A Manhattan real estate developer has pleaded guilty to a criminal charge in an alleged $27 million mortgage fraud scheme.
Michael Hershkowitz, 52, pleaded guilty to conspiracy to commit mail and wire fraud at a hearing Monday before U.S. District Judge P. Kevin Castel.
A lawyer for Hershkowitz did not immediately return a phone call seeking comment.
The charge carries up to 20 years in prison and prosecutors are seeking nearly $27.2 million in forfeiture. Sentencing is set for Sept. 9.
Hershkowitz, of New York, entered his plea under a cooperation agreement with the prosecutors.
Prosecutors had alleged Hershkowitz and others induced about 70 individuals to lend more than $27 million to Kingsland Group Inc., purportedly to fund the renovation of about 16 apartment buildings in Manhattan. The investors filed an involuntary bankruptcy petition against Kingsland Group in 2007.
Hershkowitz and Ivy Woolf-Turk (who pleaded guilty to conspiracy in February and is awaiting sentencing) falsely represented that the lenders would hold first mortgages on the properties, the government said. Interest was paid on the loans for some years, but ultimately the principal on the loans was not repaid when due, prosecutors said.