How Real Estate Investor Orchestrated a $54.7M Fraud Scheme in Michigan and Beyond

How Real Estate Investor Orchestrated a $54.7M Fraud Scheme in Michigan and Beyond

How Real Estate Investor Orchestrated a $54.7M Fraud Scheme in Michigan and Beyond 900 506 Ines

A New Jersey real estate investor, Aron Puretz, has pleaded guilty to orchestrating a scheme to defraud lenders out of over $54.7 million across multiple states, including Michigan. The fraudulent activities, which spanned from 2016 to 2022, involved the meticulous manipulation of documents and financial statements to secure multifamily and commercial mortgage loans.

Key Details of the Fraudulent Scheme

1. The Mastermind and Co-Conspirators: Aron Puretz, 53, an employee of Apex Equity Group and part-owner of several properties, collaborated with others to deceive lenders. They used falsified documents, such as inflated purchase contracts and fake financial statements, to secure loans.

2. Notable Properties Involved:

  • Maple Lawn, Eureka, Illinois: Acquired for $4.1 million in February 2017. Puretz and his associates presented a fraudulent contract for $5.8 million to the lender and Freddie Mac.
  • Big Country Chateau, Little Rock, Arkansas: Acquired in July 2019. Puretz used an associate’s identity to hide his involvement from the lender and federal agencies.
  • Troy Technology Park, Troy, Michigan: Acquired for $42.7 million in September 2020. A fraudulent contract for $70 million was presented to the lender, supported by fictitious documents, including a fake letter of intent to purchase the property for $68 million.

3. Fraudulent Transactions and Tactics: The conspirators orchestrated dual closings for transactions, one reflecting the true sale price and another inflated price. For example, a title company in Lakewood, New Jersey, conducted closings for the actual $4.1 million and the fraudulent $5.8 million prices for Maple Lawn.

4. Creation of Fictitious Entities: Part of the scheme involved creating a nonprofit entity, JPC Charities, to obtain tax-exempt status for the properties, further deceiving authorities and reducing tax liabilities.

5. Concealment of Ownership: Puretz concealed his ownership and involvement in property management from various federal and state agencies, including the Department of Housing and Urban Development.

6. Legal Proceedings: Puretz pleaded guilty to one count of conspiracy to commit wire fraud affecting a financial institution. He faces up to five years in prison, with sentencing scheduled for October 30. A federal district court judge will determine his sentence, considering the U.S. Sentencing Guidelines and other statutory factors.

Conclusion: Aron Puretz’s case highlights the extensive measures taken by some real estate investors to manipulate the system and secure fraudulent loans. This elaborate scheme underscores the importance of stringent due diligence and regulatory oversight in the real estate and financial sectors.

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