Orange County Real Estate Speculator Pleads Guilty To Fraud
Attorney General Spitzer today announced that a Hudson Valley businessman pleaded guilty in Orange County Court to crimes committed in connection with a real estate scheme which defrauded investors out of hundreds of thousands of dollars.
Michael Sichenzia, 42, of Newburgh, pleaded guilty to the crime of Fraud in the Sale of Securities, a class "E" felony before the Hon. Stewart A. Rosenwasser. At sentencing, Sichenzia faces a mandatory state prison sentence as a second felony offender. Sichenzia was previously convicted in1988 for Grand Larceny arising out of a fraudulent scheme involving the sale of modular homes on Long Island.
At the time of his plea, Sichenzia admitted that between December 1, 1997 and February 2000, he engaged in a fraudulent scheme in which he purchased dozens of parcels of real property, mostly located in Newburgh, which he repeatedly resold at artificially high prices to family members and corporations he controlled, including: NHDV Equities, LLC; Modutek, LLC; Main Street Holding, LLC; Carrera Equities, LLC,; and Equity Partners, LLC. To create the appearance that the mortgage notes he had obtained were legitimate arm’s length transactions, Sichenzia generated numerous fraudulent documents. The documents purported to show down-payments had been made on the parcels of real property and overstated the income and assets of property buyers.
These fraudulent means provided Sichenzia with the opportunity to steal money from both institutional and private mortgage lenders. In some instances, he acted as seller of the properties, taking back a mortgage which he in turn sold to unsuspecting investors. In other instances, he obtained a mortgage directly but under false pretenses.
As part of a June 17 plea, Sichenzia agreed to pay $225,000 in restitution to private mortgage lender, Hanie Eng. The amount of additional restitution owed to Sichenzia’s other victims will be determined prior to sentencing.
The Attorney General’s Office commenced its inquiry into Sichenzia’s practices in selling the mortgage notes pursuant to its powers under New York State’s securities fraud statute, the Martin Act.
Investigators Michael Battisti, William Killgallon and Sondra Lavine of the Attorney General’s Office and the New York State Banking Department assisted in the investigation.
The case was prosecuted by Assistant Attorney General Christopher P. Borek, and Assistant Attorney General Lynnanne Tabbott