Bad businessman or scam artist?

May 14, 2010 3:21:37 PM PDT
They invested their hopes and dreams with a Brooklyn businessman only to be left broke and embarrassed. Millions of dollars are gone, but where to? More than a dozen victims are looking for answers in a money trail that Eyewitness News Reporter Jim Hoffer followed from New York to Florida. Is he just a bad businessman who invested unwisely or a scammer hoping to enrich himself with promises of pie-in-the sky returns on loans? Those who put their trust in Alexander Mikhlin from Brighton Beach say they've been betrayed by the smoothest talker in town.

A group of Brooklyn investors saw Alexander Mikhlin as a friend, honest and smart until they lost their money, all of it.

Eyewitness News Reporter Jim Hoffer: "How much did you lose?"
Sergei: "$90,000."
Hoffer: "How much have you lost?"
Michael: "Over $100,000 at this point."
Gina: "I loaned him $50,000, my daughter Olga $50,000, my sister $50,000 and friend of my Olga $75,000."

Promissory notes show many more people, mostly fellow Ukrainians now living in New York gave Alexander Mikhlin at least two million dollars in loans. An investment that promised a return of between 6 to 24 percent a year until he paid the loans back in full.

Mila: "For some time he did pay two percent a month."
Hoffer: "And then it stopped?"
Mila: "And then it stopped, 10 months ago it stopped."

So what did Alexander Mikhlin do with all their money? Did he use it when he bought a $140,000 dollar Bentley? Did he use the millions in borrowed money to buy his three condos in a luxury ocean front complex in Brooklyn, or a beautiful home in Austin Texas? Eyewitness News traveled to Florida to see if we could find Mikhlin at either of the two homes he bought there. In a gated community in Lake Worth, Florida we found one of his properties. It looked deserted. Court records showed the bank moving to foreclose on it. We then tried to find him at his second Florida home, a huge waterfront property in Palm Beach County.

The property looks a bit in disrepair. It's been a while since someone has lived in it. Still the home remains under his name. It's a waterfront property, in the back a huge lake, at one time worth more than a million dollars.

Mikhlin: "They will get money back."
Hoffer: "Will they get it all back?"
Mikhlin: "Absolutely."

We finally caught up with Alexander Mikhlin in Brooklyn where he told us he's working on new business ventures that will allow him to pay back everyone he owes.

Hoffer: "You're very charming, big smile. I find this hard to believe Mr. Mikhlin."
Mikhlin: "It will be paid back, I guarantee it."

At one time, Alexander Mikhlin was a partner in a successful currency exchange business called MG Financial. When he sold it, he seemed unable to strike gold again. A Brooklyn pasta business he helped to start failed, so to did a restaurant he owned, and all the real estate properties he's purchased are in various stages of foreclosure.

Mikhlin: "As soon as I realize some money, I'm going to pay back."
Hoffer: "How long must they wait?"
Mikhlin: "months. Two months maybe one month."
Hoffer: "Four weeks, you're going to pay them back two million dollars in four weeks?"
Mikhlin: "I think so."
Hoffer: "That seems hard to believe, sorry Mr.Mikhlin that's tough. You have all these plans but they still wait for their money?"
Mikhlin: "Yeah, I'm going to pay it back."

We showed Mikhlin's response to Mila Adato who says she and her family are owed hundreds of thousands of dollars.

"No, no I don't believe one word that he saying. No. It's amazing how he could be so calm when so many people around him are suffering," said Mila.

It's hard to tell whether Mikhlin is lying or if he truly believes he'll be able to pay everyone back. He sounds so convincing, but his investors say that's exactly the problem.

Hoffer:" What are the chances you're going to come up with two, three million dollars to pay them back?"
Mikhlin: "100 percent, 100 percent."
Hoffer: "100 percent?"
Mikhlin: "Absolutely, no questions asked."

It's been five weeks since Alexander Mikhlin told Eyewitness News that he would pay back his loans. Not only has he failed to do that, those who have lost money say they can't get him to call them back. The Brooklyn District Attorney now says Mr. Mikhlin is under investigation.

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