Mortgage, welfare fraud bust in Brooklyn, Orange and Rockland county Orthodox communities
WHITE PLAINS (WABC) -- Police arrested more than a dozen people Thursday morning in connection with alleged mortgage and welfare fraud operating withing Orthodox Jewish communities.
Thirteen members of two extended families were taken into custody, accused of securing 20 mortgage loans totaling $20 million for properties. They are accused of vastly overstating their incomes and the amount of money in their bank accounts to obtain the loans, which then went into default.
The alleged ringleader, Irving Rubin, called himself a real estate developer. Also arrested were his sons, Yehuda and Joel Rubin, and Irving Rubin's brothers Abraham, Jacob and Samuel Rubin, and his wife Desiree.
"They alternately played the part of prince or pauper depending on which scam was being perpetrated," U.S. Attorney Preet Bharara said at a news conference in the White Plains courthouse. "Regardless of whether they were posing as rich men or poor men, they were always con men."
Authorities say Yehuda Rubin personally took part in at least 10 of the deceptive loans, acting as either a borrower, a borrower's power of attorney, a mortgage broker or the distributor of the loan proceeds.
According to the complaint, Yehuda Rubin and his wife, Rachel, also qualified for Medicaid and food stamps by saying their only income was a few hundred dollars a month. To get $1 million in loans, he listed his income from work and rents as $17,000 per month and she claimed $14,000 per month.
Joel Rubin and his wife, Rivky, reportedly received Medicaid and food stamps by telling government agencies that they were homeless or earned income that totaled about $130 or $180 per week. They also received loans totaling $1 million by claiming her job earned her $12,000 per month.
Bharara said the overall deception was so widespread that prosecutors still do not know exactly what properties the defendants own or how wealthy they are.
"It's hard to find any examples of when they told the truth," he said. But the government is asking the court to order forfeiture of 23 properties and several bank accounts.
Others arrested include real estate lawyer Martin Kofman, who allegedly "distributed fraudulent loan proceeds between and among members of the conspiracy" and provided false information to lenders.
Appraiser Pinchus Glauber is accused of inflating the value of properties held by the defendants to help them qualify for the loans.
Two others are expected to surrender, bringing the total facing charges to 15.
The raids took place across Brooklyn and in Monsey and Kiryas Joel.
