A New Jersey real estate investor was sentenced to five years in prison and ordered to pay $22 million in restitution for his role in a $54.7 million multi-year mortgage fraud scheme.
Aron Puretz was an employee of Apex Equity Group, a real estate investment and advisory firm. According to the charges brought against him, Puretz conspired with others to deceive lenders into issuing multifamily and commercial mortgage loans between 2016 and 2022. This chicanery included the creation of fictitious documents – including purchase contracts with inflated purchase prices and fake financial statements – that were submitted to lenders.
The fraudsters acquired the Eureka, Illinois-based multifamily property Maple Lawn for $4.1 million in February 2017, but Puretz and his co-conspirators from Apex Equity Group utilized the identity of a co-conspirator to present a lender and Freddie Mac with a purchase and sale contract for $5.8 million, along with other fraudulent documents. As a result of that fraud, a title and settlement company performed two closings on the property – one for the true $4.1 million sales price and another for the fraudulent $5.8 million sales price presented to the lender.
Furthermore, part of the conspiracy was to create a nonprofit entity, JPC Charities, for the purpose of receiving tax-exempt status for the properties owned by Puretz and co-conspirators – these individuals provided false statements to the city of Eureka, Illinois, to receive a property tax exception.
In July 2019, Puretz and his co-conspirators acquired another multifamily property, Big Country Chateau in Little Rock, Arkansas. However, Puretz knew the lender and Freddie Mac would not approve him as an owner and used the identity of an associate instead of his own. Furthermore, Puretz hid his ownership and involvement with the property management company from the Department of Housing and Urban Development and other federal and state agencies.
In September 2020, the fraudsters acquired Troy Technology Park, a Troy, Michigan-based commercial property, acquired for $42.7 million. Puretz and his co-conspirators presented the lender with a fraudulent purchase and sale contract for $70 million – and to support the inflated purchase price, the fraudsters provided the lender and appraiser with a fake letter of intent to purchase the property from another party for $68 million, along with other fraudulent documents. To conceal the fraudulent nature of the transaction, 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 loan. Once again, the title and settlement company 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.
In June, Puretz pleaded guilty to one count of conspiracy to commit wire fraud affecting a financial institution.
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