan’s largest condo developers was arrested and faces extradition. https://t.co/cqXEvnh308
— Keith Larsen (@TheKeithLarsen) February 6, 2024
“These indictments depict allegations of widespread fraud within the real estate industry primarily spearheaded by one man: Nir Meir,” said District Attorney Bragg. “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.”
Among those charged are individuals associated with Omnibuild, a construction firm involved in HFZ projects, including Omnibuild’s chief executive, John Mingione, the NYT report said. The indictments allege a conspiracy to misappropriate funds from investors by inflating construction costs for the XI development between June 2019 and September 2020.
Prosecutors believe the fraudulent activities persisted until late last year, implicating Meir and his associates in a web of deceit and financial malfeasance.
As was reported by the NYT, a spokesperson for Omnibuild vehemently denied any wrongdoing on the part of the company and its executives. Josh Vlasto, the spokesman, portrayed Omnibuild and its leaders as victims of HFZ’s fraudulent practices, asserting that evidence would demonstrate HFZ’s culpability in the alleged theft.
The unraveling of HFZ Capital Group, once a titan in the New York City real estate scene, has captivated industry observers as details emerge of a dramatic collapse fueled by allegations of fraud, missed payments, and financial mismanagement.
At the helm of the embattled firm was Nir Meir, a key executive who played a pivotal role in raising millions of dollars from investors, predominantly wealthy foreigners seeking to capitalize on lucrative real estate opportunities, the report in the NYT said. By 2019, HFZ boasted a staggering portfolio of properties exceeding $10 billion in value, cementing its status as a formidable player in the market.
However, HFZ’s fortunes took a turn for the worse with the launch of its most ambitious undertaking yet: the XI project in Manhattan’s Chelsea neighborhood. This ambitious venture, featuring twisting glass towers housing high-end condos and a luxury hotel, carried a price tag of $870 million for the development site alone, as was indicated in the NYT report. Spearheaded by construction firm Omnibuild, the project faced mounting challenges as deadlines for payments were allegedly missed, triggering disputes with investors and contractors alike.
Omnibuild’s withdrawal from the project in 2020, citing outstanding debts totaling over $100 million owed by HFZ, signaled the beginning of a downward spiral for the embattled developer. As per the information in the NYT report, investor Yoav Harlap of Israel further exacerbated HFZ’s woes by filing a lawsuit against Meir in 2021, alleging refusal to repay a substantial loan and improper handling of funds.
Amid mounting legal pressure and financial turmoil, Meir filed for bankruptcy in Florida, where he had relocated after departing HFZ in late 2020. The NYT also reported that the fate of HFZ’s flagship XI project hung in the balance, ultimately succumbing to foreclosure in 2021 and undergoing acquisition by other developers, who rebranded it as One High Line.
The fallout from HFZ’s collapse extended beyond the XI project, with the firm losing control of four additional condo buildings in Manhattan in 2021 alone. The NYT report also pointed out that while HFZ founder Ziel Feldman remained insulated from legal repercussions, his wife, Helene Feldman, offered no comment on Meir’s arrest, underscoring the rift between HFZ’s leadership and its disgraced former executive.
In August 2023, The Real Deal reported that Meir also faced damning accusations leveled against him in court filings by his estranged wife, Ranee Bartolacci.
The August revelations, stemming from Bartolacci’s assertions, paint a picture of Meir’s alleged descent into reckless behavior amid the turmoil surrounding HFZ’s failed projects, the Real Deal reported in August. Bartolacci contends that while Meir was grappling with creditors, he engaged in a spree of excessive drinking, partying, and borrowing substantial sums from her father. Text messages and voicemails submitted as evidence depict Meir spiraling deeper into financial ruin as debts mounted and legal challenges intensified, the report added.
Bartolacci, who is seeking a divorce from Meir, alleged that her husband and her former lawyer concealed crucial legal issues from her, including a $13 million judgment against her and a contempt order, the report on The Real Deal web site said, These legal ramifications stem from Harlap’s efforts to recover $18.5 million lent to HFZ for a failed Upper East Side development. Despite attempts to pursue Meir, Bartolacci, and HFZ’s former partner Ziel Feldman for the debt, Harlap has encountered obstacles in collecting the owed funds.
Furthermore, Bartolacci’s filings indicate that a judge previously issued contempt orders against both her and Meir for improper money transfers from restricted accounts, the report added. However, Judge Joel Cohen of New York State Supreme Court recently vacated the contempt order against Bartolacci, acknowledging the credibility of some of her arguments during a hearing.
Meir’s lawyer, Jonathan Davidoff, vehemently denied Bartolacci’s claims, asserting that she was fully aware of the situation and is attempting to scapegoat Meir to protect herself. The Real Deal report said that nevertheless, the judge held Meir in contempt for a second time for continued improper financial transactions, exacerbating the legal woes plaguing the former HFZ principal.
While Meir’s lawyers contend that the funds for his extravagant spending originated from his wife, Bartolacci found herself embroiled in legal disputes stemming from their Miami residence. The couple faced eviction proceedings initiated by their landlord, who accused Bartolacci of making unauthorized renovations, the Real Deal report indicated. Although Bartolacci countersued, the landlord briefly succeeded in evicting them earlier this year before the matter was resolved through a settlement.
Tracie Clabaugh, one of Bartolacci’s college friends and a real estate attorney, witnessed the tumultuous events surrounding the eviction. According to information provided in the Real Deal report, she recounted a scene where police surrounded the property, prompting her to investigate further. Clabaugh’s inquiries uncovered Meir’s legal troubles, including a judgment and contempt order against Bartolacci, which devastated both her and her father upon learning the extent of the situation.
Text messages exchanged between Meir and Bartolacci, submitted as evidence in court, paint a picture of Meir’s erratic behavior, swinging between pleading for assistance and issuing threats. The Real Deal report noted that in one message to Bartolacci’s father, Meir vowed to exhaust all resources to financially ruin them, demonstrating the escalating acrimony amidst their divorce proceedings.
