Three real estate investors have pleaded guilty to their part in a $119 million mortgage fraud case.
Two New York and one New Jersey resident were complicit in a property scheme that involved two multi-million dollar loans, one with Fannie Mae.
Fredrick Schulman, Moshe “Mark” Silber, and Chaim “Eli” Puretz were all involved in the fraudulent activity that led to the guilty pleas in the District of New Jersey this week.
Three men plead guilty in $119m mortgage fraud case
According to the court report, Silber, Schulman, and Puretz all concocted a deceptive scheme to swindle mortgage loans. This illicit activity was perpetrated by Silber and Schulman from 2018 to 2020.
Rhodium Capital Advisors was Silber and Schulman’s company, supposedly “involved in the acquisition and management of Williamsburg of Cincinnati, an apartment complex in Cincinnati, Ohio.” Purtez controlled Troy Technology Park in Troy, Michigan.
Silber and Schulman deployed a scheme involving the purchase of Williamsburg of Cincinnati in March 2019. They concurrently created a purchase order of $95.85 million despite the property’s sale price being $70m.
“On March 8, 2019, two closings were performed, one for the true $70 million sales price and another for the fraudulent $95.85 million sales price presented to the lenders. Based on the co-conspirators’ false statements, the lender and Fannie Mae funded a loan in the amount of $74.25 million for the purchase of Williamsburg of Cincinnati,” said the court report.
Purtez and a group of co-conspirators purchased Troy Technology Park in September 2020 for $42.7m. The price was inflated similarly to the Williamsburg of Cincinnati purchase, inflating the supposed acquisition price to $70m.
According to the court, “Puretz and his co-conspirators submitted to the lender and appraiser a fraudulent letter of intent to purchase the property from another party for $68.8 million and other fraudulent documents. Based on the fraudulent documents, the lender funded a loan for $45 million.”
Silber, Schulman, and Purtez face five years in prison for each of the counts levied at them. They will be sentenced on December 3.
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