New Jersey real estate investor Aron Puretz pleaded guilty yesterday for his role in a $55 million mortgage fraud scheme to illegally acquire multifamily and commercial properties.
The Department of Justice alleges Puretz of Apex Equities was a co-conspirator with Brooklyn real estate investor Boruch Drillman in a mortgage fraud scheme involving an office complex in Tory, Michigan. As part of the scheme, Puretz and Drillman acquired the property, the Troy Technology Park, for $43 million, but sent the lender fake documents showing they purchased the property for $70 million. Riverside Abstract, a title insurer, performed both closings, the real closing and the fake closing.
To conceal the fraud, Puretz and his co-conspirators took on a $30 million bridge loan, to make it appear like they had the funds needed to close on the loan, according to the DOJ. Drillman already pleaded guilty in December.
The fraud scheme involving the Troy Technology Park is one of many that has come under the eye of the DOJ in the past year, in which property owners inflated financials or sales prices to obtain larger loans than they otherwise would have received.
The DOJ alleges Puretz defrauded at least three lenders along with Freddie Mac. The first instance of the alleged fraud occurred in February 2017. A multifamily property in Eureka, Illinois, was purchased for $4.1 million, but Puretz and his co-conspirators presented a fraudulent sales contract for $5.8 million to their lender and Freddie Mac.
A title insurer based in Lakewood, New Jersey performed two closings, one for the $4.1 million sales price and another for the $5.8 million.
The conspirators also allegedly set up a non-profit entity, JPC Charities, for the purpose of receiving tax-exempt status for the properties owned by Puretz. Puretz and co-conspirators provided false statements to the city of Eureka, Illinois, to receive a property tax exemption.
In July 2019, Puretz and his co-conspirators acquired a multifamily property in Little Rock, Arkansas by using the identity of an associate. Puretz hid his ownership with the property management company from the Department of Housing and Urban Development and other federal and state agencies.
Puretz pleaded guilty to one count of conspiracy to commit wire fraud affecting a financial institution. He is set to be sentenced in October and faces a maximum of five years in prison.
The Federal Housing Finance Agency Office of Inspector General and the U.S. Postal Inspection Service are investigating the case. Assistant U.S. Attorney Martha Nye for the District of New Jersey and Trial Attorney Siji Moore of the Criminal Division’s Fraud Section are prosecuting the case.