A real estate investor pleaded guilty to orchestrating a plot to defraud lenders out of more than $54.7 million in Michigan and several other states.
Court documents revealed that Aron Puretz, 53, of New Jersey, meticulously conspired with others over a six-year period to deceive lenders into issuing multifamily and commercial mortgage loans between 2016 and 2022.
Recommended Videos
Puretz and his co-conspirators provided the lenders with fictitious documents, including purchase contracts with inflated purchase prices, fake financial statements, and other fraudulent documents.
The 53-year-old man was an employee of Apex Equity Group, a real estate investment and advisory firm, and one of the owners of Maple Lawn in Eureka, Illinois, and Big Country Chateau in Little Rock, Arkansas, both multifamily properties and Troy Technology Park in Troy, Michigan, a commercial property.
In February 2017, Maple Lawn, a property at the heart of the community, was acquired for $4.1 million. However, Puretz and his co-conspirators from Apex Equity Group utilized the identity of a co-conspirator to present a lender and Freddie Mac with a purchase and sale contract for $5.8 million and other fraudulent documents.
On Feb. 17, 2017, a title and settlement company based in Lakewood, New Jersey, performed two closings, one for the true $4.1 million sales price and another for the fraudulent $5.8 million sales price presented to the lender.
Furthermore, part of the conspiracy was to create a nonprofit entity, JPC Charities, to receive tax-exempt status for the properties owned by Puretz and co-conspirators.
Puretz and co-conspirators provided false statements to the city of Eureka, Illinois, to receive a property tax exception, further impacting the community.
Court documents reveal that Puretz and his co-conspirators acquired Big Country Chateau in July 2019.
However, Puretz knew the lender and Freddie Mac would disapprove of him as an owner, and he used the identity of an associate instead of his own.
Furthermore, Puretz hid his ownership and involvement with the property management company from the Department of Housing and Urban Development and other federal and state agencies.
Troy Technology Park was acquired for $42.7 million in September 2020. However, Puretz and his co-conspirators presented the lender with a fraudulent purchase and sale contract for $70 million.
Additionally, to support the inflated purchase price, Puretz and his co-conspirators submitted to the lender and appraiser a fraudulent letter of intent to purchase the property from another party for $68 million and other fraudulent documents.
To conceal the fraudulent nature of the transaction, Puretz and his co-conspirators arranged for a short-term $30 million loan, which was used to make it appear that they had the funds needed to close on the loan.
On Sept. 25, 2020, a title and settlement company based in Lakewood, New Jersey, performed two closings, one for the actual $42.7 million sales price and another for the fraudulent $70 million sales price presented to the lender.
The 53-year-old man pleaded guilty to one count of conspiracy to commit wire fraud affecting a financial institution.
Puretz is scheduled to be sentenced on Oct. 30 and faces a maximum penalty of five years.
A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.