Real estate con-man gets 85 years in $23M fraud

July 07, 2010 08:30AM

New York real estate investor Irving Stitsky, the ex-Cobalt Capital
Funding executive accused of defrauding more than 250 investors in a
$23 million scheme, was found guilty and sentenced to 85 years in
prison yesterday in Manhattan Federal Court, according to U.S. attorney
Preet Bhahara. Cobalt co-founders Mark Shapiro and William Foster were
also found guilty.

The multi-family investment trio is said to have duped
victims into putting money into Cobalt beginning in 2003, by
misrepresenting Cobalt’s track record and by concealing the fact that
Stitsky and Shapiro were already convicted felons at the time.

While
the scam was largely centered on properties in the South Beach section
of Miami, Fla., the partners were said to have carried out the crime
from a telemarketing center in Great Neck, N.Y.

In one case,
Stitsky, 55, allegedly told a potential investor that Cobalt owned the
Hotel Simone in Miami, which it did not. The lie allowed him to garner
millions of dollars of funding from the investor, which he and his
co-conspirators then used for their personal benefit, according to the
U.S. attorney’s office.

Stitsky has been ordered to pay $22
million in restitution in addition to the $23 million in profits he
will have to forfeit. Shapiro and Foster are slated to be sentenced
later this month. TRD