Three real estate investors have pleaded guilty to engaging in an extensive, multi-year conspiracy to fraudulently obtain a $74 million loan and a $45 million loan and fraudulently acquire multifamily properties.
Fredrick Schulman, 72, of New York, and Chaim “Eli” Puretz, 29, of New Jersey, pleaded guilty today to one count of conspiracy to commit wire fraud affecting a financial institution. Moshe “Mark” Silber, 34, of New York, pleaded guilty on July 9 to one count of conspiracy to commit wire fraud affecting a financial institution.
According to court documents, between 2018 and 2020, Silber, Schulman, and Puretz conspired with others to deceive lenders into issuing a mortgage loan for a multifamily property and Fannie Mae into funding or purchasing the mortgage loan. Silber and Schulman were managing members of Rhodium Capital Advisors, an entity that was involved in the acquisition and management of Williamsburg of Cincinnati, an apartment complex in Cincinnati, Ohio. Puretz was one of the owners of commercial property Troy Technology Park in Troy, Michigan. Silber, Schulman, Puretz, and their co-conspirators provided the lenders and Fannie Mae with falsified documents including a purchase contract with an inflated purchase price and other fraudulent documents.
In March 2019, Williamsburg of Cincinnati was acquired for $70 million. However, Silber, Schulman, and other co-conspirators utilized a stolen identity to present a lender and Fannie Mae with a purchase and sale contract for $95.85 million along with other fraudulent documents. On March 8th that year 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 amounting to $74.25 million for purchasing Williamsburg of Cincinnati.
In September 2020 Troy Technology Park was acquired by Puretz along with co-conspirators for $42.7 million. However in order to support an inflated purchase price amounting to $70 million Puretz along with his co-conspirators submitted fraudulent documents including a letter intent from another party intending to purchase it at $68.8 million which they presented both lender as well appraiser thus securing themselves funding worth approximately forty-five-million dollars ($45M). To conceal this transaction's fraudulent nature they arranged short-term thirty-million-dollar ($30M) loans making it appear they had necessary funds needed closing sale; on September twenty-fifth (25th) title company based Lakewood NJ performed two closings reflecting both true value ($42M+) & false value($70M).
Silber Schulman & Puretz scheduled sentencing December third facing maximum penalty five years prison; federal district court judge determining sentence after considering U.S Sentencing Guidelines alongside statutory factors.
Principal Deputy Assistant Attorney General Nicole M Argentieri head Justice Department Criminal Division; US Attorney Philip R Sellinger District NJ; Inspector General Brian M Tomney Federal Housing Finance Agency Office Inspector General(FHFA-OIG); Postal Inspector Charge Eric Shen US Postal Inspection Service’s(USPIS) Criminal Investigations Group made announcement.
FHFA-OIG USPIS investigating case;
Trial Attorney Siji Moore Criminal Division Fraud Section Assistant US Attorney Martha Nye District NJ prosecuting case;
Anyone information concerning similar multifamily/commercial mortgage fraud can report contacting FHFA-OIG Hotline at eight-hundred-seven-nine-three-seventy-seven-twenty-four (800-793-7724) or via web www.fhfaoig.gov/ReportFraud#hotlineform