The late Joseph Simonelli, the chief financial officer of a...

The late Joseph Simonelli, the chief financial officer of a prominent family-owned Long Island heating and air conditioning contracting business, F.W. Sims.

Relatives of deceased Long Island business executive Joseph Simonelli have until Aug. 27 to respond to federal prosecutors seeking to seize a horse farm and two houses they own in Riverhead and Calverton.

Prosecutors claim Simonelli bought or improved the properties using money he embezzled from his family's West Babylon heating and contracting company, F.W. Sims Co.

Simonelli, 55, was charged in November with stealing more than $10 million and three months later was found dead of an apparent suicide in his Riverhead home.

In March, prosecutors filed paperwork in federal court in Central Islip to acquire the three properties and also $1.3 million in two bank accounts they say were used by Simonelli and his associates in the alleged fraud.

Simonelli's wife, Deborah Grimaldi-Simonelli, and stepdaughter, Dana Grimaldi, have been negotiating with prosecutors over the fate of the properties, according to court papers filed in June by the U.S. attorney's office in Brooklyn. Judge Arthur Spatt set a deadline of Aug. 27 for them to respond in the case.

"We expect to vigorously defend the parties therein," Michael Cornacchia, a Manhattan attorney representing Simonelli's wife and stepdaughter, said Tuesday. "We'll submit our answers on or before Aug. 27."

Cornacchia declined to comment further. His clients could not be reached for comment.

Serendipity Farms, the 19-acre horse farm prosecutors say Simonelli owned, is on the market for $3 million, according to an online real estate listing.

A Victorian-style house on Kerry Court in Riverhead allegedly built by Simonelli in 2013 is under contract, according to an online ad listing the property for $895,000. A Mill Road home also targeted by prosecutors was last sold in 2012 for $310,000 and does not appear to be on the market.

F.W. Sims, whose top executives include several of Simonelli's siblings, has also filed paperwork in the case claiming ownership of the properties.

"We continue to work with the government and hope to have an expeditious resolution to this," Jack Piana, a Hauppauge attorney representing the company, said Tuesday.

Prosecutors said in a June court filing that negotiations were complicated by a separate lawsuit filed in state court by F.W. Sims and others against Simonelli's survivors and associates.

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