Fourteen defendants have been indicted on charges in connection with a massive mortgage fraud conspiracy that was perpetrated in New York for 10 years, according to an announcement made by Preet Bharara, U.S. Attorney for the Southern District of New York, and George Venizelos, assistant director in charge of the New York Field Office of the FBI, and Carl DuBois, Sheriff of Orange County, New York.
In all, 15 defendants were charged, with 14 of them being indicted on charges of conspiracy to commit bank fraud and wire fraud in connection with mortgage and other loans in Manhattan, Brooklyn, and Monroe, located in Orange County, New York. In all, the indictment charges various defendants with additional crimes totaling 21 counts that include making false statements to lenders, aggravated identity theft, and theft of public money. Many of the defendants are related members of a family, the Rubins.
The indictment charges that the defendants fraudulently obtained 20 loans totaling more than $20 million in loan proceeds by providing lenders with materially false information regarding the defendants' assets, liabilities, employment, income, bank accounts, and primary residence, among other false information. The indictment states the defendants used this money to enrich themselves and their families, and the majority of the loan proceeds went into default. The defendants then engaged in various illegal activities to conceal the fraud, which included having different members of the scheme act as borrowers, claiming they needed loan proceeds to refinance their primary residence when in fact the property in question was not their primary residence, according to the indictment.
While the defendants were claiming to banks they had substantial income in order to obtain millions of dollars in loan proceeds, they were claiming to state and local agencies that they had little or no assets in order to receive public assistance in the form of Medicaid, Food Stamps, and benefits from the Home Energy Assistance Program.
"The charges unsealed today describe a sweeping and cynical fraud. As alleged, the scheme carried out by the Rubins and others ripped off banks, welfare programs, and taxpayers," Bharara said. "It ranged from 2004 to 2014, from Brooklyn to Harlem to Orange County, and the individuals involved alternately played the parts of prince or pauper, depending on which scam was being perpetrated. Now their alleged double dealing will be stopped, and they will have to submit to the truth-seeking process of the criminal justice system."
A real estate attorney and a real estate appraiser also included among the defendants in addition to the members of the Rubin family. Defendant Martin Kofman acted as a real estate attorney on many of the transactions in which the defendants fraudulently obtained the loans, then distributed the fraudulent loan proceeds among perpetrators of the conspiracy, according to the indictment. Real estate appraiser Pinchus Glauber was alleged to have completed multiple appraisals connected to the fraudulent loans and is accused of falsifying information in his appraisals, the indictment said.
"In a clear case of double dipping, the defendants convinced lenders of their affluence while allegedly accepting aid from government programs established for the benefit of those less fortunate, profiting from the proceeds of millions of dollars in fraudulently obtained loans and significantly defrauding the government of public money," Venizelos said. "May today’s charges remind those who poke holes in the government safety net and exploit gaps in the mortgage and banking sectors that they will face the error of their ways."