Yair Levy’s wife and daughter ordered to appear in fraudulent transfer case

By David Jones | January 18, 2013 04:30PM

The wife and daughter of developer of Yair Levy have been ordered to appear in court Feb. 21 on possible contempt charges, after failing to comply with subpoenas related to allegations that Levy fraudulently transferred property to them.

State Supreme Court Judge Joan Madden ordered Levy’s wife, Sosana, and daughter, Galit, to appear at a contempt hearing linked to a 2011 judgment for $11 million against the developer by Anglo Irish Bank, the lender at Levy’s failed Rector Square condominium at 225 Rector Place in Battery Park. (The Related Companies bought the debt at Rector Square and took over the project.)

The New York State Attorney General’s office in 2011 banned Levy from selling co-ops and condos, after a court ruled that he stole millions of dollars in reserve funds from Rector Square and used the money on personal and family expenses. He was ordered to pay $7.4 million to replenish the funds stolen from the reserve fund and compensate the condo buyers at the 303-unit complex.

Dallas, Texas-based Lone Star Funds acquired the debt from Anglo Irish, and filed suit to collect on the judgment. Lone Star, in court filings, alleges Levy’s wife and daughter failed to appear at depositions in 2012 that would help determine whether they received fraudulent real estate transfers designed to protect the developer from creditors.

In a Jan. 11 court filing, Peter Foster, the attorney representing Lone Star, cites three separate cases that may involve fraudulent asset transfers by Levy. On Feb. 15, 2012, Sosana Levy testified in a lawsuit by Rector Square unit owners that her husband transferred his stake in a 620 Sixth Avenue holding company to her and she transferred a small percentage of that stake to her daughter, Galit. RXR Realty acquired 620 Sixth Avenue from a group that included Levy, Joseph Chetrit and Charles Dayan.

Foster noted that a family trust received $8.9 million when the proceeds were sold, and Levy testified in the Feb. 15 deposition that she was receiving money from the trust. He also noted Lior Aldad, a trustee of the family trust, testified in a March 5 deposition that he wrote a check to Sosana Levy from the trust using the $8.9 million, and that check allowed her to buy another building in Manhattan.

Foster also said that in November 2009, Yair Levy gave Galit an interest in the shares of an entity called Nevada Owners Inc., in connection with an apartment at 2021 Broadway on the Upper West Side. Brian Belowich, an attorney for the Rector Square unit owners alleged in a December 2011 court filing that 50 percent of an apartment at that building was transferred to Galit for “no consideration,” meaning no money.

Foster declined comment. Yair Levy said he “cannot talk for them,” referring to Galit and Sosana. Galit Levy could not be reached for comment. Lawyers for Yair Levy could not be reached for comment. Attorney General Eric Schneiderman said it was not involved in this legal proceeding, through a spokesperson.