RXR project among developments caught up in alleged Gambino mob scheme
Court documents filed by prosecutors accuse project manager at Yonkers development of accepting bribes
UPDATED, Feb. 14, 2020, 3:59 p.m.: An RXR Realty project in Yonkers is one of several ensnared in the alleged kickback and bribery scheme that led to the indictment of an HFZ Capital Group executive last year, according to court documents reviewed by The Real Deal.
A project manager for Larkin Plaza, developed by RXR and Yonkers-based Rising Development, accepted bribes in the form of free construction materials for a jiu-jitsu gym in White Plains that the manager is “associated with,” according to a Dec. 5 letter from federal prosecutors to U.S. Magistrate Judge Ramon Reyes Jr.
The project manager is not named in the letter. However, a Matthew Kachmar is listed on LinkedIn as a senior property manager at RXR and is also listed on the website of East Coast United Brazilian Jiu-Jitsu in White Plains as its CEO. When Kachmar answered the phone at his gym on Thursday, he indicated that he still works for RXR and declined to comment further on the case.
“The US Attorney’s office has confirmed RXR is not the subject of this investigation and there has never been any suggestion that RXR did anything improper,” a spokesperson for RXR said in a statement. “That said, we take these matters very seriously and immediately conducted a thorough internal investigation. We concluded that our employee in question had not done anything wrong. We shared our findings with the US Attorney’s office and our employee has agreed to cooperate fully with their investigation.”
Headed by Scott Rechler, RXR is one of the most active developers and owners in the New York area. The company’s holdings include the Helmsley Building at 230 Park Avenue and the Starrett-Lehigh Building in Chelsea.
The December letter details phone conversations between an alleged soldier and an alleged associate of the Gambino crime family — Vincent Fiore and Benito DiZenzo, respectively — who are accused of bribing various companies in exchange for contracts and other perks for their carpentry firm, CWC Contracting. In one call intercepted by the United States Attorney for the Eastern District of New York on Feb. 27, 2019, Fiore appeared to be upset about the cost of the materials sent to the jiu-jitsu gym, according to the letter. Fiore allegedly instructed DiZenzo to document the materials sent to the gym “on a separate spreadsheet, not on the computer.”
“I need you to write down every fuckin’ piece of material that we sent over there and I need to know the man hours that are over there,” he said, according to the letter. “Not on Procore [i.e., software used in the construction industry], but on the side. Alright?”
According to the letter, DiZenzo replied that he “put on Procore that they were working at Larkin.” Fiore allegedly indicated that the Larkin project manager signed off on CWC’s change orders, which prosecutors claim was one of the ways that the construction company inflated costs on its various projects.
During another government-intercepted conversation at CWC’s office, Fiore referred to the Larkin project manager as “kid.”
“The kid is not even making an attempt. . . . [W]e did the right thing. Listen, between labor and materials it’s gotta be over $40,000,” he said, according to the letter.
A source familiar with the situation who spoke on the condition of anonymity said RXR was unaware of the alleged scandal at Larkin Plaza until the indictment became public. The source characterized the employee involved as a low-level member of the firm and maintained that RXR has been cooperating fully with the investigation.
CWC, a carpentry firm based in Mount Vernon, is accused of giving HFZ Capital Group employees hundreds of thousands of dollars in kickbacks and bribes on the company’s XI project by the High Line between June 2018 and June 2019 as part of an alleged scheme involving the Gambino family. Prosecutors have accused 50-year-old HFZ managing director John Simonlacaj of letting the family skim hundreds of thousands of dollars from the development and other Manhattan projects.
Simonlacaj has been fired from HFZ and pleaded not guilty to charges of wire fraud, tax fraud and conspiracy.
According to the December indictment, employees of at least two other construction/development companies were involved in the bribery scheme, while CWC inflated change orders at another two general contractors. Court documents provide sparse details on these other businesses.
An archived version of CWC’s website listed RXR’s Larkin Plaza project as one of many New York developments it had worked on. Other major developers the company claims to have worked with include Extell Development, LAL Property Management and Sam Chang.
Some of these developers said they were unaware of their companies having worked with CWC. A representative for Chang’s McSam Hotel group previously told TRD that the company “does not have a relationship” with CWC, while LAL President Les Lerner said in an email that his firm had “never done any work with this company.”
Construction on Larkin Plaza began in 2016 and is nearing completion. The mixed-use project includes 439 rental units and retail space, and spans 358,000 square feet, according to marketing materials from the brokerage Lee & Associates.
UPDATE: This story has been updated to include a comment from RXR.