NYC Developer Pleads Guilty to $27 Million Mortgage Scheme

Michael Hershkowitz, a Manhattan real estate developer, pleaded guilty in federal court to participating in a $27 million mail and wire fraud conspiracy.According to documents filed in this case, as well as statements made during the plea, Hershkowitz, working through a Manhattan real estate development company, the Kingsland Group, and related entities, fraudulently induced 70 individuals to lend the Kingsland Group more than $27 million, purportedly to fund the renovation of 16 multi-family apartment buildings located in upper Manhattan. Hershkowitz and co-conspirator Ivy Woolf-Turk falsely represented that the lenders would hold, as collateral for the loans, interests in first mortgages in the various properties in which they thought they were investing. However, the lenders did not hold recorded, first mortgages in the properties but instead were provided with forged documents falsely reflecting that the mortgages had been properly recorded with New York City. Interest was paid on the loans for some years after they were first made, but ultimately the principal on the loans was not repaid when due. It was determined that the lenders did not have valid first mortgages on the properties in question.