The Real Deal New York

NY-based developer of failed Vegas project faces fraud claims

Edge Group alleges Jason Halpern set up shell companies to shield assets from judgment

July 31, 2012 05:30PM
By David Jones

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From left: 166 Perry Street and a rendering of the W Hotel in Las Vegas

New York developer Jason Halpern is facing allegations that he wrongfully shielded his West Village condominium apartment and other assets from a $2.08 million judgment related to the failed W Hotel, Casino and Residences in Las Vegas. The Dallas-based Edge Group filed suit against Halpern in New York State Supreme Court on July 19.

Lawyers for Edge, the co-developer of the casino project, claim that Halpern is living off a $10 million life insurance policy that was placed in a trust and recently sold a $3 million apartment at 166 Perry Street, but is fraudulently shielding the assets to prevent paying out the judgment. They also claim that Halpern has shielded many of his real estate holdings through various shell companies and missed scheduled depositions, according to court filings.

“It’s our view that he’s not the destitute real estate developer he claims to be,” Scott Ziluck, an attorney with Halperin Battaglia and Raicht, which represents Edge Group, told The Real Deal.

“The allegations are without merit,” said Herrick Feinstein partner William Fried, who is defending Halpern. “We will vigorously defend them.”

Halpern, the developer of 184 Kent Avenue, a converted Williamsburg rental building, was part of a group involved in the canceled $2.5 billion W Hotel in Las Vegas, a massive project that would have included 3,000 rooms, luxury condo units and a 75,000 square feet of gaming space.

Brian Roche, a former tight end for the Dallas Cowboys, filed suit against Edge in 2006, alleging his group was pushed out of the original development team. As a result, Edge Group settled the case for $550,000, and incurred another $1.3 million in legal fees. In December 2010, a Nevada judge ruled that Halpern and other investors agreed to indemnify Edge against such litigation, and issued the judgment.

The Edge suit claims that during 2008 and 2009, Halpern set up various shell companies to shield his assets from creditors knowing that this suit was pending. Halpern has been involved in other legal proceedings, which the suit alleges added to the need to protect his assets.

Halpern’s company, JMH Development, was named in a September 2011 racketeering suit by two local unions. That suit alleged that JMH worked with HRH Construction (which later filed for Chapter 11 bankruptcy protection) to cheat workers out of wages and benefits. Halpern was not named personally in that case.

Halpern did not return calls for comment. A lawyer for JMH declined comment.

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