最新杏吧原创

ST. LOUIS 鈥� The brothers behind one of the city鈥檚 most prolific apartment developers were indicted Friday on fraud charges related to the city鈥檚 minority hiring program.

Vic Alston and Sid Chakraverty 鈥� along with their accountant, Shijing 鈥淧oppy鈥� Cao 鈥� are accused in a federal indictment unsealed Friday of falsifying records related to the city鈥檚 minority contracting requirements for developers who receive tax incentives.

The 24-page indictment charges Chakraverty, Alston and Cao with one count of conspiracy to commit wire fraud and 11 counts of wire fraud.

The brothers own developer Lux Living and construction company Big Sur Construction, as well as landlords Asprient Properties and STL CityWide.

The charges are a potentially devastating blow to a developer that, just a few years ago, was among the most prolific apartment builders in 最新杏吧原创, and one of its largest residential landlords.

Over the past few years, Lux has invested more than $150 million in nearly 1,000 units in DeBaliviere Place, Lafayette Square and Soulard, welcome projects for a city that has tried for decades to revitalize its urban core.

The brothers in recent years also built a new apartment building at Delmar and Interstate 170 in University City and owned hundreds of other units in buildings from South Grand Boulevard to downtown.

But some tenants have complained of poor management, neglected maintenance and shoddy construction. Some also said the company often used online marketing techniques to tamp down bad reviews rather than address complaints.

Residents of the Ely Walker Lofts on Washington Avenue blamed the brothers for driving the once posh condo building into the ground after they bought enough units to take control of the board and refused to spend enough money on maintenance and security. The building was the site of a high-profile March 2022 shooting, as well as raucous parties tied to short-term rentals blamed for contributing to downtown鈥檚 pandemic-era mayhem.

鈥淚 think this just validates how everyone in their buildings feel,鈥� Grace Malnar, a longtime condo owner in the Ely Walker building, said of the indictment. 鈥淭hat they don鈥檛 operate aboveboard, and they feel above the law.鈥�

The indictment details a series of sham transactions in which the brothers allegedly submitted documents to the city鈥檚 development arm, the 最新杏吧原创 Development Corp., claiming that minority and women-owned businesses performed millions of dollars in work that they did not actually do in order to meet the city鈥檚 minority and women hiring goals.

The scheme involved issuing 鈥渏oint checks鈥� for the same total. One check or set of checks would be issued to the actual contractors who performed the work. And a sham check would made out to the minority- or woman-owned firm in order to falsify minority participation records. In some cases, the brothers鈥� company would use sham 鈥渏oint purchase orders鈥� instead of checks.

The indictment centers on two of their apartment projects: Chelsea in DeBaliviere Place and SoHo in Soulard.

At Chelsea on Pershing Avenue, Chakraverty, Alston and Cao are accused of falsely crediting a woman-owned firm, whose owner is only identified as 鈥淐.C.鈥� in court documents, for labor and materials that other firms supplied.

They submitted documents that led SLDC to believe that C.C.鈥檚 company was paid nearly $300,000 for materials and labor, including insulation, doors and retaining walls. But C.C.鈥檚 company actually only performed cleaning services for the Chelsea project, and was paid just $21,504. C.C. was unaware of the false reports, according to the indictment.

Because of that, Big Sur allegedly received at least $551,022.99 in sales tax exemption for materials and a property tax abatement valued at $1.8 million.

At SoHo on South Seventh Street, Chakraverty reached an agreement with a Black-owned firm only identified as 鈥淪LE鈥� in court documents that was already performing work for the Chelsea project in order to receive a tax abatement valued at $7 million over 10 years, court documents show.

Chakraverty is accused of offering a 鈥�5% markup fee鈥� in order to falsely attribute labor and materials supplied by non-minority businesses in SLE鈥檚 name. SLE would then notify SLDC that it had gotten paid after SLE received proof that the other companies had gotten paid.

In one instance, Big Sur purchased $1 million in appliances from Home Depot but allegedly reported to SLDC that it had actually paid SLE for the material.

Chakraverty, Alston and Cao also allegedly falsified records with a Native American-owned firm identified as 鈥淥C鈥� in court documents. OC was to receive a 6% fee to allow them to credit OC鈥檚 company for work done by other companies. OC signed a sham purchase order for more than $72,000 for landscape pavers that was actually done by a non-minority firm. OC received $4,354.91 as the fee, according to the indictment.

Between September 2021 and May 2023, Chakraverty, Alston and Cao allegedly submitted 13 reports that contained false information to SLDC.

Court documents also allege that the information Big Sur submitted to its lender on SoHo, Midwest BankCentre, and the disbursing agent of the funds, Old Republic Title Co. of 最新杏吧原创, 鈥渄iffered substantially from Big Sur鈥檚 false reporting to SLDC.鈥�

In one example, Big Sur reportedly told SLDC that C.C.鈥檚 company supplied $511,634 worth of work. But Big Sur and the brothers asked the bank to transfer that amount to two Chinese companies that had actually supplied the work.

But their alleged scheme began to unravel by fall 2022.

Big Sur wanted again to use C.C.鈥檚 company for the SoHo project, but C.C. reportedly refused to verify false records.

Chakraverty and Alston began to worry that SLDC would not approve their tax abatement. Alston allegedly emailed Chakraverty and an unidentified Big Sur employee: 鈥淕uys fix this stuff. We have ($5 million) on the line tomorrow ... bring (C.C.) in and fix it today.鈥�

In December, Big Sur employees met with C.C. at Soulard Social House to try to persuade C.C. to go along with the alleged scheme. C.C. again refused.

Alston then allegedly emailed Chakraverty and a Big Sur employee: 鈥渟o whats the deal with (C.C.). Can we just log in and do it for her she would never know.鈥�

But Chakraverty was aware that C.C. had already spoken with SLDC about her concerns with the falsified records, replying to Alston: 鈥渟he is already telling (SLDC) that we do this so i wouldn鈥檛 suggest it,鈥� according to court documents.

Instead, he told employees to find another woman-owned contractor to verify the false $1.6 million contract.

鈥�(C.C.) has done 40,000 labor,鈥� Chakraverty wrote. 鈥淣eed to replace 1.6M with a new WBE vendor.鈥�

Their efforts to report false invoices to SLDC continued into mid-2023. In May 2023, when an employee asked about the discrepancy in payments to C.C.鈥檚 company, Cao told the employee they just add the larger amounts to a verification for a smaller amount the company had submitted.

鈥淲e can, we can make it look like we paid her, but we didn鈥檛 actually pay her,鈥� Cao told the employee, according to the indictment. 鈥淲e have final waiver. What we normally do is we just put in the paid information on the final waiver which she already signed it.鈥�

Due to the scheme, Big Sur reportedly received in excess of $1 million in sales tax exemptions from the city of 最新杏吧原创 but did not receive the property tax abatement as a result of SLDC鈥檚 concerns, court documents show.

The indictment states that SLDC was not yet aware of the alleged scheme involving SLE and OC.

In a final report to SLDC in May of 2023, Big Sur is accused of falsely reporting $1.2 million to C.C.鈥檚 company; $2.3 million and a 5% 鈥渕arkup fee鈥� to SLE; and $73,000 to OC鈥檚 company.

Assistant U.S. Attorney Hal Goldsmith is prosecuting the case. He declined to comment.

An attorney for Chakraverty, Renato Mariotti, said his client 鈥渕aintains his innocence and looks forward to his day in court.鈥�

It was unclear who was representing Alston and Cao. Neither responded to requests for comment.

It became clear the brothers were under investigation a year ago, when the Post-Dispatch reported the existence of a federal subpoena sent to SLDC regarding the Chelsea.

In the ensuing months, Alston and Chakraverty鈥檚 legal team employed aggressive tactics against former employees it believed were sharing information with 鈥渦ndisclosed third parties.鈥� It sued one former employee, and Mariotti threatened a lawsuit against another.

The brothers鈥� lawyers also threatened to sue the city over its Sunshine Law requests as the attorneys sought discover what SLDC had shared with the feds.

It鈥檚 not the first time federal prosecutors have gone after developers who skirt the city鈥檚 minority hiring requirements.

Brian Kowert, the former chief operating officer and project manager at HBD Construction Inc., was sentenced to 18 months in prison last year for falsifying documents related to the minority hiring program.

SLDC Director Neal Richardson said Friday that his office would not award tax incentives to developers who do not meet its minority- and women-owned contracting requirements.

鈥淚 think this is a great example of why we have to be diligent, why we have to be direct, and be very aggressive around how we鈥檙e collecting this information, collecting this data, because this type of thing happens,鈥� Richardson said. 鈥淲e鈥檙e just trying to do our job and protect the interests of the city.鈥�

Austin Huguelet of the Post-Dispatch contributed to this report.