Even as investors were demanding an explanation in 2017 for what had happened to their real estate investments, and even as banks were forcing an involuntary bankruptcy liquidation in 2018, and even after he was about to be indicted last year for swindling investors in a $58 million Ponzi scheme, Michael P. D’Alessio was transferring assets to his younger brother, Ronald.
The timing of those transfers is suspicious, according to Marianne T. O’Toole, the bankruptcy trustee for Michael D’Alessio’s estate.
Last month she sued Ronald G. D’Alessio and two real estate entities in federal bankruptcy court, White Plains, for allegedly abetting fraud.
Ronald D’Alessio, of Eastchester, did not respond to an email message asking for his side of the story.
Michael D’Alessio has filed numerous bankruptcy petitions for his Michael Paul Enterprises and myriad real estate entities. He pleaded guilty in November to wire fraud and concealing assets from bankruptcy court, and was sentenced last month to six years in prison.
Before he was sentenced he said, in a letter to the judge, that as a result of his criminal conduct, “Ronald is left without money and in search of a job to care for his 10-year-old son … and newborn baby.”
The D’Alessio brothers worked together as disc jockeys when they were teenagers, according to the trustee’s complaint, and have been engaged in business ever since. Ronald worked as a project manager for Michael. He was paid $1,000 a week, since 2000, and collected commissions on real estate transactions for his brother’s American Dream Realty in White Plains.
The trustee describes several suspicious transactions.
In late 2017, after Michael stopped making loan payments to investors, he made a deal to buy a house in the Royal Palm Yacht and Country Club, Boca Raton, Florida, for $1.3 million. Four months later, after banks and investors had sued him, Michael substituted his brother as the buyer.
Ronald bought the house a year ago for $1.3 million and then sold it in September for $1.1 million.
Around the same time that Ronald was substituted as the Boca buyer, Michael transferred interests in two properties on Schurz Avenue, in the Throggs Neck neighborhood of the Bronx, to Ronald for $50,000.
But the multi-family houses, according to the complaint, were worth at least $750,000 each, had at least $455,000 in net equity after mortgage considerations, and generated at least $33,509 a year in net cash flow from rents.
The property transfers, according to the trustee, “were not made for reasonably equivalent value or fair consideration.”
In October and November 2017, as Michael’s real estate enterprise was crumbling, he had made internet searches on “the biggest bank in the Dominican Republic” and “which country is best to hide money from us.”
Last June, he text messaged someone, “need some of my money tomorrow for Italy” and “I need my 100k I gave you to hold.”
Ronald’s passport shows that he made multiple trips to the Dominican Republic from December 2017 to summer 2018.
“Ronald may have traveled to the Dominican Republic,” the complaint states, “for the purpose of placing (Michael) D’Alessio’s assets outside of the United States.”
Last August, after Michael filed Chapter 7 bankruptcy, the complaint states, he wired $37,000 and then $50,000 to Ronald, without bankruptcy court approval.
This past January, Michael filed a $100,000 claim on his bankruptcy estate, identifying Ronald as a creditor for “money loaned” that he linked to an April 2018 promissory note.
The trustee issued subpoenas for Ronald’s documents about transactions with his brother. He has declined to produce most of the documents, the complaint states, and he has delayed appearing for an oral examination.
The trustee concluded that Ronald conspired with Michael to defraud the creditors in the bankruptcy cases.
The complaint accuses him of engaging in fraudulent transfers, unjust enrichment, conversion of assets and civil conspiracy.
The trustee is demanding that the transfers be voided, and that either the assets be returned to the bankruptcy estate or that the estate be paid at least $587,000 for the net value of the assets.