Howell Man Charged In Multimillion Mortgage Scheme That Took Loans On Others' Properties

eCAMDEN, NJ — Two Toms River men and a Howell man have been indicted in a multimillion-dollar mortgage fraud scheme and two of them were indicted on charges of fraudulently getting $3 million from COVID-19 economic relief program, the U.S. Attorney's office announced.

Arthur Spitzer, 37, and Mendel Deutsch, 38, both of Toms River, and Joshua Feldberger, 42, of Howell, were indicted Tuesday, U.S. Attorney Philip R. Sellinger announced. They were arraigned before U.S. District Judge Edward S. Kiel in Camden federal court.

Authorities allege Spitzer orchestrated a scheme in 2019 and 2020 to defraud property owners and mortgage lenders by obtaining mortgage loans for real estate properties that he did not own.

As part of the scheme, Spitzer identified properties that had either no mortgages or mortgages well below the property’s market value, then obtained mortgage loans secured by those properties and forged documents to make it appear control of the properties had been transferred to him, according to the indictment.

The loan proceeds were disbursed to bank accounts controlled by Spitzer or were used to otherwise benefit Spitzer, such as to pay off his debts, and then he allowed the loans to default by not making the required payments, leaving the true property owners subject to foreclosure and eviction, authorities allege.

Spitzer did this six times, authorities allege.

According to the indictment, Deutsch and Feldberger got involved with Spitzer's scheme in June 2020. In this case, they made it appear Spitzer owned three properties in Brooklyn and agreed to sell them to Deutsch, who obtained a $4 million mortgage loan in connection with the transaction. Authorities allege Feldberger facilitated the fraudulent transaction as the owner of the settlement company that handled the transaction.

The three men are accused of creating and sending letters stating Deutsch had deposited significant funds into escrow toward the transaction, when in reality he had not; they created fake documentation purportedly transferring control of the properties to Spitzer; they failed to disclose a short-term loan obtained shortly before the transaction’s closing; and they lied to the mortgage lender by stating that the settlement company had received more than $2 million from Deutsch at closing, which led the mortgage lender to fund the loan, according to the indictment.

The defendants then used the mortgage loan proceeds to fund Deutsch’s down payment, which he had supposedly already provided, authorities allege.

In addition to the mortgage fraud charges, authorities allege Spitzer and Deutsch each fraudulently obtained millions of dollars of government loans that were intended for small businesses distressed by the COVID-19 pandemic.

The Economic Injury Disaster Loans of up to $2 million were available to eligible small businesses; to get one, a qualifying small business was required to apply and provide information on its operations, including the number of employees and revenues or expenses.

Spitzer and Deutsch are accused of lying on applications for EIDL loans, including lying about the companies’ number of employees, revenues, cost of goods sold, or lost rents, to get the loans for businesses that had little or no operations, according to authorities.

Spitzer is charged with eight counts of wire fraud, one count of bank fraud, one count of bank and wire fraud conspiracy, two counts of aggravated identity theft, one count of making a false statement to a financial institution, and 12 counts of money laundering.

Deutsch is charged with three counts of wire fraud, one count of bank fraud, one count of bank and wire fraud conspiracy, one count of aggravated identity theft, one count of making a false statement to a financial institution, and two counts of money laundering.

Feldberger is charged with one count of wire fraud, one count of bank fraud, one count of bank and wire fraud conspiracy, one count of aggravated identity theft, and one count of making a false statement to a financial institution.

Authorities said the counts of bank fraud conspiracy, bank fraud, and making a false statement to a financial institution are each punishable by up to 30 years in prison and a $1 million fine. The counts of wire fraud conspiracy and wire fraud are each punishable by up to 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The counts of money laundering are each punishable by up to 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The counts of aggravated identity theft carry a mandatory two-year prison sentence.