Two New York men were charged in federal court yesterday for a mortgage scheme involving two Hartford apartment buildings.
Jacob Deutsch, 56, of Brooklyn, New York, and Aron Deutsch, 60, of Monsey, New York, were each charged with conspiracy to commit mail and wire fraud, wire fraud, mail fraud and making false statements, according to a statement from the U.S. attorney’s office.
According to the statement, Jacob and Aron Deutsch work at BH Property Management LLC, a property management company that manages several multifamily housing properties in Hartford. Jacob Deutsch has been responsible for the day-to-day operations of BH Property Management, and Aron Deutsch has coordinated maintenance and construction activities for the housing properties managed by BH Property Management.
Through an entity known as 16 53 Evergreen Avenue LLC, the statement said, the Deutsches and others purchased two Hartford properties in April 2017: 16 Evergreen Avenue, a 24-unit housing property, and 53 Evergreen Avenue, a 12-unit housing property. They paid a total of approximately $1.8 million for the properties.
Prosecutors allege that the Deutsches defrauded both the mortgage origination and servicing company, CBRE Capital Markets Inc., and Freddie Mac when applying for and ultimately acquiring a mortgage loan for Evergreen LLC to refinance the purchase of the two Hartford properties.
The loan application documents contained numerous misrepresentations about 16 Evergreen Avenue’s occupancy rate and net operating income, according to the U.S. attorney’s office. A rent roll and income and expense summary submitted by Jacob Deutsch in June 2018 allegedly represented that 16 Evergreen Avenue was 100 percent occupied even though no tenants resided there at the time.
Based on these misrepresentations, CBRE underwrote a Freddie Mac Small Balance Loan in August 2018 for $2,178,000 secured by 16 Evergreen Avenue and 53 Evergreen Avenue, according to the statement, and then immediately sold that loan to Freddie Mac at closing.
Jacob Deutsch was released on a $50,000 bond and Aron Deutsch was released on a $100,000 bond.