Prominent New York real estate developer and former executive at HFZ Capital Group Nir Meir was charged with an alleged $86 million fraud that was carried out over several years.
On February 7, 2024, Meir was indicted by the Manhattan District Attorney’s office for allegedly participating in a multi-million dollar fraud scheme during his time at HFZ. He and five other real estate executives are accused of stealing at least $86 million from investors, contractors, and city tax collectors. Meir has been involved in several lawsuits and other legal disputes in recent years, including accusations of mismanaging funds and stealing from the company. He filed for bankruptcy in Florida last week.
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Manhattan District Attorney Alvin Bragg issued a statement saying, “These indictments depict allegations of widespread fraud within the real estate industry primarily spearheaded by one man: Nir Meir. In total, we allege these defendants’ conspiracies netted them a total of $86 million stolen from investors, contractors, and the City of New York. My Office’s Rackets Bureau is laser-focused on fraud in the construction and real estate industries and will continue to root out people who steal from investors and corrupt the market.”
The District Attorney’s Offices stated that in 2015, HFZ created the 76 Eleventh Avenue Property Owner LLC (“76 Eleventh”) to purchase the block of land between West 17th and 18th Streets between 10th and 11th Avenues for $870 million. HFZ hired Omnibuild Construction, INC. to build two mixed-use commercial and residential towers. Funding for the project was deposited into 76 Eleventh’s bank account and became “trust assets” pursuant to New York’s Lien Law. At the direction of MEIR, trust assets that were legally required to be used on this project were instead transferred to different LLCs controlled by HFZ, totaling more than $253 million in four years. Assets were primarily diverted to cover financial shortfalls on unrelated HFZ projects, and at times, to personal accounts controlled by HFZ executives, leading to a shortfall of more than $37 million owed to OMNIBUILD and its subcontractors.
The statement went on to allege that “when HFZ’s financial difficulties became public knowledge through a series of lawsuits, HFZ investors demanded to inspect its financial records. Meir directed an HFZ accountant to forge certain bank account statements to reflect millions of dollars in investor funds, when in fact, they were nearly empty.”
In one instance, Meir allegedly instructed the accountant to inflate statements for an account to purport it contained more than $24.6 million, when, in fact, it contained $814.
Charles E. Clayman, a lawyer for HFZ, told the New York Times that the company, which was also expected to be charged, would not comment until it saw the indictments.
Omnibuild spokesman Josh Vlasto said, “The evidence will show that HFZ stole from Omnibuild as it did from many others.”
HFZ Capital Group was founded in 2005 and is based in Manhattan. The company operates across all real estate disciplines — from underwriting to analytics, structured finance, investment, development, construction and asset management. It handles a wide range of asset classes including residential, office, hotel, retail, sports and entertainment.
