John Simonlacaj (The Xi, Getty)

John Simonlacaj (The Xi, Getty)

A former HFZ Capital executive faces four months in prison for his connection to an alleged construction bribery scheme.

In January, John Simonlacaj, HFZ’s former managing director of development, copped to submitting a false tax return related to renovation work at his home.

He had accepted $100,000 worth of free labor and materials from CWC Contracting, a carpentry subcontractor — allegedly controlled by the Gambino crime family — that worked on the XI, HFZ’s $2 billion luxury condo and hotel in Chelsea.

Simonlacaj failed to report $56,000 worth of the work as taxable income in his 2019 filings, authorities said. Another charge against Simonlacaj, alleging wire fraud conspiracy, was dropped as part of a plea agreement.

Others involved in the scheme, including nearly a dozen alleged members and associates of the Gambino family, have pleaded guilty to conspiracy charges related to doling out bribes to secure work for CWC with HFZ and other developers.

“These extensive, free benefits were not an unreported gift from the Gambino crime family to their friend, Simonlacaj,” prosecutors wrote in a sentencing memo. “These benefits were not undeclared income from a side business or a payment to someone in need. Rather, they were bribes — extensive in-kind benefits to Simonlacaj…to secure and maintain Simonlacaj’s support for CWC.”

Prosecutors alleged that between June 2018 and June 2019, CWC paid hundreds of thousands of dollars in bribes to employees of multiple development and construction companies in exchange for work and larger payouts. Andrew Campos, the owner of CWC and an alleged Gambino family captain, pleaded guilty to racketeering conspiracy. He and others are still awaiting sentencing.

“John takes responsibility for the modest tax crime he committed and looks forward to moving on with his life,” Simonlacaj’s attorney, Glenn Colton, told The Real Deal, adding that his client maintains his innocence regarding alleged organized crime ties and defrauding HFZ.

HFZ fired Simonlacaj in December 2019, but has been plagued by a series of problems in the past year. The company is fighting off several lawsuits, foreclosures and internal disputes.

In addition to four months in prison, Simonlacaj must pay a $20,000 fine. Prosecutors had sought that sum, as well as 10 months in prison. A representative for the U.S. Attorney for the Eastern District of New York declined to comment on Simonlacaj’s more lenient sentence.

Meanwhile, his attorney called for probation with strict home confinement and community service.

“Society will not be safer if John is imprisoned. If anything, the opposite is true,” Colton wrote in a memo prior to sentencing. “A good man made a mistake, has expressed remorse, and is committed to making amends.”

Colton also argued against prison time due to Simonlacaj’s heart condition and his inability to get the Covid-19 vaccination, due to a “penchant for severe allergic reactions.”

Prosecutors did not buy this argument, nor that Simonlacaj was remorseful. In fact, prosecutors’ presentence memorandum points out that Simonlacaj pleaded guilty in 2016 to aiding and abetting the filing of a false tax return.

“The defendant claimed he was “ashamed of what [he] did” and needed to “apologize” to both the court and the government,” the memo states. “As it turns out, it did happen again, and then some.”