More investors from Westchester and Connecticut are demanding at least $17 million in damages and a court order stopping White Plains developer Michael D’Alessio and Michael Paul Enterprises from selling or transferring properties.
They claim he misappropriated their funds on housing projects in Scarsdale and Manhattan.
D’Alessio and his enterprises carried out a massive scheme to defraud them, investors allege in three lawsuits filed in Westchester Supreme and County Court.
The Westchester Bank also sued, demanding $881,000 on a $1 million loan D’Alessio took out in 2015, according to news reports.
D’Alessio recently apologized to investors in an email.
His business model was to buy townhouses, demolish or gut them, and build luxury condominiums.
Four investors sued D’Alessio, Michael Paul Enterprises and project entities in December after he stopped repaying their loans.
They demanded to inspect the financial records to trace use of funds on the $90.2 million projects.
Seventeen investors, including the original four accusers, filed three new lawsuits in March.
They charge D’Alessio and his enterprises with fraud, unjust enrichment, breach of contract and breach of guaranty.
A New Rochelle investment company claims that D’Alessio moved millions of dollars into his own account, in a $23.4 million project on East 64th Street.
Investment companies that have sued the developer include Attis Properties of Harrison; East 64th Street Realty Partners of New Rochelle; and RNG WEA LLC of Morganville, N.J.
Individual investors include Joseph Breda of Pelham; Joshua and Angie Brown of Stamford, Connecticut; Robert Cicero of New Milford, CT; Rella Fogliano of Pelham; Stacey Gendels of New Rochelle; Philip and Ellen Goldstein of the Bronx; Philip Healy of Bedford, N.H.; Keith Hummel of West Harrison; Jacqueline Martinez of Hauppauge; Douglas Scribelli of New York City; Marilyn Shendell of New Rochelle; and Bonni Stanley of New Rochelle.
D’Alessio wrote in a Feb. 20 letter to investors that two projects on East 62nd Street no longer make economic sense. A week later, he described our current financial crisis, in an email report to investors.
When the investors sued, D'Alessiio said, a newspaper article about the case was sent to his banks and investors.
“Although many of the factors that led me to this point may have been beyond my control,” he wrote, “I still hold tremendous regret understanding how these projects have affected all of my investors.”
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