Real Estate Baron Chetrit Settles Kazakh Money-Launder Case
Joseph Chetrit, the developer of the most expensive New York City apartment ever listed for sale, settled a lawsuit claiming he helped launder money stolen from Kazakhstan by pouring it into two ritzy condominium projects.
The city of Almaty, the former capital of the central Asian nation, and BTA Bank JSC, the country’s third largest bank, voluntarily dismissed their claims against Chetrit and his development firm The Chetrit Group LLC, according to a Thursday letter to the judge overseeing the case.
BTA Bank and Almaty had claimed that Chetrit conspired to hide $40 million in real estate deals on behalf of two men who stole billions of dollars from Kazakhstan. Former BTA Bank Chairman Mukhtar Ablyazov and ex-Almaty Mayor Victor Khrapunov, whose families are related by marriage, fled the country and sought to shield their stolen wealth with investments around the world, according to the complaint.
“Almaty and BTA Bank have reclaimed a significant asset that was traceable to the billions of dollars that were stolen from them,” lawyer Matthew Schwartz of Boies, Schiller & Flexner LLP said in a statement Thursday. “BTA Bank and Almaty have also secured the cooperation of an important witness as they continue to pursue their claims.”
Schwartz declined to provide additional details of the settlement.
Chetrit and his lawyer, David Segal, didn’t immediately respond to phone and e-mail messages seeking comment on the allegations and settlement.
The alleged dirty money was channeled through a shell company and invested in Chetrit’s conversions of the Manhattan Flatotel and Cabrini Medical Center, according to BTA Bank and Almaty. Flatotel is a former 289-room apartment style business hotel on West 52nd Street. Cabrini’s condos, called “Gramercy Square,” were to hit the market with prices starting at $1 million to $33 million, according to the developer’s filings with New York state.
The Flatotel project has 109 apartments on 46 floors. The most expensive apartment was to be offered at $16.8 million, according to the filings.
As part of the settlement, Chetrit and his company will cooperate with Almaty and BTA Bank in their claims against Ablyazov and Khrapunov, Schwartz told U.S. District Judge Alison Nathan in the letter.
Chetrit Group in February set a price of $150 million for a triplex penthouse at 550 Madison Ave., the former U.S. headquarters of Sony Corp., according to documents filed with the New York state attorney general. It’s Manhattan’s most expensive residential listing and a deal at that price would top the $100.5 million paid for a penthouse at Extell Development Co.’s One57. Chetrit bought the Sony Building for $1.1 billion in 2013.
He was also among investors who sold Chicago’s Willis Tower, the second-largest building in the U.S., to Blackstone Group LP in March.
The case is CF 135 Flat LLC v. Triadou SPV, 15-cv-05345, U.S. District Court, Southern District of New York (Manhattan).
Bob Van Voris
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