In the months after being sentenced to prison for his role in an NYPD corruption scandal, cooperating witness Jona Rechnitz, a former donor of Mayor Bill De Blasio, has been entangled in numerous lawsuits involving his diamond business in Los Angeles.
While several of Rechnitz’s former business partners are accusing the one-time New York real estate player of stealing millions of dollars worth of jewelry, a new court filing indicates that Rechnitz himself was the victim of a diamond robbery — and that the case is also linked to the troubled massive land parcel known as the Mountain of Beverly Hills, the New York Daily News reported.
According to court documents, the FBI is investigating “the alleged theft or taking by fraud of millions of dollars in diamonds while on consignment with Jadelle,” Rechnitz’ jewelry firm. Some or all of those millions have “recently been recovered and are being held as evidence,” Los Angeles assistant U.S. attorney Dan Boyle wrote in a Tuesday court filing in Jadelle’s Chapter 7 bankruptcy suit.
Last month, the Feds moved to seize the 157-acre Mountain, alleging it was purchased with part of $105 million embezzled from the Kuwaiti government by three high-ranking officials in Kuwait’s Ministry of Defense, which was then transferred to L.A. businessman Victorino Noval.
Noval’s son, Victor Franco Noval, sued Rechnitz early this year, alleging that the jeweler used his ties with the Kardashian family — his firm’s marquee clients — “to create a false sense of credibility” in support of a fraudulent scheme.
Another L.A. jeweler, Peter Marco, alleged in a separate suit that Rechnitz’s dealings were “eerily similar of the character Howard Ratner, played by actor Adam Sandler in the 2019 film ‘Uncut Gems,’ of a charismatic debt-ridden gambling addict.”
A government investigation has found that “some or all of the funds” for Victor Franco Noval’s dealings with Rechnitz “appear to be traceable” to Kuwaiti bank transfers that were used for future development of the Mountain, as well as the purchase of several Beverly Hills properties, luxury vehicles “and other lifestyle expenses,” the Boyle filing says.
The government is seeking a stay on discovery in the bankruptcy case, which it says is “critical for the preservation of the integrity of the government’s ongoing criminal investigation.”
Rechnitz left New York for his native Los Angeles in 2017, a year after his ties to a major NYPD corruption scandal were first uncovered. He is currently appealing his sentence, which consists of 5 months in prison and 5 months in home confinement.
The Mountain, which hit the market for a record $1 billion in 2018, was sold for just $100,000 at a foreclosure auction in August 2019 after no bidders other than the lender appeared. In May, the new owner tapped top New York City investment-sales broker Doug Harmon of Cushman & Wakefield to sell the property. [NYDN] — Kevin Sun