Two New York Mortgage Fraudsters Plead Guilty To Running A Mortgage Fraud Scheme In Connecticut
Two New York Mortgage Fraudsters pleaded guilty Tuesday for operating a wide-ranging mortgage fraud scheme.
The scheme involved 24 mortgage loans on numerous multifamily housing properties in Hartford, Connecticut.
The duo scammed nearly $50 million from different lenders.
Jacob Deutsch waived his right to be indicted. Consequently, he pleaded guilty according to federal prosecutors.
The company that managed numerous multifamily housing properties in Hartford.
Jacob Deutsch ran the day-to-day operations at BHPM. Aron Deutsch coordinated maintenance and construction activities for the housing properties managed by BHPM.
Court documents show both men engaged in a scheme to defraud several financial institutions. They provided lenders with false information by overstating the value of multifamily housing properties managed by BHPM. The institutions include Freddie Mac and Fannie Mae.
What The Two New York Mortgage Fraudsters Did
Jacob Deutsch also provided false rent rolls and falsified leases to lenders and their appraisers. Thus, these documents either overstated the number of renters by listing fictitious names or others not actually living there. He also falsely inflated the amount of rent paid by occupants.
Deutsch also deceived inspectors into believing that unoccupied apartments were occupied by staging the apartments with furniture. He also required BHPM employees to falsely tell inspectors they lived there. In addition, he had them lie to inspectors if asked whether there were vacancies.
Jacob Deutsch also gave lenders inflated income statements and financials for the properties using doctored bank statements.
As a result, the false information allowed Freddie Mac and Fannie Mae to purchase the loans from the lenders, The loans induced HUD to issue a mortgage insurance commitment to the lender.
Federal authorities arrested Jacob and Aron Deutsch on a criminal complaint on May 19, 2021. Jacob Deutsch pleaded guilty Tuesday to one count of conspiracy to commit mail fraud and wire fraud affecting a financial institution, an offense that carries a maximum sentence of 30 years. The court released him in lieu of $50,000 bond pending sentencing. The court has not set a date for sentencing hearing.
Aron Deutsch, 61, of Monsey, N.Y., pleaded guilty to the same charge on June 1, 2022. The court released him in lieu of $100,000 bond pending sentencing, The court set that hearing for November 3, 2022.