The Real Deal Miami

Daytona Beach resort developer arranged a transaction that the IRS deemed tax fraud

Documents in a federal lawsuit show that Alexy Petrovich Lysich arranged a $710,000 payment to a Bahamian shell company and falsely claimed the amount as a business expense
November 25, 2018 05:20PM

The Daytona Beach Convention Hotel & Condominiums construction site (Credit: Ox Blue | YouTube)

Documents in a federal lawsuit show that the Russian-born developer of an oceanfront resort in Daytona Beach controls a company that committed tax fraud.

An investigation by the Internal Revenue Service found that a company controlled by Alexy Petrovich Lysich wired $710,000 to a shell company in the Bahamas and falsely claimed the amount as a business expense.

The IRS ultimately ordered Lysich, a native of St. Petersburg, Russia, to pay taxes on the $710,000.

The Panama Papers, 11.5 million documents leaked in 2015, revealed details of more than 200,000 offshore entities including the shell company in the Bahamas linked to Lysich. The International Consortium of Investigative Journalists has reported that some of the offshore entities have been vehicles for committing fraud, evading taxes and avoiding international sanctions.

Lysich’s links to the Bahamian shell company and the IRS investigation are detailed in a lawsuit against him and his family and three of his companies, including Photogroup, the company Lysich is using to build a Daytona Beach resort called the Daytona Beach Convention Hotel & Condominiums.

Semyon Kremer, a former business partner of Lysich, filed the lawsuit, which alleges that Lysich and his father abruptly ended their partnership with him after he refused to help them make the $710,000 payment to Bahamian shell company Solinger Trading Limited look like a business expense.

Kremer’s suit, filed in U.S. District Court in New Jersey, alleges wrongful termination, retaliation and shareholder oppression, and claims more than $3 million in damages.

Lysich, his father Petr Lysich and his cousin Igor Fedorenko have filed a motion to dismiss the lawsuit.

Construction work on the Daytona Beach Convention Hotel & Condominiums stopped in October after Lysich’s Photogroup fired W.G. Yates & Sons as the project’s general contractor without explanation.

A spokesman for W.G. Yates told the Daytona News-Journal that the general contractor hadn’t been paid since June for its work on the $192 million resort – the most expensive oceanfront development of its kind ever built in Daytona Beach.

The Daytona Beach Convention Hotel & Condominiums is a hotel and condominium-hotel designed with a total of 501 rooms in a 28-story tower and a 31-story tower. The oceanfront development site is at the intersection of Oakridge Boulevard and State Road A1A in Daytona Beach. [Daytona News-Journal]Mike Seemuth