Hasidic family charged in $20 million fraud case

Julie Wiener

NEW YORK (JTA) — Fifteen members of a prominent Satmar Hasidic family in New York have been charged with lying to obtain $20 million in mortgages while also receiving hundreds of thousands of dollars in public benefits.

Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the assistant director of the New York field office of the FBI announced the indictment Thursday, which charges 14 defendants with conspiracy to commit bank fraud related to mortgages on properties in three counties, two in New York City.

The indictment also charges several of the defendants with additional crimes, including making false statements to lenders, aggravated identity theft and theft of public money. Thirteen of the defendants were arrested Thursday and will be arraigned before United States Magistrate Judge Paul E. Davison in the White Plains, N.Y. federal courthouse.

The defendants include real estate developer Irving Rubin, as well as his brothers, sons, wife and various in-laws. A real estate lawyer and real estate appraiser are also charged in the case.

“As alleged, the scheme carried out by the Rubins and others ripped off banks, welfare programs, and taxpayers,” Bharara said in a news release. “It ranged from 2004 to 2014, from Brooklyn to Harlem to Orange County, and the individuals involved alternately played the parts of prince or pauper, depending on which scam was being perpetrated. Now their alleged double dealing will be stopped, and they will have to submit to the truth-seeking process of the criminal justice system.”

The defendants are accused of fraudulently obtaining more than $20 million in loan proceeds in connection with more than 20 fraudulent loans. The majority of the loans went into default and were not repaid.

According to the indictment, the family used the money for personal expenses, concealing the fraud and funding other real estate projects. At the same time that the defendants were representing to banks that they had substantial income and assets, they were also representing to state and local agencies that they had little or no income and assets and were entitled to receive various forms of public assistance, including Medicaid, Food Stamps and Home Energy Assistance Program (“HEAP”) benefits, the indictment alleges.