Embattled developer Ziel Feldman has launched a lawsuit against his former business partner, alleging he fraudulently diverted company funds to himself through credit card reimbursements and wire transfers.

Feldman's company, HFZ Capital Group, has been hit with lawsuits from lenders and partners, but it sued Nir Meir in Suffolk County court this week, The Real Deal first reported. Feldman claims Meir "bilked" HFZ while "styling himself" as a managing partner.

He alleges that Meir transferred $5M from an HFZ bank account to himself between 2017 and 2020. The suit further accuses him of taking more than $11M in illegitimate credit card reimbursements for money spent on wine. Further, Feldman says Meir illegally took ownership of a $45M home in the Hamptons that belongs to HFZ by forging documents.

"During the same years that Meir was siphoning off millions from HFZ, he also resided in a HFZ-owned and furnished Upper West Side apartment worth $13M, rent-free,” the lawsuit claims.

Feldman alleges that Meir had become “increasingly controlling and secretive” about the company assets and that he was terminated from the company when the extent of his “malfeasance” became clear.

“Meir, in effect, had been using HFZ as his own personal piggy-bank,” HFZ's suit reads.

Feldman has requested a lien on the Southampton property at 40 Meadow Lane, which a lender has previously tried to seize, to stop a sale. Meir has opposed that request, and his lawyer told TRD the property was sold.

Meir's attorney also told the publication that the allegations were meritless, that Feldman was using Meir as a “scapegoat” and that HFZ in fact owes Meir more than $25M. Meir, who was a managing partner at the firm until December, claims to have paid $10M to satisfy lenders.

But Feldman claims in the suit that Meir has been “looting HFZ’s assets” for years and hid it “by virtue of his position at the company, which he used aggressively to ensure the compliance of HFZ’s employees by fostering a culture of fear and reprisals by Meir if staff members did not follow through on his directions.”

HFZ was embroiled in scandal in 2019, when multiple multiple employees were accused of accepting bribes and kickbacks from members of the Gambino family in exchange for inflating invoices and change orders at HFZ's billion-dollar condo development in Chelsea at 76 11th Ave, known as The XI.

Since the pandemic, the company has faced a slew of challenges. Its partner at a condominium conversion at 225 West 86th St. has taken control of the project. HFZ was sued at the start of the year by its lender, Children’s Investment Fund, for allegedly failing to pay $160M of its loan payments on The XI.