North Country Gazette



Real Estate Developer Guilty Of $27M Ponzi Scheme

Posted on Wednesday, 25 of November , 2009 at 8:28 pm

MANHATTAN—Manhattan real estate developer Ivy Woolf-Turk was sentenced this week to five years in prison for her participation in a $27 million Ponzi scheme involving obtaining fraudulent loans secured by nonexistent mortgages.

Woolf-Turk, working through a Manhattan real estate development company, The Kingsland Group, Inc., and related entities, fraudulently induced approximately 100 individuals to lend the Kingsland Group over $27 million to fund the renovation of approximately sixteen multi-family apartment buildings located in upper Manhattan.

Prosecutors said Woolf-Turk and a co-conspirator, Michael Hershkowitz, falsely represented that the lenders would hold, as collateral for the loans, interests in bona fide first mortgages in the various properties in which they thought they were investing. In fact, Woolf-Turk did not record mortgages on behalf of the lenders. Some interest was paid to some of the defrauded lenders with loans made by other victims, and Woolk-Turk and Hershkowitz made false statements to investors about the status of their loans.

Ultimately the principal on the loans was not repaid when due, and the lenders learned that they did not have valid first mortgages on the properties in question, as they had been promised.

Woolf-Turk, 53, of Port Washington, pleaded guilty to one count of conspiracy to commit mail and wire fraud.  In addition to the five-year prison term, she was ordered to forfeit $27.18 million,  representing the funds obtained through the fraud.

Hershkowitz of New York City pleaded guilty to a similar one-count Information on March 23 and is scheduled to be sentenced on Dec. 21.  11-25-09

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Category: Courts, Crime, New York State, Real Estate

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