Five months after top collector Michael Shvo was indicted by the New York District Attorney’s Office for felony tax fraud, fallout from the case is hitting one of his real estate deals hard, according to a report in The Real Deal.
Shvo has been “sidelined from his flagship project, an 88-story condominium tower at 125 Greenwich Street,” according to the report. Shvo “was once featured prominently on the project’s marketing materials, but now there’s no trace of his name on the project website,” the report states.
The indictment “had been a source of concern for lenders on the Rafael Vinoly-designed project,” according to the story.
Shvo, who was released on $500,000 bail, is due back in court on March 29.
Though Shvo no longer has any control over the direction of the nearly $900 million project at Greenwich Street, he will retain his equity stake, which sources told the Real Deal, is less than 10 percent.
A source familiar with the deal states: “At the end of the day he’ll get a check and that’s it.”
Manhattan DA Cyrus Vance announced the indictment this past September, citing a scheme in which Shvo evaded payment of “more than $1 million in state and local sales and used tax associated with the purchase of fine art, furniture, jewelry and a luxury sports vehicle… This indictment puts other purchasers of fine art on notice.”
“Those dealing in the high-priced art world and other luxury goods have an obligation to obey the same tax laws that govern all other New Yorkers,” added Jerry Boone, New York State commissioner of taxation and finance, who was also quoted in the statement.
The DA alleges that Shvo’s actions spanned a six-year period between 2010 and 2016, noting, “[I]n communications with auction houses and art galleries, the defendant falsely represented that purchases he made would be shipped to an out-of-state address in the Cayman Islands or other overseas destinations, and therefore, no sales tax was collected. In fact, Shvo’s purchases were shipped to his office or homes in New York, including an apartment on Columbus Circle and a house in New York’s Hamptons.”
The Getty Station in 2013 with Lalanne sheep conceived of by Michael Shvo. Courtesy of GettyStation.com,
Shvo is still involved in development of condos at properties including 565 Broome Street and the Getty, at 239 Tenth Avenue, so named for the former gas station there. When Shvo first acquired the property in 2013, he temporarily turned it into an Instagram-friendly “grass station,” complete with faux-rolling green hills and a “flock” of Francois-Xavier and Claude Lalanne sheep.