DISTRICT ATTORNEY - NEW YORK COUNTY

FOR IMMEDIATE RELEASE
February 8, 2010

CONTACT: Erin Duggan
212-335-9400

MANHATTAN DISTRICT ATTORNEY CYRUS R. VANCE, JR. ANNOUNCES REAL ESTATE FRAUD INDICTMENT

Defendant, Already Facing 58-count Real Estate Fraud Indictment, Attempted to Sell Equity in Historic Sagamore Hotel

Manhattan District Attorney Cyrus R. Vance, Jr., today announced the arrest and second indictment of former businessman ADAM C. HOCHFELDER, on charges of defrauding investors in two real estate deals, following an investigation by the Manhattan District Attorney’s Office [1]. Today’s indictment charges HOCHFELDER with engaging in schemes to steal approximately $2.5 million from investors in his purported acquisition of the Sagamore Hotel on Lake George, and The Peaks Resort and Spa in Telluride, Colorado. The new charges are in addition to a scheme that already led to a 58-charge indictment against Hochfelder in 2008 for stealing more than $17 million through a series of fraudulent loans from banks, friends, and family, and through a fictitious real estate venture.

“The defendant systematically defrauded his friends, family and business associates out of millions of dollars through phony real estate deals, repeatedly abusing the trust of those who believed he was an upstanding businessman,” said District Attorney Vance. “This type of serial fraud, whether victimizing experienced speculators or novice investors, is a serious crime that can threaten the financial well-being of its victims.”

As charged in the indictment and described in court documents, beginning in August 2007, HOCHFELDER represented to investors that he was under contract to buy the Sagamore Hotel, and that they could purchase a part of his equity in the deal.  In reality, HOCHFELDER had no equity in the hotel, and although he had once been the high bidder for the Sagamore, his contract to purchase the hotel had expired without HOCHFELDER completing the deal for lack of financing.  Knowing this, HOCHFELDER continued to solicit and receive more than $500,000 from investors.  According to court papers, HOCHFELDER told some investors that their money would be held in escrow pending the closing of the deal and assured them that if the deal did not close, their money would be returned.  The money HOCHFELDER illegally obtained from his investors never went to the purchase of the Sagamore Hotel at all, but instead HOCHFELDER used the funds to pay his personal expenses including outstanding legal bills, overdue creditors, a personal driver, and trips on a private jet.   

As charged in the indictment and in court filings, in addition to the Sagamore Hotel, HOCHFELDER also stole money from investors in a real estate project called The Peaks Resort and Spa in Telluride, CO. Again, HOCHFELDER was a bidder for The Peaks, and solicited friends and business associates for loans and capital to finance the deal.  HOCHFELDER misrepresented the status of his actual interest in the deal, and concealed the fact that he was not under contract with the seller. His solicitations yielded HOCHFELDER nearly $2 million.  Unknown to his victims, HOCHFELDER again used their money to repay earlier creditors and to finance his own extravagant lifestyle. Of the money diverted from the victims, approximately $300,000 went to pay for HOCHFELDER’S criminal defense on his previous indictment and the rest was used to pay his personal drivers, private jets, private school for his children, rent, and other lavish expenses.
 
As detailed in court papers, as numerous problems came to light, several victims contacted HOCHFELDER and asked that their money be returned.  HOCHFELDER claimed that their investments were still safe and told them they need not worry because he maintained millions of dollars in his family’s trust accounts.  As a means of guaranteeing them that he could personally guarantee their investments, HOCHFELDER even provided some victims with forged documents he claimed showed that the  Hochfelder Family Trust accounts held anywhere between $11 million to $26 million. 

Assistant District Attorney Tanya Apparicio of the Frauds Bureau presented the case to the grand jury under the supervision of Bureau Chief Michael Kitsis and Deputy Bureau Chiefs Jeannette Molina and Micki Shulman.  Senior Investigator Patrick McKenna conducted the investigation under the supervision of Investigation Bureau Chief Joseph Pennisi, Assistant Chief Terence Mulderrig, and Supervising Investigator Steve Akselrod.  Trial Preparation Assistant Ariela Rosenberg of the Frauds Bureau and Investigative Analyst Jay Liang of the Financial Crimes Bureau under the supervision of Financial Crimes Bureau Chief Frank Puma also assisted in the investigation.

Defendant Information:

ADAM HOCHFELDER, 4/4/1971
435 E. 86th Street
New York, NY 10028

Charges:

• Grand Larceny in the First Degree, a Class B Felony, one count;
• Grand Larceny in the Second Degree, a Class C Felony, four counts;
• Grand Larceny in the Third Degree, Class D Felony, three counts;
• Criminal Possession of a Forged Instrument in the Second Degree, Class D Felony, nine counts;
• Identity Theft in the First Degree, Class D Felony, 12 counts; and
• Scheme to Defraud in the First Degree, a Class E Felony, two counts.

 
A Class B Felony is punishable by up to twenty-five years in prison; Class C Felony is punishable by up to fifteen years in prison; a Class D Felonies is punishable by up to seven years in prison, and a Class E Felony is punishable by up to four years in prison.

HOCHEFELDER’S 2008 indictment charged him with six counts of Grand Larceny in the First Degree, two counts of Grand Larceny in the Second Degree, twenty-four counts of Forgery in the Second Degree, twenty-four counts of Falsifying Business Records in the First Degree, and 1 count of both Scheme to Defraud in the First Degree and Offering a False Instrument for Filing in the First Degree. 

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New York County District Attorney | duggane@dany.nyc.gov | 212-335-9400