A real estate developer will spend time behind bars for operating a years-long $58 million Ponzi scheme that included properties in the area.
Michael D’Alessio, 53, was sentenced on Friday, April 5 to six years in prison for his elaborate scheme to defraud investors in luxury real estate developments in Manhattan, the Hamptons, Westchester and elsewhere.
In addition to the prison term, D'Alessio was sentenced to three years of supervised release and order to pay forfeiture in the amount of $58,090,047.
D'Alessio is the former president and CEO of real estate development firm Michael Paul Enterprises in White Plains.
“Michael D’Alessio promised investors that he would develop and build luxury properties that would yield big returns," Manhattan U.S. Attorney Geoffrey S. Berman said. "When the real estate market took a downturn, D’Alessio resorted to fraud. In the end, all he built was a Ponzi scheme that he used to rip off his investors of their hard-earned life savings to the tune of $58 million.
"Today, D’Alessio was sentenced to six years in prison for this brazen fraud. Others who would consider funding a life of luxury with the proceeds of fraud should take heed.
"We will continue to work with our law enforcement partners to see that such fraud is met with justice, and that those who would commit such crimes understand that crime doesn’t pay.”
A career real estate developer and contractor, D’Alessio was the CEO of an investment and development firm specializing in the design, construction and management of residential and commercial real estate properties.
The scheme began in 2015 and lasted until April of 2016, Berman said.
In soliciting investors, D’Alessio made several representations to potential investors, including that investor funds would be used only to develop the property and cover related expenses, Berman said. Instead, for years, D’Alessio misappropriated his investors’ money for his own use.
In 2018, D'Alessio went into involuntary bankruptcy under Chapter 7 of Title 11 of the United States Code. In connection with this bankruptcy proceeding, he submitted forms that fraudulently omitted money and property belonging to his estate, and made a false declaration under penalty of perjury concerning his money and property, according to Berman.
D’Alessio’s cell phone also contained text messages between D’Alessio and another individual in which D’Alessio stated: “I need some of my money tomorrow for Italy” and “I need my 100k I gave you to hold,” Berman said, adding that all together, D’Alessio concealed at least $143,047.16 from the Bankruptcy Court.
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