Westchester Real Estate Developer Sentenced For Wire Fraud

WHITE PLAINS, NY — A Westchester developer has been sentenced for his involvement in 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, 53, of New York, was sentenced to 72 months in prison. He pleaded guilty Nov. 8 to wire fraud and concealing assets from bankruptcy court 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 promised investors that he would develop and build luxury properties that would yield big returns.

"When the real estate market took a downturn, D'Alessio resorted to fraud," he said. "In the end, all he built was a Ponzi scheme that he used to rip off his investors of their hard-earned life savings to the tune of $58 million."

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.

In 2018, D'Alessio went into involuntary bankruptcy and submitted forms that fraudulently omitted money and property belonging to his estate. He also made a false declaration concerning his money and property.

At the time of his arrest in August 2018, law enforcement agents found $44,000 in cash, including $30,000 in a gym bag alongside a firearm. Following the arrest, law enforcement agents learned of a bank account he controlled which had a balance of $3,047.16.

D'Alessio's cellphone also contained text messages between him and another person in which D'Alessio stated "I need some of my money tomorrow for Italy" and "I need my 100k I gave you to hold."

All together, D'Alessio concealed at least $143,047.16 from the bankruptcy court.

In addition to the prison term, he was sentenced to three years of supervised release and ordered to pay forfeiture in the amount of $58,090,047.

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