Scheme involved inflated property prices and stolen identities
Three real estate investors have pleaded guilty to defrauding lenders out of more than $119 million in a multifamily mortgage fraud scheme.
Fredrick Schulman, 72, of New York, Chaim "Eli" Puretz, 29, of New Jersey, and Moshe "Mark" Silber, 34, of New York, have all pleaded guilty to one count of conspiracy to commit wire fraud affecting a financial institution.
According to court documents from the Attorney’s Office for the District of New Jersey, the trio conspired to defraud lenders and Fannie Mae by submitting falsified documents to obtain loans for two separate properties: Williamsburg, an apartment complex in Cincinnati, and Troy Technology Park in Troy, Michigan.
For the Williamsburg property, Schulman and Silber, managing members of Rhodium Capital Advisors, acquired the apartment complex for $70 million. They then fraudulently represented the purchase price as $95.85 million using a stolen identity and forged documents, securing a $74.25 million loan from Fannie Mae. The scheme involved conducting two separate closings on March 8, 2019, one reflecting the actual sale price and another the inflated price.
Similarly, in September 2020, Puretz and his co-conspirators purchased Troy Technology Park in Troy, Michigan, for $42.7 million. They inflated the sale price to $70 million by submitting a false letter of intent and other fraudulent documents to a lender. This deception enabled them to obtain a $45 million loan.
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To mask their activities, they arranged a $30 million short-term loan to simulate having sufficient funds for the transaction, again resulting in two closings: one for the actual price and another for the fraudulent figure.
The three investors face sentencing on December 3 and could receive up to five years in prison. The final sentence will be determined by a federal district court judge, who will consider the US Sentencing Guidelines and other relevant factors.
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