Two employees of a Hartford-based property management firm have pleaded guilty in a wide-ranging mortgage fraud scheme that involved 24 loans totaling nearly $50 million on multifamily housing properties.

Jacob Deutsch, 57, of Brooklyn, New York, waived his right to be indicted and pleaded guilty yesterday to one count of conspiracy to commit mail fraud and wire fraud affecting a financial institution, according to a statement from the U.S. attorney’s office.

Aron Deutsch, 61, of Monsey, New York, had pleaded guilty to the same charge on June 1. The two men had been arrested on a criminal complaint in May 2021.

According to court documents and statements in court proceedings, Jacob Deutsch and Aron Deutsch work at BH Property Management LLC, which manages multifamily housing properties in Hartford.

Jacob Deutsch, who ran the day-to-day operations at BH Property Management, and Aron Deutsch engaged in a scheme from September 2016 through May 2021 to defraud several financial institutions, Freddie Mac and Fannie Mae, and the U.S. Department of Housing and Urban Development, according to the U.S. attorney’s statement. The scheme involved providing false information that overstated the value of multifamily housing properties managed by BH Property Management in connection with loans secured by those properties.

As part of the scheme, Jacob Deutsch provided false rent rolls and leases to financial institutions and their appraisers. The information overstated the number of renters by listing fictitious renters or others not actually living there, according to the statement, or falsely inflated the amount of rent paid by occupants.

Prosecutors say Jacob Deutsch deceived inspectors into believing that unoccupied apartments were occupied by putting furniture in the apartments, requiring BH Property Management employees to falsely tell inspectors that they lived there, and requiring employees to lie to inspectors if asked whether there were vacancies.

In one case, a rent roll and income and expense summary that Jacob Deutsch submitted to CBRE Capital Markets Inc. in June 2018 falsely represented that 16 Evergreen Ave. was 100 percent occupied even though no tenants lived there at the time, the statement said. Jacob Deutsch later showed proof of rent payment by emailing CBRE pictures of money orders and checks purporting to reflect rent payments from tenants on the falsified rent rolls for 16 Evergreen Ave., according to the statement, but the money orders and checks had been purchased by Aron Deutsch or BH Property Management employees at Aron Deutsch’s direction.

Jacob Deutsch also provided financial institutions with false and inflated income statements and financials for the properties, doctored bank statements, doctored or falsified documents overstating the purchase price of various multifamily housing properties, and doctored checks and invoices showing false or overstated capital improvements made to those properties, according to the statement.

Based on this false information, financial institutions issued loans that they otherwise would not have issued on the requested terms or issued loans for amounts larger than they would have authorized had they been provided with accurate information. The false information also affected Freddie Mac and Fannie Mae, which purchased the resulting loans from the financial institutions. HUD, based on the false information, issued a mortgage insurance commitment to a financial institution.

Jacob Deutsch is released on a $50,000 bond pending sentencing, which has not been scheduled, and Aron Deutsch is released on a $100,000 bond and is scheduled for sentencing on Nov. 3.