Jewish investors sentenced to prison for defrauding banks and investors of millions through inflated property values and falsified documents, exposing systemic issues within community’s business practices
Jpost
Four ultra-Orthodox real estate investors from New York and New Jersey have been sentenced to prison after their involvement in a real estate fraud scheme that defrauded banks and investors of tens of millions of dollars.
Aron Puretz, 53, of New Jersey, received a five-year prison sentence, and his son, Chaim ‘Eli’ Puretz, 29, was sentenced to two years. Aron Puretz was ordered to repay approximately $22.2 million, while his son Eli was directed to pay back about $20.3 million.
Two additional investors from New York, Moshe ‘Mark’ Silber, 34, and Fredrick Schulman, 72, were also sentenced. Silber received a two-and-a-half-year prison sentence, while Schulman was sentenced to one year and one day in prison, followed by nine months of home confinement.
The convicted individuals executed schemes involving inflated property valuations and falsified documents to secure large loans from banks. In a case from September 2020, Aron and Eli Puretz purchased the Troy Technology Park in Troy, Michigan, for about $42.7 million but falsely presented its value as approximately $70 million, obtaining a $45 million bank loan. They disguised their fraud by using a short-term $30 million loan to falsely portray financial strength, executing two simultaneous closings—one reflecting the actual sale and another falsified transaction to mislead lenders.
In a separate scheme, Silber and Schulman inflated the purchase price of the Williamsburg of Cincinnati apartment complex in Ohio from $70 million to over $95 million in March 2019. They used stolen identities and falsified documentation to deceive lenders and secure a loan exceeding $74 million. Again, dual closings were conducted to mask the true nature of the deal.
Chaim ‘Eli’ Puretz later spoke publicly about the fraud and described the rush of his first major real estate deal as feeling ‘like a drug’. ‘You are tasting money and tasting real estate transaction at a very fast pace,’ he said. Puretz admitted that he had no equity in the deal and was encouraged by others with more experience. ‘My first real estate transaction, which was pretty large for someone my age, I committed something that was black and white bank fraud.’
He described how young men from his community, coming out of yeshiva, often seek rapid success in real estate or nursing homes, pointing to conversations with peers about community members who quickly accumulated dozens of properties. ‘Your judgment was clouded by the fact that everyone around you was making big moves… there must be something that’s easy here.’
Puretz also acknowledged a lack of positive mentorship in his circle, saying many of the people he looked up to were ‘wheelers and dealers’ who encouraged bending legal and ethical lines. ‘Most of us are dealing with people that are just okay bending truths and bending legality… and from light gray to dark gray goes very fast.’