Two of the three men convicted in a $3 million loan fraud and money laundering scheme are Five Towns residents, who used their companies to steal money between October 2013 and April 2015, according to New York State Attorney General Letitia James.
Kenneth Martinez, 51, of Lawrence; Shai Sellam (a/k/a Sean Green), 45, from Woodmere; and Hayim Jacob Barkol (f/k/a Kadir Barkol), 39, of Brooklyn; and their respective companies, Metropolitan Enterprises Inc., New Route Resulting Inc. and Lifting Up Management LLC, were convicted in Suffolk County Court for also stealing more than $455,000 in taxes.
All the men and their companies were ordered to pay $1.5 million in restitution and judgments to financial institutions and the state. Martinez was sentenced to three to nine years in state prison on an Albany tax case and is expected to receive a concurrent term of three to nine years in state prison for the loan fraud on Oct. 17.
Sellam could be sentenced to two to six years in state prison on Aug. 20, 2020. Barkol is expected to be sentenced to five years of probation for his role in the scheme on Oct. 17.
“These fraudsters must now pay back stolen funds and cease their illegal operations,” James stated in a news release. “Let this be a lesson to every individual and company that we will never stop fighting against those who aim to defraud New Yorkers.”
Dubbed “Operation Skyfall” the investigation uncovered that the men committed their loan fraud scheme by submitting phony invoices and a phantom deposit check claiming to sell scaffolding and hoisting equipment from one of Barkol’s companies to Metropolitan. In reality, the supposed equipment either simply did not exist or was already owned by Metropolitan or another financial institution had a financial claim on the equipment.
To support and hide the loan fraud scheme, the men laundered the stolen money through several corporate accounts. Barkol would write checks from his corporate account back to Metropolitan within a matter of days of receiving the fraudulently obtained money, totaling nearly the full amount of the money received from the financial institution. The money was then moved between Metropolitan’s accounts and used to pay debts owed to other financial institutions, to cover negative balances, and to pay current and outstanding payroll and union dues.
Metropolitan was considered one of the largest scaffolding and hoisting contractors in the state between October 2013 and September 2015, according to the Attorney General’s office. Public records show that in 2015, Metropolitan was a subcontractor for various work done on the George Washington Bridge and on the Oculus Project at the World Trade Center Transportation Hub. The men used unpaid tax money and the proceeds of fraudulently paid loans to keep the business going, during this time period. By the time of the Attorney General’s first indictment in 2016, Metropolitan Enterprises Inc. was no longer in business.
“The Port Authority Inspector General commenced this investigation based upon allegations that Metropolitan Enterprises, Inc., a scaffolding and hoisting company and its President, Kenneth Martinez may not be a valid Minority Business Enterprise company conducting work at the World Trade Center site,” Port Authority Inspector General Michael Nestor stated in the release.
In July, the men and their companies were arraigned in the First District Court of Suffolk County on a felony complaint charging money laundering second-degree, scheme to defraud first-degree, grand larceny second-degree and first degree. On Aug. 7 the men pleaded guilty.
“This sentencing demonstrates the importance of law enforcement partnerships in rooting Commissioner Margaret Garnett stated in the release.