NYC real estate developer arrested in $86M+ fraud scheme
Photo courtesy of Nicole Franzen
The former executive of a luxury New York City development firm has been arrested for his connection to an $86 million fraud scheme. Nir Meir, the former managing director of HFZ Capital, was taken into custody on Monday along with other high-ranking industry officials, for stealing money from investors, subcontractors, and the city of New York, according to the indictment. Prosecutors claim Meir, who managed the firm’s largest projects, specifically The XI (now One High Line), directed more than $253 million of the project’s funding to LLCs controlled by HFZ despite being legally required to use the money for the development.
Instead of funding the Chelsea development, the money was used to cover financial challenges in unrelated HFZ projects, and in certain cases, was sent to the personal accounts of HFZ executives, according to the New York Post. This led to a shortfall of more than $37 million that was owed to Omnibuild, the construction firm brought on to build the project, and its subcontractors.
To hide the shortfall, prosecutors allege Meir conspired with other HFZ officials as well as Omnibuild executives to falsify monthly invoices. After a series of lawsuits brought the firm’s shady dealings to the surface, Meir allegedly had an HFZ accountant forge bank statements to show millions of dollars in remaining investor funding. In one instance, an account that had just $814 was made to appear as if it had more than $24.6 million, according to the indictment.
Two other former HFZ employees and three Omnibuild executives were also charged with counts of larceny, conspiracy, falsifying business records, tax fraud, and money laundering.
The case centers around the luxury condo development The XI at 500 West 18th Street. HFZ purchased the 908,250-square-foot property for $870 million in April 2015. Shortly after acquiring the site, HFZ brought on Omnibuild to build the structure, which began in 2016.
The building topped out in 2019, but before it could open, investors and contractors accused HFZ of missing payment deadlines and owing them millions of dollars, according to the New York Times. In 2020, Omnibuild backed out of the project. XI went into foreclosure in 2021 before it was completed and was eventually bought out by two new developers who relaunched the project and renamed it One High Line.
“These indictments depict allegations of widespread fraud within the real estate industry primarily spearheaded by one man: Nir Meir,” Manhattan District Attorney Alvin L. Bragg, Jr., said.
“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.”
Developers Witkoff Group and Access Industries took over the project in 2021, rebranding the project One High Line. Designed by Bjarke Ingels, the two-tower residential development features a distinctive twisting design that maximizes Manhattan and Hudson River views. Located at 500 West 18th Street, the development opened late last year.