All Powerful Moderator
A recent mafia-related construction scheme and a murky web of subcontractors has menaced major NYC developers and their glitzy condo projects
During a court hearing this winter, alleged loan shark Mark “Chippy” Kocaj urged a federal judge to allow him to work for a Bronx-based construction company.
Kocaj was out on bail, awaiting trial for his alleged role in a mafia-connected construction bribery scheme. In the meantime, he wanted to return to the industry where he’d spent most of his career — but prosecutors weren’t keen on the idea.
“We do have concerns about that company and its connections with organized crime and other misconduct they may have committed,” Assistant District Attorney Keith Daniel Edelman said of the contractor offering the job, according to a transcript of the hearing. “He may be exposed to further violations. He may be exposed to other associates.”
Ultimately, the judge rejected his request.
Kocaj is the cousin of John “Smiley” Simonlacaj — a former managing director at Ziel Feldman’s development firm HFZ Capital Group — and their relationship helped enable a wide-ranging scheme that ensnared at least two New York developers and three construction management firms, prosecutors allege. Kocaj’s attorney, Christopher Booth, and Simonlacaj’s attorney, Glen Colton, both declined to comment.
One of the projects at the heart of the case is HFZ’s $2 billion condo tower at 76 11th Avenue, known as the XI.
Simonlacaj, who has since been fired from HFZ, is accused of letting the Gambino crime family skim hundreds of thousands of dollars from the condo development and other projects in New York through CWC Contracting — a carpentry subcontractor that allegedly doled out bribes to employees of multiple companies in exchange for work and larger payouts.
“HFZ has not been the target of the government’s investigation, and there has never been any suggestion that HFZ did anything inappropriate,” a spokesperson for the developer said in a statement. “Rather, it appears that HFZ, like the other developers described in the indictment, may have been a victim of the alleged acts.”
In addition to HFZ’s Simonlacaj, an employee at RXR Realty was also allegedly offered kickbacks by CWC, court documents show.
The subcontractor is accused of inflating bills for work that, in some cases, the company didn’t even perform. Instead, the money was allegedly used, in part, to pay for work performed at construction executives’ personal homes. The alleged scheme played out in just one year, from June 2018 to July 2019. But according to prosecutors, in that time period, the little-known subcontractor was able to quietly manipulate some of the biggest names in Manhattan real estate and exploit multibillion-dollar projects.
In addition to HFZ and RXR, CWC’s developer and general contractor clients over the past decade include Gary Barnett’s Extell Development and Tishman Construction, according to an archived version of the CWC’s website and permits filed with the city Department of Buildings. It worked for these firms despite the fact that CWC owner Andrew Campos had previously been accused of mob-related activities. None of the larger development firms or general contractors have been accused of wrongdoing.
The indictment, filed last December against Kocaj, Simonlacaj and nine others, is a case study on how organized crime can still infiltrate New York development projects even at a time when mob activity is much lower than it was in the 1980s and 1990s.
Dozens of subcontractors can work on any given job at one time, creating myriad opportunities to inflate bills and strong-arm workers who may already be indebted to the mafia, several former prosecutors told The Real Deal. And unless a developer is closely monitoring who is working on their site, such behavior can go undetected.
Still, the influence of organized crime in construction isn’t as “systematic or unbridled” as it was decades ago, said Bruce Maffeo, an attorney with Cozen O’Connor and a former prosecutor with the U.S. Attorney’s Office for the Eastern District of New York who served on an organized crime task force in the 1980s.
“You couldn’t pour a yard of concrete in Manhattan without kicking money to the Genovese or Gambino crime family,” he said. “My sense is that it’s not as dramatic as it was 30-plus years ago.”
Federal prosecutors declared last December, however, that the Gambino family is “thriving.” And while the mafia may no longer have as strong a hold on individual trades, real estate in New York will always pose enticing, albeit illicit, opportunities, according to Maffeo.