David E. Dweck’s Turret Equities has acquired distressed debt tied to 2 Higher East Facet rental buildings with a checkered possession historical past.
The buildings, 184 East sixty fourth Avenue and 227 East 67th Avenue, have been owned by a number of individuals accused or convicted of fraud over the previous decade. Their present proprietor, Continuum Analytics, defaulted on its loans and is going through foreclosures by its lender, Most popular Financial institution. Now, Turret Equities has bought a $19.9 million observe from Most popular, secured by the pair of buildings.
The acquisition expands Turret’s portfolio of Higher East Facet debt, having acquired a $15.5 million observe in 2024 secured by a nine-unit residential townhouse positioned at 7 East 88th Avenue. Turret declined to touch upon the acquisition.
Convicted fraudster Michael D’Alessio first bought the pair of buildings in 2016 and transformed them into five-unit luxurious condos with flashy names: The Gianna and The Jacqueline. However simply two years later, buyers in both of the properties sued D’Alessio for fraud, alleging that he fabricated development prices on the initiatives and moved hundreds of thousands of {dollars} into his personal accounts. He was finally charged by federal prosecutors for funneling over $58 million of investor cash to shell corporations he managed. He pled guilty to the costs and was sentenced to 6 years in jail.
His lender, Most popular Financial institution, purchased the 2 buildings at a bankruptcy auction in February 2019 for a mixed $32.5 million and sold them for $38 million two months later to Continuum, a California-based actual property information agency. Most popular additionally offered Continuum with a $29 million mortgage on the properties and refinanced the properties with an almost $20 million mortgage in 2023.
In 2024, two Switzerland-based entities agreed to pay Continuum $24 million for the buildings. The consumers put down a $1.2 million deposit and positioned the remaining steadiness in escrow. However Continuum allegedly tried to again out on the final minute. The would-be consumers sued Continuum in New York state courtroom, claiming it reneged on the acquisition settlement and in search of to place the property into receivership over allegations that Continuum owed greater than $460,000 in property taxes.
Continuum’s monetary troubles lengthen effectively past the Manhattan properties.
Southern California actual property magnate Gerald Marcil, who owns 1000’s of multifamily items, sued Continuum’s’ Mahender Makhijani in California state and federal courtroom claiming that Makhijani duped him into signing off on mortgage paperwork on quick discover, alleging elder abuse. Marcil’s lawsuit in federal courtroom says Makhijani used Nano Banc, an FDIC-insured financial institution that Marcil says Makhijani managed, to divert about $20 million to Continuum.
Final month, Makhijani was charged by federal prosecutors with defrauding Western Alliance Bancorp out of almost $100 million. He has pleaded not responsible.
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