Alex Getelman is accused of stealing money from $11 billion hedge fund
Alex Getelman was still in his 20s when he turned his nascent company into what he called “New York City’s fastest-growing general contracting and construction management firm.” He had a list of blue-chip clients, a plush office on 57th Street and a luxurious home on Long Island’s North Shore.
But in order to help pay for his castlelike stone house on 3.3 acres in Old Brookville, prosecutors charged, Mr. Getelman systematically inflated the cost of work for one of the largest hedge funds in the world, Citadel Investment Group. Between 2008 and 2011, Mr. Getelman stole $1.2 million from Citadel as his company, Aragon, built offices for the hedge fund in the skyscraper at 601 Lexington Avenue, the former Citicorp Center, according to the complaint filed on Tuesday by the Manhattan district attorney, Cyrus R. Vance Jr. The contractor also failed to declare the extra income and pay $286,000 in taxes, the complaint said.
On Tuesday, Mr. Getelman, now 39, pleaded not guilty to one count of grand larceny and one count of filing a false tax return in Criminal Court in Lower Manhattan.
Citadel, which declined to comment, has been the comeback kid of the hedge-fund world. After the company stumbled badly in 2008, its founder, Kenneth C. Griffin, earned a 20 percent return for his investors last year and a $700 million paycheck.
The charges against Mr. Getelman are the latest case in a long-running investigation into the interior construction industry by the district attorney’s rackets bureau and the special investigations unit of the State Police.
Over the past two years, investigators have seized company records, interviewed nearly 100 subcontractors — including P. J. Mechanical Corporation — and subpoenaed property owners like Goldman Sachs, Bank of America and L&L Holding Company. But progress has been slow.
After Lehr Construction Corporation and four of its executives were indicted in May 2011 on charges of padding their bills by tens of millions of dollars, Mr. Getelman told The New York Observer that he was unsure whether corruption was an industrywide problem. But he was emphatic that Aragon was above board. “I know that we don’t run our operation that way — nor have we ever.”
He said at the time that his company had a “very nice niche” within the hedge-fund and investment industry. Despite the recession, Mr. Getelman claimed he was still doing 120 to 150 projects a year. “We’ve worked with all the large shops, but the hedge-fund shops, which are already very lucrative, are continuing to grow,” he said.
Mr. Getelman bought the land for his house in Old Brookville in 2008, according to public records, and began building the 7,900-square-foot house, which includes six bathrooms, four fireplaces, a large swimming pool, a basketball court and landscaped grounds.
As he completed work on the $4.3 million home in 2011, Mr. Getelman celebrated Aragon’s 10th anniversary, inviting 300 people to a party at the chic 42nd Street hot spot Espace.
A number of rival firms in the industry have also run into trouble. Lehr and its top executives are scheduled to go on trial Oct. 9. Lehr executives were also at the center of a wide-ranging prosecution of corruption in the construction industry 14 years ago. The troubled company filed for bankruptcy protection last year.
Julian Alessi and his company, MDA Contracting, pleaded guilty in February to a scheme to defraud. The company is dissolving, and Mr. Alessi will be sentenced in June.
Michael Hayes and his company, Sweeney & Harkin Carpentry and Dry Wall Corporation, pleaded guilty to various related charges last September. George and Kevin Fotiadis and their company, Liberty Contracting, pleaded guilty in December to misdemeanor charges, made restitution and paid a $50,000 fine. And George Figliolia and John Krupa of the Builders Group are in prison on charges related to stealing millions of dollars from clients at several condominium and office projects.
Read More: NY Times