A trio of real estate investors recently found themselves in hot water as they pleaded guilty to crimes related to a massive mortgage fraud conspiracy. The individuals involved in this scheme were Fredrick Schulman and Moshe “Mark” Silber from New York, along with Chaim “Eli” Puretz from New Jersey. The trio’s fraudulent activities spanned multiple years and involved obtaining loans worth tens of millions of dollars to acquire multi-family properties.
According to documents released by the U.S Department of Justice Office of Public Affairs, the trio’s fraudulent activities began in 2018 and continued through 2020. Schulman and Silber, who were managing members of Rhodium Capital Advisors, a real estate developer in New York, were involved in the acquisition and management of Williamsburg of Cincinnati, an apartment complex in Ohio. Puretz, on the other hand, was one of the owners of Troy Technology Park in Michigan.
The trio, along with their co-conspirators, deceived lenders and Fannie Mae by providing falsified documents, including inflated purchase prices and other fraudulent information. For example, in March 2019, Schulman and Silber presented a lender and Fannie Mae with a purchase and sale contract for Williamsburg of Cincinnati for $95.85 million, even though the property was acquired for $70 million. Similarly, in September 2020, Puretz and his co-conspirators acquired Troy Technology Park for $42.7 million but submitted fraudulent documents to obtain a $45 million loan.
In total, the trio fraudulently obtained $119 million through their illegal activities. Schulman and Puretz each pleaded guilty to one count of conspiracy to commit wire fraud affecting a financial institution, while Silber had previously pleaded guilty to the same charge in July. The three men are scheduled to be sentenced on December 3 and face a maximum penalty of five years in prison.
The case highlights the lengths to which individuals will go to commit mortgage fraud and deceive lenders for personal gain. It serves as a cautionary tale for those involved in the real estate industry and underscores the importance of transparency and honesty in all financial transactions. As the trio awaits their sentencing, the repercussions of their actions will likely have far-reaching consequences for their futures and reputations in the industry.