Highland luxury homes developer sentenced to federal prison for fraud
The developer of Vineyard Commons, a luxury residential complex in Highland, was sentenced in federal court on Wednesday to three years and one month in prison.
Michael Barnett, 47, of Marlboro, pleaded guilty last January to conspiring to defraud lend- ers and make false statements to the U.S. Department of Housing and Urban Development.
The judge also ordered Barnett to forfeit $200,000 in ill-gotten gains and any interest in certain specified real property, and to pay $1,334,620 in restitution.
Barnett had faced up to five years in prison, and a fine of up to $250,000.
Vineyard Commons, billed on its Web site as a “luxury, maintenancefree rental community for active adults (55+),” has 185 units and was purchased in September 2013 by TNWB Vineyard Commons LLC.
“Michael Barnett abused his position as the developer of Vineyard Commons to enrich himself and defraud HUD and his construction lender,” said US Attorney Preet Bharara.
Barnett, previously of Hopewell Junction, had admitted to engaging in a scheme to defraud his construction lender and the federal agency 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.
Bharara said Robert Lees and Kevin DiCello were willing to go along with Barnett’s demand for the $865,000 to be kicked back to Barnett so they could get more business from Barnett in the future.
Lees, who was convicted in May, will be sentenced in December.
DiCello, who pled guilty in April, will be sentenced next January.