NEW YORK – An Ulster County real estate developer pled guilty in federal court on Tuesday to conspiring to defraud lenders and make false statements to the US Department of Housing and Urban Development. The charges stemmed from Michael Barnett’s development of Vineyard Commons, a luxury residential complex in Highland.
Barnett admitted to engaging in a scheme to defraud his construction lender and HUD in order to receive hundreds of thousands of dollars in kickbacks.
According to court admissions and allegations, Barnett sought kickbacks and investments from subcontractors and vendors on the project and made false statements to the project’s lender so he could draw down on the project’s line of credit.
Barnett also arranged with two officials of a vendor who provided rough carpentry and lumber supplies for the project to have the company pay Barnett a kickback in exchange for Barnett’s award of the contract on the Vineyard Commons project and other planned future ones. The bids were inflated by some $865,000.
US Attorney Preet Bharara said Barnett faces up to five years in prison, a fine of $250,000, an order of over $1.3 million in restitution, and an order to forfeit $200,000.
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