Over $1.7M “improperly” taken from Menachem Stark’s account: court filings

TRD New York /
Jan.January 23, 2014 09:40 AM

More than $1.7 million was “improperly” removed from slain Brooklyn landlord Menachem Stark’s bank account, according to court filings. United States Bankruptcy Court Judge Elizabeth Stong ordered a review of an account controlled by Stark and his longtime business partner Israel Perlmutter last week, after Stark’s kidnapping and murder earlier this month.

A subsidiary of lender Deutsche Bank, acting as a trustee for a 
defaulted $29 million loan on Stark and Perlmutter’s 74-unit Williamsburg 
rental property at 100 South 4th Street, prompted the review by filing an application for “interim emergency relief” to push for updated bank account records, as The Real Deal reported.

The building’s court-appointed trustee Jonathan Flaxer said in court filings seen by the New York Daily News that approximately $1.7 million had been recently taken from the account. Flaxer added that bank statements indicated that the building’s monthly operating reports to the judge “may have been tampered with to conceal the diversion.”

Another account that was meant to hold more than $200,000 only contained $3,500, Flaxer said in the filings, and “there is reason to believe that further monies have been misappropriated.”

Flaxer told the judge he wanted to depose Perlmutter about the missing funds, according to the newspaper, and was advised by Perlmutter’s attorney that his client would invoke the Fifth Amendment if he did.

A lawyer who received $150,000 from the South Side account in November was deposed on Monday, but refused to disclose details about his client or why the payment was made, according to the News. The lawyer repaid the money this week, court filings show.

Attorneys for Perlmutter and the trust did not return the newspaper’s calls seeking comment. [NYDN] – Hiten Samtani

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