Former exec says Schorsch was in on discussions about American Realty Capital fraud

REIT founder hasn't been criminally charged

New York /
Jun.June 27, 2017 12:10 PM

The former chief accounting officer of American Realty Capital Partners testified this month that the company’s former chairman, Nicholas Schorsch, was involved in discussions about a quarterly earnings report that was inflated by $12 million.

In a federal courtroom earlier this month, Lisa McAlister described an all-night discussion between the companies executives in 2014 about how to handle the inflated earnings report, the Wall Street Journal reported. McAlister pleaded guilty last June to her role in the alleged fraud, but Schorsch hasn’t been charged criminally. He faces several lawsuits.

McAlister said the real estate investment trust was obsessed with hitting its financial projections.

“We must always hit our own numbers,” Schorsch wrote in an email, according to McAlister’s testimony.

In September, authorities arrested Brian Block, the company’s former chief financial officer, alleging that he purposely misled investors about the health of the company’s finances. Block was charged with inflating the REIT’s earnings in 2014 to hide an accounting error that drained the company of billions of dollars in value. Block has denied the charges. [WSJ] — Kathryn Brenzel 


Related Articles

arrow_forward_ios
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)
Real estate stocks push up this week as U.S.-China trade tensions ease
Real estate stocks push up this week as U.S.-China trade tensions ease
416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)
Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
What last year’s biggest real estate lawsuits mean for 2021
What last year’s biggest real estate lawsuits mean for 2021
What last year’s biggest real estate lawsuits mean for 2021
Extell's CEO Gary Barnett (Central Park Tower)
Barnett secures $380M mezz financing for Central Park Tower
Barnett secures $380M mezz financing for Central Park Tower
(Photo illustration by The Real Deal)
Hard money, hard decisions: Nonbank lenders face pressure to deal with problem loans
Hard money, hard decisions: Nonbank lenders face pressure to deal with problem loans
Bank OZK CEO George Gleason (Photos via Bank OZK; iStock)
Bank OZK’s Q4 was “strong end to challenging year”
Bank OZK’s Q4 was “strong end to challenging year”
Gov. Andrew Cuomo (Getty, iStock, NY State Budget)
Cuomo proposes tax credits for restaurants, income tax increases
Cuomo proposes tax credits for restaurants, income tax increases
Cindat Capital Management CEO Greg Peng and Hersha Hospitality Trust CEO Jay Shah with 51 Nassau Street (Google Maps)
7 Manhattan hotels head to auction block
7 Manhattan hotels head to auction block
arrow_forward_ios

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

Loading...