A sprawling mortgage fraud investigation has been working its way through a corner of American real estate with deep connections to the Ultra-Orthodox Jewish community.

The Real Deal spent months mapping the people and companies caught up in it. Its conclusion was striking: “A commercial mortgage fraud scandal is getting big and ugly.”

The publication estimated that the financial scale of suspected fraud “likely runs well into the billions,” although the exact amount remains unknown. Fannie Mae alone claimed roughly $700 million of exposure to eight sponsors it had blacklisted, according to an internal email obtained by the publication.

Federal investigators have already secured guilty pleas and prison sentences. Others remain under investigation or scrutiny and have not been charged with wrongdoing.

The Real Deal noted another common thread among the sprawling cast of borrowers, brokers, lawyers and title companies it examined: “Many have ties to each other and to heavily Orthodox Jewish communities in Lakewood, New Jersey; Brooklyn; and Monsey, New York.”

The schemes themselves were often surprisingly straightforward.

One method was to inflate a property’s financial performance, particularly its trailing 12-month financial statements, making the building appear more profitable and therefore capable of supporting a larger mortgage.

Another was even more audacious: create a second transaction.

The Real Deal calls it “the flip.” A property would be purchased at one price and then purportedly sold to another party at a substantially higher price. The second transaction could involve an affiliate or straw buyer and no genuine exchange of money. The higher fictional price was then presented to the lender to support a larger mortgage.

In one transaction, the deception became almost literal.

Moshe Silber, Fredrick Schulman and their co-conspirators acquired the Williamsburg of Cincinnati apartment complex for $70 million in March 2019. But that wasn’t the price presented to the lender and Fannie Mae.

Using a stolen identity and fraudulent documents, the conspirators presented a purchase contract for $95.85 million. The lender consequently funded a $74.25 million mortgage—more than the actual purchase price of the property.

And there weren’t merely two numbers on paper. There were two closings on the same day. The Justice Department says one closing reflected the true $70 million purchase price. The other reflected the fraudulent $95.85 million price presented to the lenders.

Silber ultimately pleaded guilty and received 30 months in prison. At sentencing, Judge Robert Kirsch described the conduct as involving layers of “chicanery and deceit.”

A second property followed a similar pattern.

Troy Technology Park in Michigan was actually acquired for $42.7 million. Aron Puretz and his co-conspirators submitted documents supporting an inflated $70 million purchase price, helping obtain a $45 million JPMorgan loan. Puretz ultimately received five years in prison and was ordered to pay more than $22 million in restitution.

Other cases involved different methods.

Jacob and Aron Deutsch pleaded guilty to fraud charges arising from a scheme involving Freddie Mac and HUD. According to prosecutors, false rent rolls and leases were supplied to lenders and appraisers, including leases identifying tenants who didn’t actually live in apartments or overstating rents. Vacant apartments were even staged with furniture to deceive inspectors into believing they were occupied.

The investigation has reached far beyond a handful of borrowers.

The Real Deal’s examination includes sponsors, brokers, brokerages, attorneys and title companies. Fannie Mae and Freddie Mac have blacklisted or restricted various individuals and businesses while the Federal Housing Finance Agency and other government agencies have investigated suspicious transactions. Some people identified by The Real Deal have not been charged with any crime, an important distinction in a scandal whose perimeter remains unsettled.

The investigation also raises uncomfortable questions about the institutions surrounding the borrowers.

Title companies had visibility into transactions. Brokers arranged financing. Lenders underwrote the loans. Attorneys prepared documents. The Real Deal notes that no lenders or underwriters had been indicted or accused of wrongdoing by federal agencies as of its investigation, while asking how much responsibility lenders have to ensure borrowers and transactions are legitimate.

Federal authorities have already been investigating for years. The prosecutions have involved the Justice Department’s Criminal Division and U.S. Attorney’s Office in New Jersey, with investigations by the Federal Housing Finance Agency’s inspector general, U.S. Postal Inspection Service and HUD inspector general. Fannie Mae and Freddie Mac have conducted their own reviews and imposed restrictions on industry participants.

There is another institution worth considering: the community itself.

The Real Deal did not identify these communities incidentally. Lakewood, Monsey and Brooklyn contain some of America’s largest and most intensely religious Orthodox Jewish populations. The people implicated in the scandal cannot be generalized to those communities, and many people appearing in the broader investigation have never been charged with wrongdoing.

Yet when a pattern becomes significant enough that a national real estate publication specifically identifies connections among participants and heavily Orthodox communities, it becomes reasonable for the community to ask what is happening in its midst.

One of the convicted participants ultimately asked that question of himself.

Before his sentencing in June 2025, Boruch Drillman apologized to his family, investigators and the financial institutions he had helped defraud. He had pleaded guilty to participating in a $165 million mortgage fraud conspiracy and ultimately received five years of probation after cooperating with investigators.

Then he addressed the contradiction between his conduct and the community and values with which he identified. “I tarnished the Jewish people, and I failed to live by my values that I claim to hold so dear.”

Federal prosecutors can investigate fraudulent closings. Fannie Mae can blacklist borrowers. Freddie Mac can restrict vendors. Judges can impose prison sentences and restitution.

But who is policing the values before the government has to police the people?