Feds seize Manhasset homes in CityTime case

Bill San Antonio

Federal agents seized two Manhasset homes last Wednesday as part of a guilty plea entered by three relatives of Mark Mazer, the alleged mastermind behind the CityTime information technology project fraud that swindled the city of New York for more than $700 million, for their role in the scheme. 

Mazer’s wife Svetlana, his mother Larisa Medzon and cousin Anna Makovetskaya agreed in federal court in Manhattan on June 19 to forfeit $27 million in cash held in 91 bank accounts and four safety deposit boxes, as well as four real estate properties, which includes residences at 49 Harrow Lane and 97 Dorchester Drive within the Village of North Hills.

The homes, which are worth an estimated $4 million, will be used as partial restitution for the $500 million New York City is in the process of recovering from Science Applications International Corporation, the lead contractor who facilitated the project. 

The CityTime project was intended to modernize bookkeeping and payroll records across many of the city’s agencies, according to a release from the office of U.S. Attorney Preet Bharara, but over time its budget ballooned from just under $100 million to close to $700 million through a series of fraud, kickback and money laundering schemes.

“Through lies and subversion, each of these three defendants served as highly paid enablers of an epic fraud against the City of New York,” said Bharara, who represents the Southern District of New York. “And with their pleas today and multi-million dollar forfeitures, they will be stripped of their ill-gotten gains and potentially their liberty.” 

The New York Daily News reported last week that Mark and Svetlana Mazer used CityTime funds in 2008 to purchase the 4,100 square-foot brick colonial at the corner of Harrow Lane and Dorchester Street, which includes 10 rooms, four baths and three chimneys and is now worth an estimated $1.8 million. 

Medzon lives in the seven-room, three-bath 2,652-square foot Cape Cod house across the street, the Daily News reported, which was purchased in 2009 for $1.2 million.

Mark Mazer and his uncle Dimitry Aronshtein, a subcontractor working on CityTime, allegedly laundered millions in proceeds of their fraud and kickback funds by routing it through shell companies controlled by Svetlana Mazer, Medson and Makovetskaya and through other companies and offshore accounts located in Latvia, according to the release from Bharara’s office. 

Medzon withdrew more than $200,000 in cash derived from the scheme through hundreds of ATM transactions designed to evade currency transaction reporting requirements, while Makovetskaya lied to bank employees so they would open accounts in the name of a shell company that would facilitate the scheme, the release said.

Svetlana Mazer attempted to obstruct the CityTime investigation, the release said, by omitting her role in controlling the shell companies from sworn disclosures submitted to the city.

According to the release from Bharara’s office, Svetlana Mazer, 47, pled guilty to obstruction of justice, which carries a maximum penalty of 20 years in prison; Medzon, 68, pled guilty to intentionally structuring cash transactions to avoid currency reporting requirements, carrying a maximum penalty of five years in prison; and Makovetskaya, 42, pled guilty to conspiracy to make false statements to a bank, which carries a maximum penalty of five years in prison.

The Daily News reported that Mark Mazer has maintained his innocence and will be tried in the fall. His relatives will not be sentenced until after his case is over and the government officially takes possession of the homes, which will be auctioned off.

The proceeds of the homes will benefit federal law enforcement programs or be returned to the city. 

The Mazers will retain their 6-room, 2,917 square-foot home on Sussex Drive in Manhasset, which was purchased for $845,000 in 1999, according to news accounts.

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