One of Developers Behind The “Piano District” Accused of Helping Launder Stolen Money

Joseph Chetrit of The Chetrit Group and one of the developers behind the attempt at rebranding Port Morris into the Piano District (as they are scheduled to develop six 25 market-rate luxury towers) and last week’s disastrous and tasteless gentrification party is being sued for allegedly helping a group launder $40 million.

According to Bloomberg:

“BTA Bank JSC accused developer Joseph Chetrit of using New York real estate investments to help launder money stolen from Kazakhstan.

The bank and the Central Asian nation’s former capital city, Almaty, claim Chetrit conspired to hide $40 million in real estate deals with two men who stole billions of dollars from Kazakhstan.

They said in a court filing that Chetrit aided former BTA Bank chairman Mukhtar Ablyazov and former Almaty mayor Victor Khrapunov, who fled Kazakhstan and sought to shield their stolen wealth from seizure by authorities in that country.

Ablyazov and Khrapunov, whose families are related by marriage, invested in condominium conversions of the Manhattan Flatotel and Cabrini Medical Center through a shell company with Chetrit’s help, according to the filing.

The new claims were filed in Manhattan federal court Monday in response to a July suit by Chetrit’s company. In its lawsuit, Chetrit Group LLC asked a judge to determine whether it should pay a disputed $21 million to the company allegedly controlled by Ablyazov and Khrapunov or to Almaty, which claims the money was stolen.

Chetrit and his lawyer didn’t immediately respond to phone and e-mails messages seeking comment on the allegations.” Read the rest: BTA Bank Says New York Developer Helped Launder Stolen Money

The Real Deal adds:

“The accusations center around the former chairman of BTA, Mukhtar Ablyazov, and the former mayor of Almaty, Victor Khrapunov.They allegedly stole over $4 billion through embezzlement and corrupt deals, and then fled the Central Asian nation, Bloomberg reported.

Using a shell company, the pair invested a small part of that money, relatively speaking, in condo conversions at the Chetrit Group and Clipper Equity’s Flatotel at 135 West 52nd Street, and Cabrini Medical Center at 227 East 19th Street, with Chetrit’s help, according to the filing.”

Who exactly is this man?

Well for starters he’s no stranger to controversy when in the early 1990s he pleaded guilty to a felony charge for violating customs law but only received a probationary sentence.

In 2011 in the Real Estate section of the Observer, Tom Acitelli wrote the article ‘Joseph Chetrit, the Most Mysterious Big Shot in New York Real Estate‘ and went on to say:

“Chetrit is not about being on the front page of the paper.” Instead, he is known to be part of that nebulous group of New York real estate moguls wary of the attention garnered by the likes of Douglas Durst and Bill Rudin. Mr. Chetrit has more in common with men like Lloyd Goldman, perhaps the city’s biggest individual private landlord, who takes the subway to inspect his dozens of buildings, and Ruby Schron, who controls his estimated 15-million-square-foot empire from Brooklyn, with the help of several sons. They deal in the shadows, content to cultivate auras of savviness and even fear, emerging only reluctantly. Characteristically, Mr. Chetrit and members of his family, a Moroccan clan who made their initial money in textiles, did not respond to several interview requests. But for a man who seems to so thoroughly eschew the spotlight, he continually scoops up very high-profile properties, including one of the most famous buildings in the world, the former Sears Tower. Most recently, he acquired one of New York’s most notorious properties, the Chelsea Hotel, for $80 million in May. While Mr. Chetrit and his family seem to have navigated the past three years relatively unscathed, the Chelsea deal casts the spotlight on a firm confronting a host of troubles just as the recession seems to be abating in New York. He currently faces special servicing (a pit stop toward foreclosure) on a large downtown office building, a hurried stake sale for his most prominent possession, and the effects of a discrimination lawsuit from a former employee that provides details of life inside the Chetrits’ orbit.   JOSEPH CHETRIT EMERGED 20 years ago in New York, the brother sent to America to further a family’s fortunes, first through apartment buildings in Brooklyn and Queens, and then through commercial property all over, ascending by the middle of the last decade to the peak of real estate in this country. He had a rocky start in the U.S. as an importer/exporter of textiles. In early 1990, he pleaded guilty to one felony count of violating customs laws and was sentenced to three years’ probation. The wrist-slap may have turned his attention to something more substantial than fabric. He began with outer-borough residential properties, spinning together a portfolio that sold for $70 million at the tail end of the early-’90s recession. With that money, he turned to commercial properties, starting with the West 44th Street tower in 1994. Through that decade and into the next, as the commercial real estate market took off, Mr. Chetrit took his empire national from a 400,000-square-foot warehouse in Philly to Giannini Place in Los Angeles, the birthplace of what became Bank of America. Mr. Chetrit bought low, sold high and repeatedly made a killing. During this run, he reportedly made hundreds of millions and had staggering amounts of cash at his disposal. One broker remembers Mr. Chetrit’s proving his solvency to a potential seller by showing him his checking account balance: $100 million.”

Folks, these are the people our Borough President Ruben Diaz, Jr, and South Bronx Overall Economic Corporation are dealing with and selling out our borough to. It’s one thing to bring in investments to help our people and borough but it’s an entirely different thing to bring in people with dubious past histories and those in litigation over allegations of criminal activity.