Former President and CEO of a luxury real estate development company in White Plains pled guilty to federal charges after allegedly orchestrating a 58-million-dollar Ponzi Scheme. Last week, Michael D’Alessio pled guilty to one count of wire fraud and one count of concealing assets from a bankruptcy court following his arrest in August. Michael D’Alessio reportedly solicited investor funds for investments in luxury real estate development projects in Westchester, Manhattan and the Hamptons for years. In return for their money, investors were promised monthly interest payments and shares in the properties. Instead, Michael D’Alessio funneled investor money into multiple shell companies to repurpose at his leisure in a Ponzi-like fashion.
Michael D’ Alessio allegedly misappropriated investor funds that should have been used for investments in real estate through his company from 2015 until April 2018. Michael D’Alessio’s former company, Michael Paul Enterprises reportedly specialized in the design, construction, and management of commercial as well as residential real estate. As part of the alleged Ponzi-scheme, investors were offered shares in real estate properties with guaranteed monthly interest payments and profits. Our attorneys specializing in Ponzi Schemes know that any promises of guaranteed returns should usually raise a red flag.
In addition to the suspicious promises, our investment fraud attorneys find that Michael Alessio’s alleged behavior is indicative of your typical Ponzi Scheme perpetrator. In Ponzi schemes, a perpetrator solicits new investor money to pay falsified returns to existing investors. It is alleged that Michael D’Alessio created a limited liability company for each new property to offer shares. Michael D’ Alessio did not keep investor money within the appropriate companies as expected. Rather, Michael D’Alessio reallocated investors’ individual property’s money to cover shortages in separate ones as well as pay his personal expenses. For instance, Michael D’Alessio used investor money to pay off significant gambling debts.
Notably, Michael D’Alessio claims to allocate time and money to philanthropic organizations, according to his LinkedIn profile page. Such charitability does not surprise our Ponzi Scheme lawyers as perpetrators commonly use misappropriated investor funds to make donations. In a recent case, our securities law firm represented multiple investor claimants against a Rockland County alleged Ponzi Schemer with significant political ties and charitable donations. In fact, Ponzi Scheme perpetrators are known for establishing an overly generous reputation for building credibility in the eyes of potential investor victims. Eventually, Ponzi Schemers lose this trust when the falsified returns subside.
Once investor trust is lost, the Ponzi Schemes no longer have the funding to continue and ultimately fall apart. Despite his reported email apologies to investors, Michael D’Alessio must deal with the consequences for his multiple layers of alleged deceit and manipulation. On top of potential prison time, Michael D’Alessio is facing involuntary bankruptcy and numerous lawsuits initiated on behalf of his Ponzi Scheme victims. Earlier this year, a couple of his creditors filed a bankruptcy petition requesting that Michael D’Alessio liquidate his assets. Even in the bankruptcy proceedings, Michael D’Alessio allegedly lied about his assets and must face the subsequent charges. Ponzi Scheme perpetrators rely heavily on falsified information to keep their investment fraud alive.
Our investment fraud lawyers speculate that Michael D’Alessio had to come clean about having misappropriated investor funds after his alleged Ponzi Scheme crashed. Now, Michael D’Alessio faces a maximum of 25 years in prison for wire fraud and concealing assets in a bankruptcy filing, as well as financial penalties with conviction. Besides this case, Ponzi Schemes happen all the time, with many remaining undetected. If you believe that you may have lost money because of a Ponzi Scheme, contact our highly rated New York Ponzi scheme specialized lawyers for excellent legal assistance. For years, our team of securities attorneys has secured favorable settlements for Ponzi Scheme victims.