Earlier this week, 2.6 terabytes of documents exposed hundreds of thousands of offshore companies operating via Mossak Fonseca, a small Panamanian law firm with franchises all over the world – including Switzerland, the British Virgin Islands, Cyprus and in the British crown dependencies.

  • Stonehenge Partners, the Witkoff Group, M1 Real Estate, a co-owner of Hiro Real Estate and the Nakash family have all been found in the ICIJ Offshore Leaks Database.
  • Although viewed as the largest leak of private and financial legal documents in history, the legalities of the holdings are unknown.
  • Skeptics are sifting through the documents to see who has potentially been disguising illegal financial activity.
frenky362 / Shutterstock.com

frenky362 / Shutterstock.com

Last week, 2.6 terabytes of documents exposed hundreds of thousands of offshore companies operating via Mossak Fonseca, a small Panamanian law firm with franchises all over the world — including Switzerland, the British Virgin Islands, Cyprus and in the British crown dependencies.

Some of the documents indicate large sums of money were transmitted through foreign companies and trusts, and so far, five major New York City real estate names have appeared in the documents: Stonehenge Partners, the Witkoff Group, M1 Real Estate, a co-owner of Hiro Real Estate and the Nakash family have all been found in the ICIJ Offshore Leaks Database.

Although viewed as the largest leak of private and financial legal documents in history, the legalities of the holdings are unknown. Offshore accounts are perfectly legitimate as long as individuals disclose foreign activities in filings so they can pay taxes accordingly.

“At this very preliminary stage, all that we have been told is that there are certain names associated with certain Panamanian accounts,” said Terrence A. Oved, chairman of Oved & Oved LLP, a real estate law firm in NYC. “It is worth noting that maintaining offshore accounts is not unlawful when the applicable disclosure requirement is met.”

Mossack Fonseca presumably lawfully holds property and bank accounts — typically dealing with accountants, lawyers, banks and trust companies rather than directly with owners.

Why would NYC’s real estate possessors want to hold their money offshore? Inheritance, estate planning and dealing with currency restrictions are legitimate purposes for offshore operations, but skeptics are sifting through the documents to see who has potentially been disguising illegal financial activity.

Stonehenge Partners

Stonehenge Partners, owned by Ofer Yardeni, is a private real estate investment company with over $3 billion across 23 properties in New York City, totaling 3,000 apartments and 3.5 million square feet of residential space.

According to the database, Yardeni operates offshore business via Portcullis Trustnet, the offshore service provider used frequently by Mossak Fonseca.

The master client on Yardeni’s account is Meshushe Limited, an active offshore entity in the British Virgin Islands incorporated in Oct. 2002.

A request for comment from Stonehenge Partners was not returned.

The Witkoff Group

Real estate development and investment firm the Witkoff Group is also accounted for in ICIJ’s database. The firm has been involved in over 75 transactions of over 18 million square feet – and $7 billion in deals. Notable holdings include the Park Lane Hotel and redevelopment of the Woolworth Building in the Financial District.

Scott Alper, Witkoff’s president and CIO is linked to three offshore entities in the British Virgin Islands dating back to Feb. 2008: Devonshire Investment I Limited, Devonshire Investment II Limited and Devonshire Investment III Limited. The offshore service provider is Commonwealth Trust Limited.

The offshore entities hold a similar name to a landmarked office building previously owned by the Witkoff Group, Devonshire House in London. The building was acquired in 2007, redeveloped and rented to Bain Capital, Highbridge and Boston Consulting Group, among others. It was sold in 2013 at record price per square foot rates for an office building.

Alper told The Real Deal all U.S. taxes were paid in full and offshore entities were “standard operating procedure on foreign investment.”

All three entities are listed as active, although data is only current through 2010.

James Stromber, general counsel and COO of Witkoff, is also listed as linked on the database.

M1 Real Estate

M1 Real Estate is an international company headquartered in Beirut with offices scattered across the world, including New York. Executive Director Moustapha El-Solh is listed as director of Cresta Overseas Limited (name misspelled as Moustpha either in the database or on his account) since Nov. 2006 to June 2007.

M1 is listed as a shareholder of Cresta beginning Nov. 2006.

A spokesperson from M1 told The Real Deal that it’s an international firm, so offshore holdings aren’t uncommon.

However, a spokeswoman from M1 told Inman, “We’re not involved.”

Hirokuni Honzawa

As co-owner of Hiro Real Estate with his brother, Hirokuni Honzawa sold the Socony-Mobil Tower for $900 million to David Werner back in 2014. From ICIJ’s database, Honzawa is listed as director of Top Performance Worldwide Limited since Feb. 1996.

Hirokuni’s two sons, who formerly operated Hiro’s New York office, Yukihiro and Masahiro, are linked to the offshore entity as well.

According to a 2014 New York Posreport, Hiro Real Estate owed $40 million in unpaid city and state taxes. The firm sold most of its assets, including the Mobil building, before the company’s New York division largely dissolved. Both Hirokuni and Yukihiro died years ago, while Masahiro left the family business.

Hiro Real Estate and the Honzawa family could not be reached for comment.

The Nakash Family

Nakash Holdings begun purchasing chunks of U.S. real estate within recent years, including a Miami Beach hotel for $90 million back in 2014. Jordache Enterprises, a designer jeans brand, operates the real estate investment firm via Joseph, Avi and Ralph Nakash. The family also owns the Versace mansion in South Beach and the Bond Building in Washington D.C.

The brothers are listed as directors of Blue Jeans Ltd. since March 2003. There are 17 shareholders under the entity, all sharing the Nakash last name. The “master client” is Robert A. Spiegelman, chief council for Jordache Enterprises.

In addition to Blue Jeans Ltd., Joseph Nakash is listed as a shareholder of MG Overseas Ltd. since 1999, Iron Will Group Ltd. since 2001 and Sub Iron Group Ltd. since 2002. His listed address on the database is Jordache Enterprises in New York.

The Nakash family did not respond to a request for comment.

Oved advised to wait for more clarification before rushing to judgements.

“Whether or not these individuals maintained these accounts, and if so, failed to disclose them, remains to be seen,” he said. “Because New York is the epicenter of the financial universe, it is not unreasonable to presume a larger connection to this matter than there may actually be.”

Email Jennifer Riner

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