Westchester Developer Charged With Real Estate Development Fraud

WHITE PLAINS, NY — A Westchester developer has been charged in federal court for operating a years-long real estate investment fraud scheme. Geoffrey S. Berman, the U.S. Attorney for the Southern District of New York announced Thursday that Michael D’Alessio, 52, of New York, was charged with wire fraud in connection with a scheme to defraud investors in luxury real estate development projects in Manhattan, the Hamptons, Westchester County and elsewhere.

Berman said D’Alessio, a former president and CEO of a real estate development firm, allegedly sought investments to develop specific real estate projects.

“In reality, D’Alessio allegedly commingled investor funds and used them to pay his own debt, fund his own gambling and pay personal expenses,” he said. “Michael D’Alessio has lost his alleged gamble to swindle his investors, as he now faces significant time in federal prison.”

Berman said D’Alessio, a career real estate developer and general contractor, would follow the same pattern in each real estate investment project. He would seek investments by offering for sale shares in a newly formed limited liability company.

He promised investors a guaranteed monthly interest payment and share in the profits from the sale of the property.

Authorities said he made numerous representations to potential investors, including that investor funds would only be used to develop the relevant property and cover related business expenses.

In reality, from 2015 through April 2018, D’Alessio used the funds for his own benefit, channeling the funds through a series of bank accounts held in the name of shell companies controlled and owned by D’Alessio.

He used the money to pay off debts and expenses and fund significant gambling, authorities said.

D’Alessio allegedly took additional steps to conceal his fraud, including deceiving investors regarding the progress of the projects’ development and raising money from new investors to make monthly payments to established investors in the manner of a Ponzi scheme.

The charge of wire fraud carries a maximum sentence of 20 years in prison.

In March, about 20 investors sued D’Alessio and his companies alleging that he had misappropriated millions of dollars from them that were meant for projects in Scarsdale, Manhattan and Long Island, the Journal News said.

In an attempt to collect $6.4 million from D’Alessio, three banks sought to force him into bankruptcy in April, the Journal News reported.

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