Three New Jersey residents have been indicted for their involvement in a multimillion-dollar mortgage fraud scheme, with two of the defendants also facing charges for fraudulently obtaining approximately $3 million in federal Economic Injury Disaster Loans (EIDLs).
Arthur Spitzer, 37, of Toms River, Mendel Deutsch, 38, of Toms River, and Joshua Feldberger, 42, of Howell, were arraigned today before U.S. District Judge Edward S. Kiel in Camden federal court.
The charges against the defendants, announced by U.S. Attorney Philip R. Sellinger, include multiple counts of wire fraud, bank fraud, conspiracy to commit fraud, aggravated identity theft, making false statements to financial institutions, and money laundering.
According to the indictment, Spitzer orchestrated a scheme in 2019 and 2020 to defraud property owners and mortgage lenders by obtaining loans for real estate properties that he did not own.
Spitzer who is registered to vote in Ocean County, and affiliated with the Republican Party, allegedly identified properties in New Jersey and Brooklyn, New York, that either had no mortgages or mortgages significantly below the market value of the properties.
Using fraudulent documents with forged signatures, Spitzer misrepresented his authority to obtain mortgage loans secured by these properties.
The loan proceeds were then disbursed to accounts controlled by Spitzer or used to benefit him personally, such as paying off debts. These loans subsequently defaulted, leaving the true property owners facing foreclosure and eviction.
In June 2020, Spitzer, in collaboration with Deutsch and Feldberger, allegedly engaged in a scheme to make it appear as if Spitzer owned three properties in Brooklyn, which Deutsch then purportedly agreed to purchase.
Deutsch obtained a $4 million mortgage loan in connection with this transaction, facilitated by Feldberger, who owned the settlement company handling the deal, is registered to vote in Monmouth County, and has no political party affiliation.
The indictment alleges that the defendants created and sent fraudulent letters, forged documentation, and misrepresented the receipt of funds to the mortgage lender, ultimately leading to the release of the loan funds.
The proceeds were then used to fund Deutsch’s down payment, which had supposedly been provided earlier.
In 2020 and 2021, Spitzer and Deutsch are also accused of fraudulently obtaining millions of dollars in federal loans intended to assist small businesses impacted by the COVID-19 pandemic.
The loans, authorized under the CARES Act, were meant to provide economic relief to businesses experiencing substantial financial disruption.
According to the indictment, Spitzer and Deutsch submitted loan applications with false information regarding the number of employees, revenues, and other financial details of the applicant businesses, many of which had little to no operations.
The charges of bank fraud conspiracy, bank fraud, and making false statements to financial institutions each carry a maximum sentence of 30 years in prison and a $1 million fine.
The wire fraud conspiracy and wire fraud charges each carry a maximum penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Money laundering charges are punishable by up to 10 years in prison and a $250,000 fine, or twice the gross gain or loss. The aggravated identity theft charges carry a mandatory two-year prison sentence.
Sellinger credited the investigation to special agents from the FBI’s Atlantic City Resident Agency, IRS Criminal Investigation, and the Federal Deposit Insurance Corporation’s Office of Inspector General. The government is being represented by Assistant U.S. Attorney Daniel A. Friedman of the U.S. Attorney’s Office’s Criminal Division in Camden.
The charges and allegations contained in the indictment are accusations, and the defendants are presumed innocent unless and until proven guilty.
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