Three real estate investors pleaded guilty for their roles in a multi-year conspiracy to fraudulently obtain a $74 million loan and a $45 million loan and to 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 to one count of conspiracy to commit wire fraud affecting a financial institution.
Silber and Schulman were managing members of Rhodium Capital Advisors, an entity that was involved in the acquisition and management of the Ohio apartment complex Williamsburg of Cincinnati while Puretz was one of the owners of commercial property Troy Technology Park in Troy, Michigan. According to the charges brought against them, the trio conspired with others between 2018 and 2020 to deceive lenders into issuing a mortgage loan for a multifamily property and Fannie Mae into funding or purchasing the mortgage loan.
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 – but to achieve this purchase, 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 and other fraudulent documents.
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.
In September 2020, Troy Technology Park was acquired by Puretz and co-conspirators for $42.7 million. To support an inflated purchase price of $70 million, 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 – but to conceal the fraud, Puretz and his co-conspirators arranged for a short-term $30 million loan, which was used to make it appear that they had the funds needed to close on the sale. On Sept. 25, 2020, a title company based in Lakewood, New Jersey, performed two closings, one for the true $42.7 million sales price and another for the fraudulent $70 million sales price presented to the lender.
Silber, Schulman, and Puretz are scheduled to be sentenced on Dec. 3 and each face a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
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Seems like the amount of time spent in prison should correspond to the amount of money involved.
there are alot of buyer’s doing shady things in RE today. WE have had a few in our area. They tie up properties for months then don’t close.
These buyers should have to forfeit the earnest money they provided to the owner for holding up and possibly keeping the owner from selling to other buyers!
Something tells me that in the case of these transactions, the owner is in on this scheme
So now the whole industry is punish for their greediness and the buyers in our community are effect