A real estate investor has pleaded guilty to participating in a scheme to fraudulently obtain more than $229.6 million in loans and to acquire multifamily and commercial properties through deception.
Mordichai Weiss, 29, of Monsey, New York, pleaded guilty before U.S. district judge Robert Kirsch in Trenton federal court to information charging him with one count of wire fraud conspiracy.
According to documents filed in this case and statements made in court, between April 2022 and June 2023, Mr Weiss conspired with others to deceive lenders into issuing multifamily and commercial mortgage loans in amounts they otherwise would not have approved.
To carry out the scheme, Mr Weiss and his co-conspirators submitted falsified documents to lenders, including altered bank records and fraudulent settlement statements, to misrepresent the true purchase prices of the properties.
For example, in May 2023, Mr Weiss agreed to purchase an apartment complex in Houston, Texas, for approximately $66.9 million. Mr Weiss and his co-conspirators provided the lender with a fraudulent purchase agreement reflecting a price of $97.8 million.
That inflated figure was repeated across multiple falsified documents submitted in support of the loan. Relying on these misrepresentations, the lender approved and funded a loan of approximately $68.5 million, which Mr Weiss later defaulted on.
In total, Mr Weiss obtained approximately $229.6 million in loans from multiple financial institutions through this scheme.
Ultimately, he defaulted on the loans, or the loan balances substantially exceeded the value of the underlying collateral, resulting in approximately $94.4 million in losses to lenders, including the Federal National Mortgage Association, commonly known as Fannie Mae, and the Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac.
The sole count in the information carries a maximum penalty of 20 years’ imprisonment and a fine of up to $250,000, or twice the gross loss to the victim or gain to the defendant, whichever is greatest.
The sentencing date is not yet scheduled.