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July 13, 2022

Hartford real estate manager pleads guilty in $50M mortgage fraud scheme

Contributed | Pixabay

A real estate portfolio manager has pleaded guilty to charges related to mortgage fraud after he doctored financial statements and misrepresented apartment occupancy rates to secure nearly $50 million in loans, according to federal authorities.

Jacob Deutsch, 57, of Brooklyn, N.Y., admitted to participating in an elaborate plot to defraud several financial institutions, including government-sponsored Freddie Mac and Fannie Mae, and the U.S. Department of Housing and Urban Development, authorities said.

He and his cousin, Aron Deutsch, provided the institutions with information overstating the value of multifamily properties to obtain loans that they otherwise would not have received, according to authorities.

The Deutsches were working at BH Property Management, a company that manages numerous multifamily housing properties in Hartford, during the scheme, which occurred from September 2016 through May 2021, according to court documents.

The principal of BH Property Management, Abraham Deutsch, is Jacob Deutsch's brother.

Jacob Deutsch on Tuesday waived his right to be indicted and pleaded guilty before U.S. District Judge Omar A. Williams in Hartford to one count of conspiracy to commit mail fraud and wire fraud affecting a financial institution. He has been released on a $50,000 bond and faces up to 30 years in prison when he is sentenced.

Aron Deutsch, 61, of Monsey, N.Y., pleaded guilty to the same charge on June 1. He was released on a $100,000 bond pending sentencing, which is scheduled for Nov. 3.

According to authorities, Jacob Deutsch provided false rent rolls, listing fictitious renters, or falsely inflated the amount of rent paid by tenants. They say he deceived inspectors by staging unoccupied apartments with furniture to make it appear the units were occupied.

Further, Jacob Deutsch required BH Property Management employees to lie to inspectors if asked whether there were vacancies, authorities say.  

In one instance, a rent roll and income and expense summary submitted by Jacob Deutsch to CBRE Capital Markets in June 2018 misrepresented that an apartment building at 16 Evergreen Ave. was “100% occupied” when it was empty, according to the complaint.

Jacob and Aron Deutsch were arrested on May 19, 2021.

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