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FOR IMMEDIATE RELEASE |
CONTACT: Erin Duggan |
DISTRICT ATTORNEY VANCE ANNOUNCES RESULT OF GRAND JURY INVESTIGATION |
“This defendant cheated and lied to family, friends, and investors to steal their hard-earned money,” said District Attorney Vance. “He betrayed the trust of everyone who invested with him and used their money to fund his lifestyle.” According to documents filed in court, HOCHFELDER worked as Chairman and Chief Executive Officer of Max Capital Management Corporation, which he co-founded in 1996 with Richard Kalikow. In 2002, HOCHFELDER purchased Kalikow’s share of the business, and entered into a partnership with Anthony Westreich. Under the new partnership, Max Capital was a privately held commercial landlord and real estate firm in New York City. In 2004, the partnership between HOCHFELDER and Westreich dissolved. From October 2002 to March 2007, HOCHFELDER took on a series of personal loans from business partners, family, friends, and banks totaling almost $16 million by misrepresenting the value of his personal and professional holdings. Those loans included, among others, a $5 million dollar personal loan from North Fork Bank and an additional $5 million personal loan from Bank of America. Unknown to both banks, HOCHFELDER provided them with forged documents reflecting false information regarding his liquidity and assets. Within that same time period, HOCHFELDER also obtained a $600,000 loan from a childhood friend and a $700,000 loan from his uncle. In order to obtain those loans, HOCHFELDER fraudulently represented that certain collateral was unencumbered, where in fact the collateral was already over-leveraged by preexisting loans. HOCHFELDER also lured another family member into investing $1.3 million by creating a fictitious business venture, which purported to buy foreclosed Harlem and Brooklyn brownstones that the business would renovate and sell at a profit. In fact, no such venture existed. Beginning in August 2007, HOCHFELDER defrauded numerous investors in two real estate deals. The first involved his purported acquisition of the Sagamore Hotel on Lake George. In that scheme, HOCHFELDER falsely represented to investors that he was under contract to buy the Sagamore and solicited and received more than $500,000 from unsuspecting investors. The stolen money never went to the purchase of the Sagamore Hotel, but was instead used to pay HOCHFELDER’S personal expenses, including outstanding legal bills, overdue creditors, a personal driver, and trips on a private jet. In another scheme, HOCHFELDER misrepresented the status of his actual interest in a deal to purchase The Peaks Resort and Spa in Telluride, CO. In doing so, he lured in nearly $2 million from investors. HOCHFELDER used that stolen money to repay earlier creditors and to finance his own extravagant lifestyle. Of the money taken from the victims, approximately $300,000 went to pay for HOCHFELDER’S criminal defense on the first indictment, and the rest was used to pay for personal drivers, private jets, private school for his children, rent, and other lavish expenses. The sentencing for HOCHFELDER is scheduled for September 7, 2010. The defendant has agreed to pay restitution of $9.5 million. DA Vance thanked Assistant District Attorney Tanya Apparicio, of the Major Economic Crimes Bureau, who worked on this case under the supervision of Richard Weber, Chief of the Major Economic Crimes Bureau, Principal Deputy Chief Gary Fishman, Deputy Chief Micki Shulman, and Senior Investigative Counsel Michael Kitsis. Trial Preparation Assistant Ariela Rosenberg and Financial Analyst Jay Liang also assisted. Senior Investigator Patrick McKenna of the Investigation Bureau worked on the case under the supervision of Acting Chief Walter Alexander and Deputy Chief Thomas Jackson. ### Additional news available at: www.manhattanda.org New York County District Attorney | duggane@dany.nyc.gov | 212-335-9400
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