Real estate mogul charged in fraud scheme

August 28, 2008 6:13:48 AM PDT
A one-time hotshot manager and investor in the Manhattan real estate market was arrested Wednesday on charges he cheated banks, family members and other victims out of more than $17 million.Adam Hochfelder was awaiting arraignment in state Supreme Court on multiples counts of grand larceny, forgery and other charges. If convicted, he faces up to 25 years in prison.

Hochfelder's attorney, Paul Goldberger, questioned why prosecutors had his client arrested at his upper Manhattan apartment and didn't allow him to surrender even though "he's been cooperating with their office for the last four years."

"The idea that they'd come down and lock him up is ridiculous," Goldberger said.

He said his client, who was expected to be arraigned Thursday, has been in a treatment program for cocaine and alcohol abuse for two years.

Hochfelder, 37, made his name as a founder and chairman of Max Capital Management Corp., once one of the city's largest landlords of commercial property, including the Helmsley building on Park Avenue. In 2003, Mayor Michael Bloomberg appointed him to the city's Latin Media and Entertainment Commission along with luminaries including actors Antonio Banderas and Jimmy Smits.

Amid mounting financial troubles in recent years, Hochfelder came under investigation after borrowing millions of dollars from two banks, a business partner, his uncle, an in-law and a childhood friend.

Prosecutors allege he secured the loans by forging signatures and claiming he had a stake in property he never owned. They say he used the money on personal expenses and previous debts.

"He was very good at convincing people he was a successful entrepreneur," District Attorney Robert Morgenthau said Wednesday while announcing the indictment. "He was very persuasive."

Morgenthau said Hochfelder could face additional charges stemming from schemes involving other properties including The Sagamore resort, on Lake George in the Adirondacks, and The Westin Aruba Resort, in the Caribbean.

City Hall had no immediate comment.