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