For decades, the ritzy leisure and dining group Cipriani has attracted tabloid fixtures to its banquet halls, from Donald Trump to Taylor Swift, the Clintons, Kardashians, and Kennedys. But according to a new lawsuit, some of the real drama has played out within the company’s own ranks.
The complaint, filed in New York Supreme Court on Thursday, alleges that Cipriani was duped by its own facilities director and one of his subordinates into paying thousands of false invoices to outside vendors.
The company’s regional facilities director, Andrew Heaton, and facility assistant manager Franklin Palaquibay, received kickbacks for facilitating the false payments, the lawsuit asserts. In all, Cipriani says it paid at least $5 million to defendants Fulton Supply Hardware and Tek Mek Inc. “based on the fraudulent invoices.”
ADVERTISEMENT
Reached by The Daily Beast, defendant Yevgeniy Portnoy acknowledged that Fulton Supply and Tek Mek are his companies, though he said he was not aware he had been sued. “Now that you’re telling me this, I guess I gotta call an attorney,” he added. He insisted that he and his companies have done nothing wrong, however, and argued that, in fact, Cipriani owes his businesses money. “The only defrauding is by them,” he said.
Palaquibay declined to comment. The other defendants—Portnoy’s father, Aleksander; Fulton Supply employee Philip Corhan; and Heaton could not be reached for comment. An attorney for Cipriani also declined to comment beyond the contents of the complaint.
According to Thursday’s filing, Cipriani hired Heaton in 2005 to oversee facilities and operations at its Wall Street location, the former location of the New York Stock Exchange. He had significant control over day-to-day affairs, including managing the back of the house, overseeing maintenance, and approving third-party invoices.
Palaquibay joined as facility assistant manager in 2011, and two years later, the company promoted Heaton to area director of facilities and operations, expanding his domain to other locations.
The alleged fraud was fairly straightforward. The lawsuit claims that the Fulton Supply defendants created false, inflated, or duplicate invoices and overbilled Cipriani for its repair and maintenance work. To disguise the alleged misconduct, Yevgeniy Portnoy and Corhan allegedly created an “illegitimate shell company” called Tek Mek in 2022 and routed transactions through it, “with Heaton’s and Palaquibay’s continued assistance.”
The lawsuit claims that Heaton instructed Palaquibay to pick up orders from Fulton Supply to create the impression that the deals were above board. The defendants also allegedly used Tek Mek to falsify “invoices and overbilling for refrigeration repair and maintenance services rendered by other companies.”
The Fulton Supply invoices were thinly detailed, the complaint asserts, and only listed overall prices for parts and labor. Heaton would then allegedly sign off on the deals.
The lawsuit includes examples of numerous duplicate charges, which the company says were listed under separate invoice numbers to falsely imply that they were distinct jobs. For instance, there were two separate billings, each for exactly $1,799, to reupholster a sofa at a downtown location, and three separate charges on the same day of more than $2,000 apiece for “service napkins” at the same location, the complaint says.
In September 2021, when an outside vendor asked to deal with Cipriani directly, rather than work with Tek Mek, Heaton fired off an anxious email to Portnoy telling him to have the person “or whomever… keep their mouths shut and only communicate with you, me or Phil,” the lawsuit says.
Heaton is accused of other obvious blunders, such as ordering “an excessive and unnecessary number of full propane tanks and propane tank refills from Fulton Supply” and lying to Cipriani’s accounting department about whether he had received approval for certain credit card charges. To cover his tracks, the company says, he “deleted text and WhatsApp messages” from his corporate phone.
Both Palaquibay and Heaton were fired last fall, the lawsuit says. Cipriani is now suing them and the other defendants for fraud, unjust enrichment, racketeering violations, and several other claims.
