A former executive at a prominent New York City development firm that collapsed amid an avalanche of lawsuits and investor bankruptcies was arrested this week and is expected to be charged in connection with a multimillion-dollar fraud scheme, according to several people with knowledge on the House. .

The developer, Nir Meir, was taken into custody Monday at the 1 Hotel South Beach in Miami and was expected to be extradited to New York City on charges filed by the Manhattan district attorney's office, the officials said. people.

Several other people and companies were expected to be charged in a series of indictments filed by the district attorney, Alvin L. Bragg, as part of a sprawling web of suspected criminal conduct involving Mr. Meir's former company, HFZ Capital Group, was involved.

Those expected to be charged include people involved with construction company Omnibuild, which has worked on at least one major HFZ project, including a client at the company, according to several people with knowledge of the matter.

A number of suspects in the case are expected to be arraigned on Wednesday.

A spokeswoman for the Public Prosecution Service declined to comment. A representative of Mr Meir, whose arrest took place first reported by Curbedcould not be reached for comment.

Charles E. Clayman, an attorney for HFZ, said the company would not comment until it saw the charges.

An Omnibuild spokesperson said in a statement that the company and the executives expected to be charged were innocent and portrayed them as victims of HFZ.

“The evidence will show that HFZ stole from Omnibuild, as well as from many others,” spokesman Josh Vlasto said.

HFZ attempted to become a major player in the New York City real estate market, building and acquiring thousands of luxury apartments in Manhattan.

At the company, Mr. Meir helped raise millions of dollars from investors, often wealthy foreigners. In 2019, the company managed more than $10 billion in properties, the company said.

The company began to crumble after it began developing its most ambitious project: the XI in Manhattan's Chelsea neighborhood, a pair of winding glass towers with luxury apartments and a luxury hotel. HFZ spent $870 million on the development site and construction began in 2016 under the direction of Omnibuild.

But before the opening, investors and contractors accused HFZ of missing payment deadlines and said it owed them millions of dollars. Omnibuild pulled out of the project in 2020, claiming HFZ owed the construction company more than $100 million.

A prominent investor in HFZ, Israel's Yoav Harlap, sued Mr. Meir in 2021, accusing him of refusing to repay a nearly $20 million loan and depositing money in personal accounts to avoid repayment.

Mr. Meir, 49, filed for bankruptcy last week in Florida, where he moved after leaving HFZ at the end of 2020.

The XI project declared bankruptcy in 2021, before completion, and was purchased by two other developers, who renamed it One High Line. It opened late last year. HFZ also lost four other Manhattan apartment buildings in 2021.

HFZ was founded in 2005 by Ziel Feldman, who was not expected to be charged in the scheme, according to people with knowledge of the matter. His wife, Helene Feldman, said on Tuesday that the couple had no comment on Mr Meir's arrest.

In lawsuits against the firm, Mr. Feldman alleged that he turned over day-to-day management of HFZ to Mr. Meir and blamed him for misspending his money and causing its demise.

Earlier this year, a sprawling residential neighborhood northeast of Houston that catered mainly to Spanish-speaking buyers, including undocumented immigrants, came under fire by Texas Republicans, who said the promise of homes there attracted migrants crossing illegally from Mexico crossed.

But in an unexpected twist, on Wednesday the Biden administration filed charges against the developer, Colony Ridge, for what the Justice Department and the Consumer Financial Protection Bureau said were predatory lending and unfair sales practices that took advantage of predominantly Hispanic buyers.

“Colony Ridge promised the American dream, but we argue it has actually delivered a nightmare for thousands of hardworking Hispanic families,” said Kristen Clarke, assistant attorney general of the Justice Department’s Civil Rights Division. in a statement announcing the lawsuit.

Federal prosecutors said Colony Ridge’s growth was fueled by a strategy of illegally squeezing Hispanic buyers with little or no credit. The Justice Department also accused the developers of offering financing without verifying buyers’ ability to pay, charging interest rates “routinely higher than customary rates” and quickly reselling the properties in the event of foreclosure.

John Harris, one of Colony Ridge’s owners, denied the allegations in the federal lawsuit, which he said he only learned about after they were made public Wednesday.

“We are convinced that there is no foundation at all,” he said in a telephone interview. “We are proud of what we do for our customers. We have a good relationship with our customers. I think it is unfounded.”

Colony Ridge spent much of the fall defending itself to Republican lawmakers in Texas. Gov. Greg Abbott made the development the topic of two consecutive special legislative sessions after stories and segments in right-wing news outlets such as The Daily Wire and Fox News linked the development to the increase in the number of migrants arriving at the border.

“We are taking this very seriously,” Mr Abbott said in an interview on Fox News in September, the same month that ultraconservative Lt. Gov. Dan Patrick toured Colony Ridge on site and by flying over in a state police helicopter.

During hearings at the Texas Capitol in October, lawmakers heard testimony about flooding and other development issues. But lawmakers took no action other than allocating millions in additional funding for law enforcement in the area. On Monday, Mr. Abbott signed the funding into law.

Mr Harris said he felt his cases were misunderstood and misrepresented by both sides of the political spectrum.

“I’m either the guy who runs the underground railroad to transport illegal immigrants, or I’m the guy who mistreats poor people,” he said. “It seems that no matter which side you’re on, you can attack me if you want.”

The development has grown rapidly since it first began selling properties on lots cut into dense forest more than a decade ago, about 30 miles from downtown Houston. It is now home to over 40,000 residents spread across several separate subdivisions.

Mr. Harris and his co-owners have said they plan to build more, and they expect the project will eventually more than double its current size.

The influx of new residents to rural Liberty County, where the development is located, has already strained local resources, especially schools, and fueled tensions with the nearby town of Plum Grove, whose residents objected to the increased blamed traffic and Colony Ridge for the damage to the city. local roads, flooding and crime.

In the lawsuit filed Wednesday, plaintiffs accused Colony Ridge of deceptive practices and discrimination in violation of federal housing and consumer finance laws.

They said the developer had seized at least 30 percent of the properties within three years of selling them. According to the complaint, from 2021 to 2022, the number of foreclosures in Liberty County exceeded those in Dallas and San Antonio.

Colony Ridge also used Spanish marketing materials that misrepresented the properties in Terrenos Houston subdivisions, prosecutors said, promising water, sewer and electric hookups that were not available at the time of purchase. The company disclosed this fact in paperwork provided only in English, they said.

According to prosecutors, Colony Ridge recorded more than 28,000 transactions in Terrenos Houston subdivisions over a five-year period, and more than 90 percent involved at least one Spanish-speaking consumer.

The lawsuit also named companies associated with Colony Ridge, as well as Loan Originator Services LLC, a mortgage company that, prosecutors said, originated all of the seller-financed loans for Colony Ridge.

Mr. Harris acknowledged in the telephone interview that not all properties had water and sewer lines when they were sold. “But we have a timeline, and people know it,” he said, adding that the electrical connections were managed by the power company.

“Look, I do it to make money, but the people are very important to me,” he said. “The truth will eventually come to light.”

Illumina, the leading manufacturer of gene sequencing machines, announced on Sunday that it would sell Grail, a cancer test developer it bought for $7.1 billion in 2021.

The move came two days after Illumina lost its case at a federal appeals court, which a Federal Trade Commission largely upheld pronunciation that Illumina should terminate its deal with Grail on antitrust grounds.

The case was seen by antitrust experts as a test of regulators’ efforts to stop big companies from buying young innovators.

The deal also hit a roadblock in Europe. In September 2022, the European Union said it would block the takeover. San Diego-based Illumina previously publicly stated that if it were not successful with appeals in either jurisdiction, it would divest the startup.

“We are committed to an early divestiture of Grail in a manner that allows its technology to continue to benefit patients,” Illumina CEO Jacob Thaysen said in a statement. “The management team and I continue to focus on our core business and supporting our customers. I am confident in Illumina’s opportunities and our long-term success.”

Grail, which has developed technology for the early detection of certain cancers, started as a research project within Illumina. It was incorporated as a separate company in 2016. While it doesn’t compete with Illumina in gene sequencing, it does use gene sequencing in its blood tests for cancer.

Illumina went ahead with the purchase of Grail despite an early complaint from the FTC, which stated that the acquisition would reduce innovation in the U.S. market and raise prices. Still, Illumina was confident it would win in court.

The sale of Grail will be carried out through a third-party sale or a capital markets transaction, the company said, with the aim of closing the deal by the end of the second quarter next year.

Now that the commission’s challenge to the deal has been accepted in court, other tech giants and dominant companies in their respective fields could see their takeover attempts curbed by the agency. Since taking office in 2021, Lina Khan, chair of the FTC, has taken a more aggressive stance on mergers that she believes could harm the economy.

Mel Sembler, a gregarious developer and major Republican fundraiser whose largesse was repaid with ambassador awards by two presidents and who founded a controversial “tough love” drug rehabilitation program, died Oct. 31 at his home in St. Petersburg. , Florida. He was 93.

His son Brent said the cause was lung cancer.

Mr. Sembler, who developed more than 350 shopping centers and other retail projects in the Southeast, was a sought-after fundraiser for Republicans and could shake the money tree for $11 million at one dinner. He was also an advisor to office seekers in the Republican establishment who had open access to power in the era before the rise of Donald J. Trump. His beneficiaries included Dick Cheney, Newt Gingrich, Mitt Romney and three members of the Bush clan.

Mr. Sembler was outspoken about the role of money in politics. “Money gives you a voice,” he told The Tampa Bay Times in 2019. “Without money you have no voice.”

His fundraising spanned from the 1980s, when $100,000 was the pinnacle of political donations, to the current era of eight-figure donations to super PACs, unleashed by the Supreme Court’s 2010 Citizens United decision.

After donating more than $100,000 to George HW Bush’s successful 1988 presidential race and chairing his inaugural committee, Mr. Sembler was appointed ambassador to Australia. He served throughout President Bush’s term, from 1989 to 1993.

The transactional nature of the appointment — a political patronage ingrained in both parties — led cartoonist Garry Trudeau to depict Mr. Sembler in a “Doonesbury” comic strip as the highest bidder at an evening wear auction for the postal service in Australia.

Mr. Sembler forged particularly close ties with the Bush family. As finance chairman of the Republican National Committee during the 2000 elections, he arranged more than $220 million in donations for George W. Bush and other candidates. The second President Bush appointed him ambassador to Italy, where he served from 2001 to 2005.

The Sembler family once celebrated a Shabbat dinner at the White House, after which Mr. Bush, who liked to go to bed early, got up from the table and said, “Okay, Semblers, time to go home,” Brent Sembler recalled in an interview. . Mr. Bush later worked on his memoirs in a dressing gown on the patio of Sembler’s home. His brother Jeb liked to call Mr. Sembler’s wife, Betty, the “ambassador.”

For Jeb Bush, the third member of his family to run for president, Mr. Sembler oversaw donations of more than $100 million to a super PAC in 2015 — a figure so daunting that experts predicted Mr. Bush could be unbeatable in the Republican Party’s primary arena. that was putting it together.

But Mr. Bush, a former governor of Florida, flamed out early, a victim of Republican voters’ Bush fatigue and of the populist unrest that propelled Trump, who would reshape the Republican Party.

“I don’t understand our country anymore,” Mr. Sembler told The Tampa Bay Times after Jeb Bush’s premature withdrawal. He said he would “seriously think” about voting for Hillary Clinton, the Democratic nominee, in the general election.

But Mr. Sembler, like many traditional major Republican donors, ended up with Mr. Trump. He was appointed vice chairman of finance by the Republican National Committee in 2016 to bolster Trump campaign donations. He later raised money for the inauguration.

“I am a supporter of the party, and he is the leader of my party,” Mr. Sembler explained two years later.

Melvin Floyd Sembler was born on May 10, 1930 in St. Joseph, Missouri, the son of Benjamin Sembler, a businessman, and Fanny (Magoon) Sembler, a homemaker.

Mel Sembler met Betty Schlesinger when they were students at Northwestern University, and they married in 1953. She died in 2022. In addition to his son Brent, Mr. Sembler is survived by two other sons, Martin and Greg; a sister, Delores Krakower; and 12 grandchildren.

In the early 1960s, Mr. Sembler convinced a group of merchants in downtown Dyersburg, Tenn., to move to a new configuration of side-by-side stores along a highway. It was an early incarnation of the strip mall.

After moving his family to St. Petersburg in 1968, Mr. Sembler began developing shopping centers, eventually anchored by a Publix or other supermarket, in small towns throughout Florida. The Sembler Company went on to develop the flashy BayWalk entertainment complex in St. Petersburg and Centro Ybor, a shopping center in Tampa.

Beginning in 1976, Mr. Sembler also financed and oversaw a chain of residential drug treatment centers for adolescents, Straight Inc., which embraced a strict program of incarcerating teenagers and subjecting them to intensive supervision and peer pressure.

The motivation behind the centers, according to Brent Sembler, was his parents’ discovery that one of their three sons had become addicted to drugs. One of the first visitors to one of the Straight centers, in the 1980s, was Nancy Reagan, then the first lady, who drew on the experience to create her “Just Say No” anti-drug campaign.

About a dozen centers opened in several states, but the program was shut down due to controversy in 1993. A Virginia jury had a former Straight Inc. resident. Awarded $220,000 for being held against his will, and a Florida jury awarded another former client $721,000 in a lawsuit. about abusive practices.

Mr. Sembler continued to support anti-drug causes. In 2016, he donated at least $1 million to defeat a constitutional amendment in Florida that sought to expand access to medical marijuana. Voters overwhelmingly approved the measure.