April 20, 2020, Souther District of New York – Marianne T. O’Toole, the Chapter 7 Trustee for the estate of Michael P. DAlessio (the “Debtor”) recently initiated adversary proceedings against an Indian casino, his accountant and his brother-in-law seeking to clawback nearly $1.2 million that the doomed fraudster allegedly paid them.
On April 20, 2020, the Trustee initiated these complaints in the U.S. Bankruptcy Court for Southern District of New York specifically against Seminole Hard Rock Hotel & Casino, Seminole Hard Rock Hotel & Casino, Seminole Hard Rock Entertainment, Inc., Seminole Tribe of Florida, accountant Anthony Capeci of Huntington and brother-in-law Domenick Schettino ( the “Defendants”)
According to the Trustee, most of the payments made by the Debtor were improper because they were not made on account of an antecedent debt owed by the Debtor to the Defendants. The Trustee argued that the Debtor did not receive fair consideration or reasonably equivalent value in exchange for the transfers he made. Thus, the alleged transfers were either preference or fraudulent according to Sec. 547 and 548 of the Bankruptcy Code. Further, the Trustee also argued that certain transfers were made after a Chapter 7 liquidation petition was filed and were not approved by the court.
Previously, the Debtor had pleaded guilty to bankruptcy fraud, for concealing assets and was also sentenced to six years in prison. In 2017, as his real estate developments were floundering, the Debtor allegedly made 19 payments to one of the Defendants, Domenick Schettino, from personal bank accounts, totaling $561,676. These transfers, according to the Trustee’s lawsuit, were done to hinder, delay or defraud creditors and the Debtor did not receive fair consideration or reasonably equivalent value in exchange for the alleged transfers.
The complaints also alleged that after the Debtor was forced into Chapter 7 liquidation, the Debtor allegedly wired $100,000 to the Seminoles and $300,000 to Capeci. Two days later, he wired $30,000 to Schettino, and three days after that, $205,000 to the Seminoles. None of the transactions was approved by the bankruptcy court.
Judge Robert D. Drain is presiding over the Debtors bankruptcy cases. The case no. is 18-22552- rdd in the United States Bankruptcy Court for the Southern District of New York.