In court yesterday, Flaxer said that the apparent embezzlement from South Side LLC started a "protracted period of time" before Nov. 6, 2013 – the date of a suspicious bank statement previously provided to the court.
Menachem "Max" Stark
Alleged Embezzlement From Murdered Slumlord’s Business Account Began “A Protracted Period Of Time” Before Previously Thought, Almost $2 Million Missing
Shmarya Rosenberg • FailedMessiah.com
Bank statements of a company owned by murdered Satmar slumlord Menachem “Max” Stark appear to have been tampered with to hide the embezzlement of more than $1.7 million from the company's accounts, Jonathan Flaxer, the bankruptcy trustee for the bankruptcy of South Side House LLC, one of Stark's real estate companies, said in papers filed in Brooklyn bankruptcy court Wednesday.
The apparent embezzlement was first raised last week by German American Capital Corporation, a subsidiary of Deutsche Bank with a claim in the bankruptcy proceeding against South Side LLC.
Flaxer, who was was appointed last week as trustee in South Side House LLC’s bankruptcy, also noted in those filings that a rent security account for one of South Side House LLC’s properties was almost completely empty. The account has only $3,500 in it but should have more than $200,000. This has caused Flaxer to believe "that further monies have been misappropriated.”
In court yesterday, Flaxer said that the apparent embezzlement from South Side LLC started a "protracted period of time" before Nov. 6, 2013 – the date of a suspicious bank statement previously provided to the court, Newsday reported.
As reported earlier this week, an attorney who received $150,000 from the South Side LLC in November was reportedly deposed Monday. He refused to say who his client was or why the money had been paid him, except to say that it was Brooklyn real estate related. Court filings reportedly show that he now repaid the money.
Flaxer has subpoenaed Stark's business partner, Israel “Sam” Perlmutter, Stark's wife, and others. Perlmutter already told the court through his attorney that he intends to plead the Fifth and refuse to answer any questions posed by Flaxer or Flaxer’s attorneys or his attorneys.
Stark was kidnapped in front of his Williamsburg office late on January 2 and was found murdered in a garbage dumpster in Great Neck, Long Island the next day.
He and Perlmutter owe tens of millions of dollars in defaulted loans and allegedly owe millions more to private lenders and loan sharks.
Stark himself reportedly moonlighted as a loan shark, offering short term bridge loans to fellow businessmen at extremely high rates of interest.
He and Perlmutter and several other business associates and family members were allegedly involved in a scheme to defraud lenders. Stark and Perlmutter would allegedly intentionally default on distressed buildings and their business associates and family members would then buy those properties from the lenders at heavily discounted prices. The scheme was allegedly concealed in part by flipping properties from LLC to LLC, all actually owned by the same people.
[Hat Tips: Seymour, The Lion.]