Former Omnibuild project manager Roy Galifi pleaded guilty this week for his role in running a kickback scheme at the XI condo development.
The Manhattan District Attorney’s office charged Galifi with orchestrating a fraudulent scheme with a subcontractor to steal an additional $300,000 from the XI’s lender.
Prosecutors promised Galifi a sentence of three years probation, including 90 days of home confinement, 250 hours community service and $51,000 forfeiture.
Galifi’s actions were unknown to his employer Omnibuild, which was the contractor for the XI project, or HFZ Capital Group, the XI’s developer, according to the D.A. Galifi’s attorney declined to comment.
Galifi is the latest defendant to plead guilty to the D.A.’s wide-ranging investigation into HFZ and its former principal Nir Meir. Prosecutors allege Meir was the mastermind of an $86 million fraud in which he moved money from one project to another and worked with others to inflate costs to obtain more money from lenders.
At the center of the scheme was the XI, a twisting condo development off of Manhattan’s High Line.
Meir has pleaded not guilty. He was recently released from Rikers Island, where he spent over a year detained after failing to pay bail.
During the course of their investigation into the XI, prosecutors discovered a separate scheme spearheaded by Galifi that they say was unrelated to Meir’s dealings with the development.
A subcontractor sent Galifi $300,000 in payments, according to prosecutors. In exchange, Galifi reimbursed the subcontractor by fraudulently inflating change orders to the lender.
The subcontractor created fake invoices in the name of Galifi’s consulting company, JCJ Consulting LLC, on two separate instances to disguise the nature of payments, according to prosecutors. The payments exceeded $50,000 and were processed through JCJ’s bank account.
At the time, Galifi worked for Omnibuild.
Prosecutors charged the firm, its former CEO John Mingione and accountant Kevin Stewart for their involvement in the $86 million fraud scheme. The D.A.’s office alleges Omnibuild worked with Meir and subcontractors to inflate monthly invoices. The invoices made it appear like the XI was further along than it actually was.
Omnibuild and Minginoe pleaded not guilty. They claim they are victims of Meir and HFZ’s bad acts. Recently, Omnibuild and Mingione came to an agreement with prosecutors to sever the case from Meir’s. The agreement would allow the cases to be pursued separately.
“Omnibuild and John Mingione’s case is totally separate and unrelated to Mr. Galifi’s matter, which is why we were pleased with the D.A. agreeing to sever our cases last month,” said a spokesperson for Omnibuild. “The plea has no impact on our legal process as we continue our path toward total exoneration.”
Last month, HFZ’s former head of construction Anthony Marrone pleaded guilty to one count of attempted grand larceny in the third degree and 14 counts of falsifying business records in the first degree. He is expected to be sentenced to probation.
Last year, HFZ pleaded guilty with no fine or punishment. Former HFZ project manager Louis Della-Peruta also pleaded guilty last year to a charge of falsifying business records. He is required to pay a $1,000 fine.
The D.A.’s office declined to comment.
Read more
HFZ’s Anthony Marrone pleads guilty in fraud scheme
HFZ Capital pleads guilty, blames Nir Meir
