Opinion ID: 3012971
Heading Depth: 2
Heading Rank: 3

Heading: The Barclay Hotel.

Text: Count Eleven charged Pantelidis with making a false oath before the bankruptcy court during hearings on two competing plans of reorganization to purchase the Barclay Hotel from bankruptcy. One of the plans was Pantelidis’s. Pantelidis is accused of claiming to have “a little under a million” in cash and readily marketable securities available to him to secure financing for the project. The indictment alleged that Pantelidis actually had approximately $101,000 in cash and unpledged securities at the time. The indictment also alleged that Pantelidis’s financial status was a material matter to the bankruptcy court. Neither of the two plans was accepted, which necessitated the sale of the hotel at auction. At auction, Pantelidis won the right to purchase the hotel for $5.5 million, which he did in January 1997. According to the closing documents from the subsequent sale of the hotel in June 1999, Pantelidis was paid in excess of $9 million for the hotel less than two and one-half years after he purchased it for $5.5 million. His profit allowed Pantelidis to pay off more than $4 million in business and personal debts. At the time of closing in June 1999 (which was two months after the sale of his 1315 Walnut Street property), and while Pantelidis and the government were in plea negotiations, the government learned that Pantelidis wished to sell his interest in the Barclay. As noted in an agreement reached between Pantelidis and the government concerning 6 the sale, the government was aware of a difficult situation involving the property and the benefits to be obtained through the sale. The parties to the sale, and others, requested that the government clear the way for the sale of the building. The government agreed not to seek money laundering charges against Pantelidis concerning the sale of the Barclay, primarily on the condition that, from the gross proceeds of the sale, Pantelidis escrow $850,000 allegedly owed to Elizabeth McHenry, an elderly benefactor of Pantelidis, and that he escrow all remaining proceeds from the sale. On June 25, 1999, a week after the government agreed not to seek money laundering charges against him, Pantelidis sold his interest in the Barclay. The closing documents for the sale show that, as agreed, Pantelidis escrowed $855,496.50 for the benefit of Elizabeth McHenry, and escrowed the net proceeds of the sale, $371,211.35. Exhibit A to the closing documents shows that company and personal debts of Pantelidis, well in excess of $4 million, were paid off from the gross proceeds. Among the debts paid off were: $20,000 to Elizabeth McHenry’s attorneys; $236,250 to Pantelidis’s civil attorneys; $50,000 to Pantelidis’s accountant; $212,000 to certain of Pantelidis’s employees; $68,250 to Pantelidis’s criminal attorney; and $2,255,863 to the Barclay Condo Association. The Barclay proceeds were also used to pay off three loans to Pantelidis which were, according to the indictment, procured by false statements or fraud. These bank loans are involved in Counts Four, Five and Six of the indictment. Approximately $150,000 of the $371,211 net proceeds from the Barclay sale remains in escrow. The government does not contend that the remaining $150,000 constitutes direct proceeds of criminal activity. Rather, because the government says that it cannot recover the entire $637,441.40 in proceeds from the remaining seized and escrowed funds available for forfeiture from the Juniper Street and Walnut Street properties (now approximately $355, 153), the indictment seeks to forfeit the $150,000 as substitute assets pursuant to 18 U.S.C. § 982(b) and 21 U.S.C. § 853(p). 7