NEW YORK CITY—In federal court, White Plains-based real estate developer and contractor, Michael D'Alessio, 53, pled guilty to one count of committing wire fraud, and one count of concealing assets from a bankruptcy court. Geoffrey S. Berman, the US Attorney for the Southern District of New York, had filed an indictment against the real estate developer in August 2018 as reported in GlobeSt.com.

D'Alessio's company developed luxury residential real estate in Manhattan, the Hamptons and Westchester. Prosecutors accused him of seeking investments by selling shares in newly formed limited liability companies named after the properties, and promising monthly interest payments and a share in the profits at the sales of the properties. However, the US Attorney's office alleged that from 2015 through April 2018, D'Alessio misappropriated investors' funds, channeling them through a series of shell accounts that he controlled.

“In typical Ponzi-like fashion, D'Alessio comingled over $58 million of investor funds and used them to cash out early investors, cover debts, and pay his own personal gambling debts,” says Berman. “When D'Alessio eventually went into bankruptcy, he perpetrated yet another fraud by trying to conceal assets.”

In 2018, D'Alessio filed for Chapter 7 bankruptcy. Prosecutors asserted that he submitted forms omitting money and property belonging to his estate, making a false declaration under penalty of perjury.

With his guilty plea to wire fraud, the maximum sentence is 20 years in prison. The crime of concealing assets carries a maximum sentence of five years in prison. In addition, each crime separately carries a financial penalty of $250,000 or twice the gross gain or loss from the crime. D'Alessio's actual sentence will be determined by a judge at a hearing scheduled for March 22, 2019.

Instant Insights /

Real Estate Developer Michael D'Alessio Pleads Guilty to $58M Fraud

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