Manhattan, NY – A city development official demanded kickbacks, throttled a business partner and misappropriated millions from a private condo project that his company built in Greenwich Village, a startling suit and court papers charge.
Subscribe to our Daily Roundup Email
Alan Friedberg – a well-connected member of the city Economic Development Corp. who once sat on the MTA board – strong-armed friends and foes alike while getting the luxury building off the ground, the suit claims.
(As was reported here on VIN News) The Daily News recently spotted Friedberg improperly using a police-issued permit to park his $76,000 Jaguar in a Manhattan restricted zone.
He returned the permit – but the lawsuit may not be so easily resolved.
In a court affidavit Friedberg rejected or denied “the scandalous assertions.”
“In over 40 years of experience as a developer, I have never been sued by anyone before this lawsuit,” he said. “I did not engage in any ‘shakedowns,’ ‘kickbacks’ or diversions of funds.”
The bitter court battle erupted four years after Friedberg and two partners came together in 2003, forming Paxton 350 Corp. to build the condos at 88 Washington Place.
The $14 million, two-year project ballooned into a four-year problem, with costs climbing more than 40%, the suit claims.
The property’s owner, Ciao-Di Restaurant Corp., claims in an August 2007 suit and supporting affidavits that Friedberg and Paxton shifted cash from the project’s account without their permission.
Ciao-Di’s suit claims that, after Paxton was booted from the project in 2007, Friedberg and his company transferred nearly $2 million from a project account into a separate Paxton account.
“Paxton and Friedberg have simply stolen $1.925 million of Ciao-Di’s money and have refused to return it,” the suit charges.
Two affidavits attached to the case accuse Friedberg of demanding kickbacks and threatening his business partner. Their charges include:
– A former vice president at contractor Ameribuild Construction Management claims Friedberg demanded $50,000 to award the project to the builder.
Wayne Schumer, who has since left the company, said he refused to “participate in this illegal scheme.” Ameribuild became a contractor on the site, and its president denied any suggestion that kickbacks were involved.
– One of the two other partners in Paxton, Al Noe, said in an affidavit he was frozen out of decision making. When he tried to pull out of the project, Noe said Friedberg threatened him.
“Friedberg reacted by grabbing my throat in a choke hold and literally threw me off the property,” Noe claimed.
Noe also alleged Friedberg and the third partner in the project “apparently” sidestepped Ciao-Di by selling at least $100,000 worth of ad space on the development site and depositing the cash in a Paxton account.
Friedberg, 75, said in his affidavit he’s in no condition to start fights because he’s too old and has a heart condition.
Manhattan Supreme Court Justice Richard Lowe has barred Friedberg from spending or transferring any money connected to the condominium project, legal papers show.
Lowe also predicted Friedberg and Paxton are likely to lose the ongoing case, which seeks to keep him from collecting a hefty developer’s fee, court papers from the ongoing suit say.
How can a judge “predict” that a defendant is going to lose a case? Doesn’t he have the right to present his case and countersue?