A bankruptcy trustee wants to claw back nearly $1.2 million that convicted fraudster Michael P. D’Alessio paid to an Indian casino, his accountant and his brother-in-law.
Marianne T. O’Toole, the trustee, filed three adversary proceedings April 20 in U.S. Bankruptcy Court in White Plains that names the Seminole Tribe of Florida, accountant Anthony Capeci of Huntington and brother-in-law Domenick Schettino of Purchase.
O’Toole claims that most of the payments were improper because they were made after a Chapter 7 liquidation petition was filed and were not approved by the court.
Some of the payments were made to Schettino before the bankruptcy petition was filed. They were fraudulent, the trustee contends, because D’Alessio knew he was broke and owed money to creditors and because Schettino was an insider.
In 2018, three banks filed the Chapter 7 petition against D’Alessio – head of White Plains commercial and residential development company Michael Paul Enterprises – claiming he owed $6.3 million.
Then the federal prosecutor accused him of swindling investors in a $58 million Ponzi scheme, over failed real estate projects in Manhattan, the Hamptons and Westchester.
D’Alessio pleaded guilty to bankruptcy fraud, for concealing assets. Last year, he was sentenced to six years in prison.
In 2017, as his real estate developments were floundering, D’Alessio allegedly made 19 payments to Schettino, from personal bank accounts, totaling $561,676.
The transfers, according to the lawsuit, were done to hinder, delay or defraud creditors.
“D’Alessio did not receive fair consideration or reasonable equivalent value in exchange for the … transfers,” the complaint states. He “was insolvent, or had incurred or was intending to incur debts beyond his ability to pay them as they became due.”
One day after the banks forced him into Chapter 7 liquidation, D’Alessio allegedly wired $100,000 to the Seminoles and $300,000 to Capeci. Two days later, he wired $30,000 to Schettino and three days after that, $205,000 to the Seminoles.
None of the transactions was approved by bankruptcy court.
The Capeci and Schettino complaints cite text messages from a cellphone that was seized when D’Alessio was arrested: “I need some of my money tomorrow for Italy” and “I need my 100k I gave you to hold.”
The recipient of the messages was not identified in U.S. Department of Justice disclosures, and O’Toole’s complaints do not explicitly link the messages to Capeci or Schettino.
O’Toole is demanding that the defendants return the money that D’Alessio sent them.
The Indian defendants include Seminole Hard Rock & Casino in Fort Lauderdale and Seminole Hard Rock Entertainment Inc. in Hollywood, California.
O’Toole is represented by Long Island attorneys David A. Blansky, Holly R. Holecek, and Salvatore LaMonica.