Manhattan Real Estate Developer Pleads Guilty in $27 Million Mortgage Fraud – US Legal Newswire

LAWFUEL.COM – Legal Newswire
LEV L. DASSIN, Acting United States Attorney for the
Southern District of New York, announced that MICHAEL
HERSHKOWITZ, a Manhattan real estate developer, pleaded guilty
today in Manhattan federal court to participating in a
$27 million mail and wire fraud conspiracy. According to the
criminal Complaint, Information, and other documents filed in
this case, as well as statements made during HERSHKOWITZ’ guilty
plea proceeding:

HERSHKOWITZ, working through Manhattan real estate
development company, The Kingsland Group, Inc., and related
entities (collectively, “The Kingsland Group”), fraudulently
induced approximately 70 individuals to lend the Kingsland Group
over $27 million, purportedly to fund the renovation of
approximately sixteen multi-family apartment buildings located in
upper Manhattan. HERSHKOWITZ and a co-conspirator, IVY WOOLFTURK,
falsely represented that the lenders would hold, as
collateral for the loans, interests in bona fide first mortgages
in the various properties in which they thought they were
investing. In fact, the lenders did not hold recorded, first
mortgages in the properties. Instead, the lenders were provided
with forged documents falsely reflecting that the mortgages had
been properly recorded with the City of New York. Interest was
paid on the loans for some years after they were first made, but
ultimately the principal on the loans was not repaid when due and
it was determined that the lenders did not have valid first
mortgages on the properties in question.

HERSHKOWITZ, 52, of New York, New York, pleaded guilty
before United States District Judge P. KEVIN CASTEL to a onecount
Information charging conspiracy to commit mail and wire
fraud — a charge which carries a maximum term of 20 years in
prison. The Information also contains a forfeiture allegation
for over $27 million, representing the funds obtained through the
fraud. HERSHKOWITZ is scheduled to be sentenced on September 9,
2009.

IVY WOOLF-TURK, 52, of Port Washington, New York, pled
guilty to an identical charge on February 25, 2009; she is
scheduled to be sentenced on May 27, 2009.
Mr. DASSIN praised the investigative work of the Federal
Bureau of Investigation in this case.
This investigation is being handled by the Major Crimes
Unit of the United States Attorney’s Office. Assistant United
States Attorneys HARRY A. CHERNOFF and MARCUS A. ASNER are in
charge of the prosecution.
09-071 ###

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