$119M Fraud Scheme Unravels: Three Investors Confess to Elaborate Mortgage Manipulation

Three real estate developers from the New York and New Jersey area have admitted to their involvement in an expansive mortgage fraud operation, with losses exceeding $119 million. The case, which concluded in the District of New Jersey this week, reveals a sophisticated scheme involving inflated property valuations and falsified documentation to deceive major lenders.

The Orchestrated Deception

The three individuals at the center of the fraud—Mark Silber, Fredrick Schulman, and Chaim Puretz—executed a coordinated strategy to artificially inflate real estate acquisition prices. Between 2018 and 2020, Silber and Schulman, operating through Rhodium Capital Advisors, engineered fraudulent transactions targeting commercial lending institutions.

Their first major operation involved the Williamsburg of Cincinnati, an apartment complex in Ohio. Court records reveal that in March 2019, the property changed hands with two simultaneous closing events: one reflecting the legitimate $70 million purchase price, and another presenting a fabricated $95.85 million valuation to external lenders. Leveraging this false documentation, the conspirators secured $74.25 million in financing, with Fannie Mae among the compromised institutions.

Pattern and Repetition

The criminal methodology proved consistent when applied to a second target. Puretz and associated conspirators acquired Troy Technology Park in Michigan in September 2020 for $42.7 million but presented fraudulent acquisition documents claiming a $70 million purchase. Through manipulated correspondence and false appraisals submitted to lenders, they obtained $45 million in additional fraudulent loans.

Legal Consequences

All three defendants face up to five years incarceration per count. Sentencing is scheduled for December 3, marking the formal conclusion of their admission of guilt before the federal judiciary.