Gerald Brauser testified about a deal at commercial space in 62 West 62nd Street (Building photo source: PropertyShark)

One of Manhattan’s major parking garage owners, Gerald Brauser, took the stand last week as a government witness in the ongoing federal trial of two former Duane Reade executives accused of using bogus real estate deals to pump up earnings.
Brauser told the court that he was an unwitting participant in three transactions in Manhattan and New Jersey that prosecutors said were used to fraudulently boost the earnings of the drugstore chain, a review of court transcripts from April 26 shows. He also told the jury that he had a long relationship with Winick Realty Group CEO Jeff Winick, and had lent him more than $1 million over the years.
Brauser, who leads the Brauser Group, is the second major real estate investor to testify at the trial. Jeff Sutton, of Wharton Properties, testified April 20. Brauser and Sutton are not accused of any wrongdoing and prosecutors said there were landlords who were not complicit in the schemes. [more]

The ongoing federal trial of two former Duane Reade executives on
charges that they misled investors through bogus real estate
transactions may sully the reputation of one of the city’s leading
retail brokerage firms even though it faces no charges, real estate insiders say. Winick Realty, its CEO Jeff Winick and former president
Cory Zelnik have not been charged in the case but some of their
business deals are under scrutiny. “Once an allegation is made and
it goes through the media sound chamber, people who were only partially
paying attention will have it stick in their cranium,” said real estate
attorney Lawrence Lenzner, partner at Patterson Belknap Webb & Tyler,
who is not involved in the trial. “Even if it is 100 percent false,
enough people have heard it, his name has been disparaged and it can
take years to recover from that.” [more]

The defense in the federal trial of two former Duane Reade executives is painting a murky picture of two of the city’s leading retail brokers as the trial entered its second week. The brokers, who are not charged in the case, acted on a few deals with
Duane Reade as both landlord and broker. In addition, the trial has
painted a picture of a retail leasing environment in which landlords in a
few instances paid brokers in cash to avoid taxes, including one
instance of a suitcase filled with cash, though such cash dealings
didn’t occur in connection with the Duane Reade deals. Defense attorney Reid Weingarten, representing one of the two Duane
Reade executives accused of orchestrating sham real estate deals with
affiliates of Winick Realty Group, said that while the deals were not
bogus arrangements, they were pieces in a cloudy interconnected world
where payments flew back and forth between limited liability companies.
[more]

From left: Former Winick Realty President Cory Zelnik, former Duane Reade location at 4 Times Square, and current location at 225 Broadway (building photo source: PropertyShark)

In his second day on the witness stand, former Winick Realty Group President Cory Zelnik described additional allegedly fraudulent leasing transactions with drug store chain Duane Reade, this time at various city locations including one on lower Broadway damaged in the 9/11 terrorist attacks and another at the site of the Durst Organization’s One Bryant Park in Midtown.

Zelnik took the stand for his second day of testimony yesterday in a case brought by the United States Attorney in Manhattan against two former executives of drug store chain Duane Reade, who are accused of multiple crimes including securities fraud, which involved allegedly bogus real estate deals. Zelnik is not charged in the case, but is testifying under a grant of immunity from prosecution for his participation in the allegedly fraudulent deals. The defendants Anthony Cuti, former Duane Reade CEO, and William Tennant, a former CFO and senior vice president, who later served as an outside consultant for the drug store chain, are accused of conspiracy to commit securities fraud, filing false quarterly and annual reports, and other charges. They each face up to 20 years in prison. [more]

Former Winick Realty Group president Cory Zelnik says he paid for an expired lease at 1412 Broadway after moving Duane Reade to 1430 Broadway (building photos’ source: PropertyShark)

Former Winick Realty Group President Cory Zelnik testified yesterday as the first witness in the federal government’s securities fraud conspiracy trial of two former executives of the New York-based pharmacy Duane Reade. Zelnik told the jury that he and his former partner Jeff Winick, CEO of Winick Realty, engaged in a series of allegedly bogus transactions with Duane Reade that had no economic value, starting in about 2000. Neither Zelnik, Winick nor his company are named in the indictment, and Winick is not facing any charges. Zelnik agreed to testify on a grant of immunity from prosecution. Zelnik said he and Winick were partners in a real estate investment company called Danielle Equity Holding that in February 2001 paid Duane Reade a total of $806,000 for the right to control leases in eight properties valued at between $63,000 and $170,000 per lease although in fact the leases allegedly no longer had value. Zelnik and Winnick paid the money, he said, because they expected to get paid back and remain working with Duane Reade. [more]

From left: Cory Zelnik and defense attorney Reid Weingarten

The government and defense laid out their arguments in opening statements this morning in the trial of two former Duane Reade executives accused of pumping up share value including by creating allegedly bogus real estate transactions between the pharmacy and its primary broker Winick Realty Group. Assistant United States Attorney Jonathan Streeter told the jury that the deals between Duane Reade and Winick and other landlords and developers including Jeff Sutton, president of Wharton Properties — were bogus. “All this was done for Duane Reade to claim higher profits than they really had,” he said. Former Duane Reade CEO Anthony Cuti and former CFO William Tennant are facing multiple charges including securities fraud, filing false quarterly and annual reports, and filing false books. [more]

From left: Jeff Winick, CEO of Winick Realty Group, Cory Zelnik, founder and CEO of Zelnik & Company, and Duane Reade at 100 West 57th Street (building photo source: PropertyShark)

One of the city’s largest retail brokerage firms, Winick Realty Group, is a central element in a case set to go to trial tomorrow in which federal prosecutors accuse former executives of the drug store chain Duane Reade of deceiving investors through exaggerating millions of dollars of the company’s income, court records show.

Government prosecutors claim in an October 2008 indictment that Duane Reade executives Anthony Cuti and William Tennant orchestrated sham real estate transactions and other improprieties to pump up failing income statements.

Three companies affiliated with Jeff Winick, CEO of Winick Realty, are identified as being involved in 43 of 51 real estate deals the government alleges are not legitimate, court papers say.

While Winick was not identified in the indictment against Cuti and Tennant, court papers Cuti filed in January identify the brokerage Winick as the firm involved in the deals. Winick is not charged in the indictment and there are no allegations against Winick or his firm of wrongdoing. Jeff Winick said in an e-mail that he could not comment. [more]

Jennifer Mikitan, a former retail broker with Winick Realty Group and director of retail leasing with Sitt Asset Management, is taking over as the director of retail attractions with the Alliance for Downtown New York, an organization that promotes economic development in the Financial District. Mikitan, who also served as the sales director for the De Niro Group of Prudential Douglas Elliman at projects like the 55 Wall Cipriani Club Suites and the Tribeca Fairchild, will work to recruit retailers to the area and support retail brokers. Stephanie Jennings, the assistant vice president of economic development for the alliance, cited Mikitan’s background in real estate as a key reason for her selection. “We are excited to have [Mikitan] join our team, bringing both her enthusiasm for Lower Manhattan and her expertise in brokerage,” Jennings said. TRD

From left: The towers at West 37th Street; Thomas and Fred Elghanayan, the heads of TF Cornerstone; and Jeff Winick, head of Winick Realty Group

Developer TF Cornerstone has named the Winick Realty Group as its exclusive retail leasing agent for 11 properties. Winick
will be responsible for marketing the retail space at the TF
Cornerstone properties, containing more than 50,000 square feet of retail space. A top priority now is leasing out more than 28,000 square feet of retail real estate at TF Cornerstone’s new mixed use towers at 455 and 505 West 37th Street, near 10th Avenue, Winick said. TRD [more]

Jeff Winick

From the February issue: Over the last decade, Jeff Winick, CEO of Winick Realty Group, has helped retail giants like McDonald’s, Gateway and Exxon Mobil — among many others — expand their New York footprints. His long list of deals makes him one of the city’s top retail brokers. But with the deep market freeze, many of his clients have halted expansion plans. Still, there’s a hopeful mood among the firm’s 46 brokers in his Midtown office. “Now is a great opportunity for retailers to come to New York because they can finally afford it,” he said. Click here to take a look inside Winick’s office. (Note: Correction appended) [more]