Lawsuit Alleges $3 Million in Kickbacks from Inflated Invoices
The famed Cipriani hospitality group is embroiled in a legal battle with two former executives and a vendor, accusing them of a ten-year scheme involving fake invoices and kickbacks. According to a lawsuit filed Thursday in Manhattan Supreme Court, the alleged scam resulted in millions of dollars in losses for Cipriani.
Inflated Invoices and Shell Company Alleged
The lawsuit details a scheme orchestrated by Andrew Heaton, Cipriani’s former operations director. Heaton is accused of approving phony, inflated, and even duplicate invoices from Fulton Supply Hardware, a vendor doing business with Cipriani. The lawsuit estimates these fraudulent invoices totaled $5 million. Heaton allegedly received a cut of this money for himself.
Bogus Invoices and Shell Company at Center of Scheme
Cipriani contends that Fulton Supply Hardware, led by president Yevgeney Portnoy and general manager Philip Corhan, issued fake invoices for at least a decade. The lawsuit alleges the creation of a shell company to further disguise the fraudulent activity. These invoices supposedly represented services provided to Cipriani, such as refrigerator maintenance.
Facilitating the Fraud
The lawsuit also names Franklin Palaquibay, Cipriani’s former facilities manager, as a co-conspirator. Palaquibay allegedly played a role in placing and picking up orders to create the illusion of legitimate transactions.
Lawsuit Seeks Repayment and Damages
Cipriani is seeking compensation for the financial losses incurred due to the alleged fraud. The exact amount of damages will be determined at trial, though the lawsuit estimates the defendants owe at least $3 million, representing a portion of the fraudulently obtained funds.
