2 Long Island Men And Their Companies Convicted Of Fraud

Three men — two of whom are from the Five Towns — were convicted today, along with three companies, of defrauding financial institutions of millions of dollars and laundering the money through multiple businesses.

Kenneth G. Martinez, 51, of Lawrence; Shai Sellam, aka Sean Green,45, of Woodmere; and Hayim Jacob Barkol, formerly known as Kadir Barkol, 39, of Brooklyn; along with their companies Metropolitan Enterprises, Inc.; New Route Consulting, Inc.; and Lifting Up Management LLC, were convicted in Suffolk County Court of felonies for engaging in a $3 million loan fraud and money laundering scheme between October 2013 and April 2015. The conviction was announced by New York State Attorney General Letitia James.

The three-year-long investigation into the fraud was dubbed "Operation Skyfall."

“We are all committed to uncovering and prosecuting businesses that have defrauded the state and numerous financial institutions out of millions,” said James. “These fraudsters must now pay back stolen funds and cease their illegal operations. Let this be a lesson to every individual and company that we will never stop fighting against those who aim to defraud New Yorkers.”

As part of their guilty pleas, the three men and their corporations were ordered to pay a total of $1.5 million in restitution and judgments to financial institutions and to New York State.

Metropolitan was considered one of the largest scaffolding and hoisting contractors in New York State between October 2013 and September 2015. Public records show that in 2015, Metropolitan was a subcontractor for various work done on the George Washington Bridge and on the Oculus Project at the World Trade Center Transportation Hub. During this time, the three men used unpaid tax monies and the proceeds of fraudulently paid loans to keep the business afloat. By the time of the New York Attorney General’s first indictment in 2016, Metropolitan Enterprises, Inc. went out of business.

According to James, the three men perpetrated their loan fraud scheme by submitting fake invoices and a phantom deposit check purporting to sell scaffolding and hoisting equipment from one of Barkol’s entities to Metropolitan. In reality, the purported equipment either simply did not exist or was already owned by Metropolitan.

To promote and conceal scheme, the three laundered the stolen funds through multiple corporate accounts. Barkol would cut checks from his corporate account back to Metropolitan within a matter of days of receiving the fraudulently obtained funds, totaling almost the full amount of the money received from the bank. Monies were then moved between Metropolitan’s accounts and used to pay debts owed to other financial institutions, to cover negative balances, and to pay current and outstanding payroll and union dues.

On Aug. 7, 2019, the three men and their companies entered the following guilty pleas in Suffolk County Court:

• Kenneth Martinez pleaded guilty to second-degree money laundering;
• Shai Sellam pleaded guilty to third-degree money laundering;
• Hayim Jacob Barkol pleaded guilty to first-degree scheme to defraud;
• Metropolitan Enterprises, Inc. pleaded guilty to second-degree grand larceny;
• New Route Consulting, Inc. pleaded guilty to third-degree money laundering;
• Lifting Up Management LLC pleaded guilty to second-degree money laundering.

Martinez is expected to be sentenced to a concurrent term of three to nine years in prison on Oct. 17. Sellam faces up to two to six years in prison when sentenced on Aug. 12, 2020. Barkol is expected to be sentenced to five years of probation for his role in the scheme when sentenced on Oct. 17, 2019. As part of their sentences, the three must pay restitution and execute confessions of judgments on behalf of the financial institutions, totaling $1.5 million.

In addition to the loan fraud scheme, in June 2017, defendants Martinez and Metropolitan entered guilty pleas to Grand Larceny in the Second Degree in Albany County Court, related to their theft of sales and use taxes. Yesterday, Martinez was sentenced to three to nine years in prison. Additionally, both executed confessions of judgments for the benefit of the state Department of Taxation and Finance, in excess of $455,000.