Former CEO Of Real Estate Private Equity Investment Firm Sentenced To 5 Years In Prison For $58 Million Securities Fraud

 

 Damian Williams, the United States Attorney for the Southern District of New York, announced that ERIC MALLEY, the founder and former chief executive officer of real estate private equity investment firm MG Capital Management L.P., was sentenced by United States District Judge Edgardo Ramos to 60 months in prison in connection with a securities fraud scheme in which he fraudulently induced hundreds of individuals to invest a total of approximately $58 million in two real estate investment funds.  MALLEY pled guilty before Judge Ramos on May 20, 2021.

U.S. Attorney Damian Williams said: “For years, Eric Malley swindled investors through false promises about himself, his credentials, his track record, and the state of his real estate investment funds.  This sentence sends an important message that there are grave consequences to such deception.”

According to the allegations contained in the Complaint, the Information to which Malley pled guilty, other court documents, and statements made in public court proceedings:

MALLEY founded MG Capital Management L.P. (“MG Capital”) in approximately January 2013, and served as its chief executive officer and chief investment officer from that time until approximately December 2019.  During that time, MALLEY formed two real estate investment funds (collectively, “the Funds”) – MG Capital Management Residential Fund III (“Fund III”), in approximately February 2014, and MG Capital Management Residential Fund IV (“Fund IV”), in approximately September 2017.

MALLEY promised, when soliciting investors and throughout the life of the Funds, that the Funds represented an opportunity to own an equity interest in hundreds of luxury income-producing properties across Manhattan, following a debt-free investment strategy purportedly informed by sophisticated proprietary analytics that MALLEY had developed over the course of his career in real estate.  MALLEY touted two purportedly extremely successful prior funds he had formed, Fund I and Fund II; assured investors that the Funds would be and were debt-free; and represented that the properties held by the Funds would be and were leased primarily to corporate tenants, including, among others, well known technology companies and a prominent university based in New York City with which Malley had pre-existing agreements.  But MALLEY’s representations were false.  Funds I and II did not exist.  The Funds were not debt-free, but instead held mortgaged properties. The properties that made up the Funds were almost entirely leased to individual, not corporate, tenants.  Malley did not have the corporate relationships or pre-existing agreements he touted.  The Funds held far fewer properties than MALLEY had represented.  And although Malley promised the investments were fully protected from loss, they were not.

MALLEY induced approximately 335 investors to invest a total of approximately $58 million in the Funds through these and other fraudulent misrepresentations.  The Funds together incurred millions of dollars in losses and are currently being liquidated.

In addition to the prison term, MALLEY, 51, of New Canaan, Connecticut, was sentenced to three years of supervised release and ordered to make restitution in the amount of $33,249,822.12 and forfeiture in the amount of $5,625,747.45.

Attorney General James’ Office of Special Investigation Releases Report on the Death of Tyler Green

 

  New York Attorney General Letitia James’ Office of Special Investigation (OSI) today released its report on the death of Tyler Green of Oneonta. Following a thorough and comprehensive investigation, OSI concluded that an officer from the Oneonta Police Department was justified in his use of force to prevent Mr. Green from killing a child.

At the time of the incident, Tyler Green and his partner were the parents of a nearly two-year-old boy. On April 6, 2021, the partner, her sister, and the child were visiting Mr. Green at his home in Oneonta. Because of violent threats made by Mr. Green, the sister left the home and secretly drove to the Oneonta Police Department to tell them of her fears for her sister and the child. Members of the Oneonta Police Department decided to conduct a welfare check on the child. While on their way to Mr. Green’s home, they received a dispatch that Mr. Green allegedly threatened to stab his partner with a knife.

Two officers drove to the home and saw Mr. Green, his partner, and the child in the front yard. Mr. Green pulled a knife from his pocket, lunged at his partner, and threatened to kill her. The officers drew their guns and instructed Mr. Green to drop the knife. Mr. Green then cut his partner’s leg with the knife and swung the knife at one of the officers.

He then grabbed his two-year old son by the leg, and as he began to swing the knife at the child, one of the officers fired two shots striking Mr. Green, who immediately released his hold on the child. Officers called an ambulance and provided care to Mr. Green before it arrived. Mr. Green was initially transported to a local hospital, but that hospital was not equipped to treat Mr. Green, so he was in the process of being transported by helicopter to another hospital when he was pronounced dead.

Analyzing the officer’s conduct under New York’s justification law, OSI concluded he was justified in his use of deadly force, as it was reasonable to believe that Mr. Green was about to use deadly physical force against the child and that only the officer’s use of deadly physical force could prevent him from doing so.

OSI also reviewed the medical care Mr. Green received after he was wounded and observed that New York law prohibited medical personnel from giving him blood during his medevac flight from Oneonta to Albany. Therefore, the Attorney General James recommends that New York consider joining every other state in the nation and permit air ambulances to carry and provide blood to critically injured patients.

“After a complete and exhaustive review of this incident, my office concluded that the officer was justified in his use of force to protect the life of a two-year old child,” said Attorney General James. “While this situation was tragic, it could have been even more devastating if not for the actions of the responding officers. Members of law enforcement put their lives on the line every day to protect our communities, and these officers bravely and responsibly fulfilled their duty.”

THE NEW BXCC - Bronx Business News You Can Use

 

Legislative Updates, New Grants, Events and Much More Please click View/Allow Images so you don't miss a thing!

This week's Friday Extra comes from Sara Bonizio. Topics are: Bronx Chamber Annual Holiday Party and Annual Board Meeting (12/9/21): bronxchamber.org/events A Happy Hanukkah to all who celebrate! Secretos CEO television launch The upcoming opening of the Bronx Children's Museum in 2022 Queens Chamber of Commerce Annual Gala For business resources visit www.smallbiz.nyc

Upcoming Events

Bronx Chamber Annual Holiday Party & Toy Drive

The holiday season is finally here — which means it's time to deck the halls, bring out the holiday cookies and embrace all things merry and bright. Join the Bronx Chamber for our annual Holiday Party at Villa Barone Manor on Thursday, December 9th. Wear your best ugly sweater for our #uglysweatercontest and bring a toy for our #TOYDRIVE. This years Toy Drive recipient is New Settlement. The New Settlement Community Center serves students from three schools, their families and members of the surrounding community with a range of programs in health and nutrition, education, youth development and the arts. Purchase your tickets HERE.

What You Should Know

Chamber in the News

Check out Francisco and Sara on BronxNet's OPEN BxRX with Rhina Valentin, discussing the ways the Bronx Chamber is supporting small businesses throughout the holiday season (and all year 'round)!

Struggling Bronx small businesses get a boost from Fidelis Care

In partnership with Fidelis Care, a health plan serving more than 2.3 million members across New York State, the Bronx Chamber of Commerce recently announced that the following Bronx small businesses each received a one-year complimentary membership as part of the chamber’s inaugural 2021 Adopt-a-Member initiative: The Bronx Collab Space, Eppsolutely Clean Maintenance, YVP Media Services, Angela Beauty Lounge, The Bharati Foundation, Bronx Bangladeshi Society, Mexican Coalition and Riverbay Corporation.  “So many Bronx businesses that have survived the pandemic thus far are still struggling,” said Bronx Chamber President Lisa Sorin.  Read More

Our gift to you – get a brand new website for free!

Tis the season to get your business online and grow your customer base! The Small Business Resource Network is offering website builds and SEO consultation completely free for eligible businesses. As more and more customers shop online, there is no better time to sign up than now. Apply here and a support specialist will reach out to you to get you started.   Check out the directory of completed projects!   Tis’ the season to #shopsmall   The Small Business Resource Network has been working around the clock providing small businesses free digital tools to help expand their customer base. This week we launched a catalogue of 100 businesses who have received a free new website through our “Open + Online” program. Whether you are shopping for gifts or looking to order takeout, please support one of our local businesses this holiday season!

The Small Business Growth Fund

Hello Alice is awarding 50 small business owners with $5,000 grants to help them make their next big move in 2022. To be eligible, a business must have less than $1M in annual revenue, a commitment to diversity and community, and a clear plan to use the grant funds. Applications for Round 1 are open now through December 10, 2021 at 6PM ET. For a full list of eligibility criteria, please see the Terms and Conditions.

Crain's Business Forum

With New York's legalization of adult-use marijuana expected to be up and running by late 2022, the industry is expected to generate north of $4 billion in overall sales. This translates to $350 million in tax revenue. How can state offices ensure communities that historically had been criminalized by marijuana laws have an opportunity to do business in the emerging industry? Join us on December 15th to learn more! Register Here

The NYS Restaurant Resiliency Program

Administered by the NYS Department of Agriculture & Markets, the Restaurant Resiliency Program provides grants to restaurants that offer meals and other food-related items to New Yorkers within distressed or underrepresented communities. The program will provide New York's regional food banks with the funding to purchase prepared meals from New York restaurants and deliver them to families in need. Check out the Program Rules, Terms and Conditions for more information and click here to apply to be one of the restaurants participating.

FYI: Payments on Vaccine Mandate for Human Service Contracts

The City has announced that eligible vaccine-related expenses ($500 vaccine incentive for employees and up to 4 hours of paid leave to employees to accompany their children, 5 to 11 years old, to each COVID-19 vaccination) can be reimbursed on DYCD contracts for DYCD funded contracted staff. If you have made these expenses, below is the process to ensure you are reimbursed:  When you have identified the applicable staff, please mod the amount needed to the incentive line in your budget and submit the “Budget Modification Justification Form” detailing the number of staff who received the $500 vaccine mandate incentive and the staff whose hours will be charged for up to 4 hours. The “Budget Modification Justification Form” can be found here. For reimbursement, please submit a separate invoice for funds on the indirect line labeled “vaccine mandate” and attach the enclosed DYCD provider attestation form with the requested information. For audit purposes, we strongly recommend that staff hours charged are reflected in your organization’s timesheets and payroll records. Additionally, there should be record-keeping of all staff who were given a gift card. As we are in the second quarter of the fiscal year and all funds have not been exhausted, any requests for additional funds can be submitted to your program manager in April. Upon review, DYCD will add the supplemental funds. If you have any questions, please send them to cafdhelp@dycd.nyc.gov

Bronx Chamber Member Event Spotlight

Let It Shine with GLOW & Holiday Train Show

Experience the magic of New York City’s longest outdoor illuminated color spectacle at the Botanical Garden.   Select Evenings through January 22; 5–10 p.m.   The holiday season has begun and GLOW is a hit! Discover an outdoor wonderland featuring thousands of dazzling lights—enjoy a bite to eat from fellow Bronx Chamber member The Bronx Night Market, take in music from Steel Pan Holiday, and marvel at artistic ice sculpting. Round out your visit with an evening viewing of the Holiday Train Show® by purchasing a combination ticket.   Get Tickets   Please note: valid proof of COVID-19 vaccination and ID will be required for entry to indoor exhibition spaces and facilities, and all dining areas.