December 30, 2009 / 8:20 PM / 10 years ago

Guilty plea on tax charge in $1.8 billion NYC property sale

NEW YORK (Reuters) - A project director who helped broker the 2005 sale of Riverside South Properties, one of New York City’s largest real estate transactions, has pleaded guilty to a tax evasion charge but is not expected to face prison time.

Barry Gross, 46, on Wednesday admitted to failing to file unincorporated business taxes, a Class A misdemeanor, the office of Manhattan District Attorney Robert Morgenthau said.

The Lawrence, New York resident will be sentenced on February 16, 2010 to a conditional discharge if he pays an estimated $119,000 to $135,000 of state and city taxes, interest and penalties on his $1 million bonus for the transaction.

Prosecutors said Gross had disguised the bonus as a fee made payable to a shell company he controlled, Itamar Capital.

A condition of the plea is that a Hong Kong finder involved in the transaction pay $5 million in state and city taxes on a $17.5 million finder’s fee.

Benjamin Brafman, a lawyer representing Gross, did not immediately return a call seeking comment.

Morgenthau had said Gross helped broker the $1.76 billion sale of Riverfront South to Extell Development Corp and private equity firm Carlyle Group by Hudson Waterfront Associates of Hong Kong and the real estate tycoon Donald Trump.

The site on a former railyard next to the Hudson River at the time was Manhattan’s largest parcel of undeveloped land.

Trump had sued his partners in 2005, saying they sold the site for much less than it was worth.

Morgenthau’s office said its investigation into other aspects of the Riverside South sale has been concluded.

Gross had been charged in September with grand larceny, falsifying business records and filing a false personal tax return. He had faced up to seven years imprisonment.

The case is New York v. Gross, New York State Supreme Court, No. 04581-2009.

Reporting by Jonathan Stempel; Editing Bernard Orr

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