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Tuesday, February 18, 2014

Menachem Stark's Business Missing More Money Than Thought, $3.6 Million


The company of slain Brooklyn businessman Menachem Stark "misappropriated" nearly twice as much money from its accounts as previously estimated, federal bankruptcy court records show.

More than $3.6 million was taken from accounts through various customer withdrawals from June 1, 2011, through Dec. 31, 2013, an attorney for German American Capital Corp., which has a claim in a bankruptcy case against Stark's real estate firm, South Side House LLC, said in a filing.

The amount of the unauthorized withdrawals from the company accounts had been estimated at about $1.7 million during about three months, according to a special trustee appointed after allegations of financial irregularities surfaced last month. Another account also had a balance about $200,000 less than expected.

Stark, 39, was abducted by at least two people outside his Williamsburg office late in the evening of Jan. 2 during a snowstorm. His partly burned body was found the next day by police in a trash bin at a service station on Cutter Mill Road in Great Neck.

NYPD detectives have been pursuing a number of leads; they have found the van used in the abduction and have linked Stark to it through DNA evidence, a law enforcement official familiar with the case said.

Police have been looking into a number of Stark's contractors and employees for a motive. 

While respected among many in his Hasidic community, Stark also was labeled by some as a slumlord and had defaulted on $29 million in mortgages.

It was unclear yesterday if the alleged misappropriations had anything to do with Stark's death. In addition to the withdrawals, the accounts had nearly $1.5 million in deposits that weren't reported as required in the bankruptcy case, court records show.

Jerome Reisman, a Garden City bankruptcy attorney who is not involved in the case, said the lengthy time period in which the withdrawals and deposits occurred without creating suspicion raised a question about the way the company was monitored in the bankruptcy case, which started in 2009.

Police have said they're exploring whether Stark had ties to criminals. 

The official said police have developed a circumstantial case but don't want to act prematurely.

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