Chetrit Group settles dispute over Kazakh embezzlement

Developer was accused of helping bigwigs hide $40M in condo projects

New York /
Nov.November 12, 2015 03:07 PM

Developer Joseph Chetrit has disentangled himself from allegations that he helped a banker and former politician in Kazakhstan launder tens of millions of dollars through two Manhattan real estate projects.

Following last month’s accusations, the developer settled with the city of Almaty and BTA Bank, one of the country’s biggest lenders — according to a joint statement Thursday. Previously, the city and bank accused Chetrit of helping the corrupt Kazakh bigwigs hide $40 million in two condo conversion projects.

“This dispute has been amicably resolved after cooperation by the Chetrit Group LLC and its affiliates,” the parties said in a joint statement. The city and bank “voluntarily dismissed with prejudice” its former claims against Chetrit.

According to a complaint filed in U.S. District Court in Manhattan, BTA Bank’s former chairman, Mukhtar Ablyazov, and Almaty’s former mayor, Victor Khrapunov, allegedly pocketed over $4 billion through embezzlement and corruption deals. Through a shell company, they invested in Chetrit Group and Clipper Equity’s Flatotel at 135 West 52nd Street and Cabrini Medical Center at 227 East 19th Street. The complaint accused them of doing so with Chetrit’s help, according to the filing.

Boies, Schiller & Flexner’s Matthew L. Schwartz, an attorney for Almaty and BTA Bank, said in a statement that as part of the agreement, the city and the bank “reclaimed a significant asset that was traceable to the billions of dollars that were stolen from them.”

Schwartz also said the city and the bank “secured the cooperation of an important witness” — the Chetrit Group — “as they continue to pursue their claims against … the people directly responsible for the crimes against Almaty and BTA Bank.”

According to the initial complaint, Ablyazov allegedly stole billions from BTA and Khrapunov allegedly stole about $300 million from Almaty.

One of the city’s most prolific developers, the Chetrit Group bought Sony Corp.’s former U.S. headquarters at 550 Madison for $1.1 billion in 2013. It co-owned the Willis Tower in Chicago, before selling it to the Blackstone Group for $1.3 billion earlier this year.


Related Articles

arrow_forward_ios
427 Broadway and Robert Frey (HGetty, THCNYC)
Former Vegas club owner bringing cannabis museum to SoHo
Former Vegas club owner bringing cannabis museum to SoHo
The Chetrit Group's Joseph Chetrit and Park West Village on the Upper West Side (Getty Images, Google Maps)
Chetrit, Stellar land $365M refi for UWS luxury apartment complex
Chetrit, Stellar land $365M refi for UWS luxury apartment complex
Joe Chetrit and the Hotel Carter Times Square at 250 West 43rd Street (Getty, Google Maps)
Chetrit gets $185M loan to renovate NYC’s formerly filthiest hotel
Chetrit gets $185M loan to renovate NYC’s formerly filthiest hotel
From left: Vorea Group’s Peter Papamichael, Turnbridge Equities’ Andrew Joblon and Chetrit Group’s Joseph Chetrit
Ranking New York’s most active developers
Ranking New York’s most active developers
Joe Chetrit with Empire Hotel (Empire Hotel)
Chetrit secures lifeline at Empire Hotel
Chetrit secures lifeline at Empire Hotel
A photo illustration of Yorkshire Towers, Lexington Towers, the Fifty Hotel & Suites and 475 Fifth Avenue (Google Maps, LoopNet, iStock)
Manhattan’s biggest loans in May led by rentals
Manhattan’s biggest loans in May led by rentals
Joseph Chetrit: The man from Morocco
Joseph Chetrit: The man from Morocco
Joseph Chetrit: The man from Morocco
Joseph Chetrit in front of 260 South Street (Chetrit Group, CityRealty, iStock)
Chetrit seals the deal on Two Bridges site
Chetrit seals the deal on Two Bridges site
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...