ANDREW ALBERT, DEVELOPER OF PHONY SHOPPING WEBSITE INDICTED FOR DEFRAUDING INVESTORS

Manhattan District Attorney Cyrus R. Vance, Jr., today announced the indictment of ANDREW ALBERT, 49, for defrauding at least three investors of approximately $590,000 in a luxury shopping website called ON1AVE.com that he was purporting to launch. The defendant was indicted on charges of Grand Larceny in the Second Degree, Scheme to Defraud in the First Degree, and Criminal Tax Fraud in the Third Degree.1

“Andrew Albert falsely told investors that his shopping website would feature a virtual street akin to famous retail boulevards like Madison Avenue or Rodeo Drive,” said District Attorney Vance. “In reality, the company he created served as nothing more than a bank account that the defendant used to pay for his personal expenses and lavish lifestyle. The defendant’s elaborate deception defrauded investors of more than half a million dollars.”

According to documents filed in court, ALBERT formed a company called Virtual Etail Group LLC (“VEG”) in June 2008. As ALBERT told prospective investors, VEG was going to develop, launch and operate a new high-end shopping website called ON1AVE.com. Using an online avatar, visitors to the website were to “walk” down a virtual street, shop in the stores – which would be linked to actual stores, such as The Gap, Prada, and Ralph Lauren – and “try on” the clothes using avatars programmed with the shopper’s measurements before purchasing.

In the winter of 2008, according to documents filed in court, ALBERT began looking for individuals to invest in VEG. He told them that they would not only be funding the development of the site, but also would become VEG employees and equity members. When specifically asked how he would support himself during the development period, ALBERT assured investors that he had savings from other projects, as well as stocks and bonds. By June 2008, he had convinced his first investor to put $250,000 toward the online venture. Later that summer, another individual invested $100,000 in VEG. In the fall of 2008, a third investor came forward and put $240,000 toward the company. Each was provided an equity share of VEG.

In total, ALBERT raised approximately $590,000 from investors, which was deposited into a VEG bank account that the defendant opened in June 2008 and on which he remains the sole signatory. What the investors did not know was that the defendant had no intention of developing the website ON1AVE.com or any other business under VEG. As soon as the first investment came into the VEG account, ALBERT began to transfer tens of thousands of dollars to an account in the name of Equation Entertainment LLC (“Equation”), a nearly defunct media consulting business that Albert had formed in 2004.

According to documents filed in court, for several years, ALBERT had used the Equation account as a personal checking account, using it to pay for rent, utilities, clothing, health and beauty expenditures, groceries, restaurants, and other personal expenses. In the fall of 2008, around the time that the third VEG investor came in, the defendant and his wife moved from a small apartment in Greenwich Village to a large loft in Tribeca that cost approximately $2,000 more in rent a month. ALBERT used more than $51,000 of VEG money to renovate and furnish the apartment. He also spent approximately $12,000 of VEG money on moving and storage expenses.

When the investors repeatedly asked ALBERT for a financial accounting and progress reports, he ignored their inquiries by simply reassuring them that the project was moving forward.

Between June 2008 and February 2010, ALBERT removed nearly $67,000 in ATM and cash withdrawals from the VEG account. In all, he used approximately $348,360 of stolen VEG funds for the following expenses, among others:

more than $26,000 on groceries from stores including Citarella and D’Agostino,
more than $20,000 on clothing and accessories,
more than $9,000 on hair and make-up expenses,
approximately $6,700 on dog grooming, pet food and veterinarian bills,
nearly $6,000 on health club expenses
In an effort to conceal his thefts, according to documents filed in court, ALBERT did not file income tax returns in either his name or in the name of VEG in 2008 and 2009.

Assistant District Attorney Judy Salwen, Deputy Bureau Chief of the Special Prosecutions Bureau, and Assistant District Attorney José Fanjul are prosecuting the case. Account Investigator Michelle Burgos of the District Attorney’s Forensic Accounting and Financial Investigations Bureau assisted in the investigation, under the supervision of Bureau Chief Robert Demarest. Investigator Eva Barriga of the District Attorney’s Investigations Bureau also assisted in the investigation, under the supervision of Chief Investigator John Bilich and Supervising Investigator Santiago Batista.
District Attorney Vance also thanked the New York State Department of Taxation and Finance, under Commissioner Thomas H. Mattox, including Forensic Tax Auditor Ellen Cheu, who assisted in the investigation under the supervision of Nicholas Capkovic.

Defendant information:
ANDREW ALBERT, D.O.B. 7/19/1962
New York, NY

Charges:

Grand Larceny in the Second Degree, a class C felony, 4 counts
Criminal Tax Fraud in the Third Degree, a class D felony, 2 counts
Scheme to Defraud in the First Degree, a class E felony, 1 count

A class C felony is punishable by up to 15 years in prison, a class D felony is punishable by up to 7 years in prison, and a class E felony is punishable by up to 4 years in prison.

1 The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.

Comments

  1. This is a bullshit case.. I hear the assistant DA is friends with one of the plaintiffs in the civil suit. Cy and his lackeys should spend tax payer dollars on convicting criminals, not on witch hunts for disgruntled start up investors

    ReplyDelete
  2. Do you have proof or are you just reiterating gossip?

    ReplyDelete

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