In the years before his murder, a troubled landlord withdrew nearly $3.6 million from his business to pay personal debts, the Daily News has learned.
The troubling financial records shine a light on the massive money woes of slain Brooklyn landlord Menachem Stark.
The 39-year-old married father of seven was deeply in debt at the time of his January disappearance — and appears to have been using cash from his business, South Side Associates, to dig himself out of the hole.
The money had been lent to South Side by a bank to keep a 74-unit Williamsburg property that Stark co-owned running during a bankruptcy proceeding. The funds were not supposed to be used for any other purposes.
But in federal bankruptcy filings, South Side trustee Jonathan Flaxer said Stark “obtained cashier’s checks made out to a multitude of individuals, entities and law firms to pay for personal debts or for use in other real estate transactions.”
The checks were marked “customer withdrawal.” Records show that in the month before Stark was murdered, five “customer withdrawals” were taken out from the account, totaling $267,101.07.
The month before that, over $1 million was taken out of the account.
In all, court filings say, over $3.6 million was improperly withdrawn between June of 2011 and December of 2013. The missing money went unnoticed until after Stark’s death because the building’s bank statements were apparently “tampered with to conceal the diversion,” court filings say.
Flaxer’s filing say he’s gotten some of the cash back. “Over $375,000 has already been returned,” and “several parties have agreed to return approximately $240,000 of the missing funds,” the filing says.
He’s asked a judge to issue a subpoena so he can review Stark’s emails and try to locate some of the cash. A hearing on the matter is scheduled for Thursday.
Stark owned the building with business partner Israel Perlmutter, but the pair defaulted on the S. Fourth St. building’s $29 million mortgage in 2009. The debt on the building is now over $40 million.
Perlmutter has refused to answer Flaxer’s questions under oath, citing his Fifth Amendment right against self-incrimination.
Stark was abducted outside of his Williamsburg office on Jan. 2, and his body was found on Long Island the next day.
No arrests have been made in the case, but police have been eyeing a contractor whom Stark owed $20,000 as a suspect.
With Rocco Parascandola
