Another Boruch Drillman co-conspirator pleads guilty in mortgage fraud scheme

Boruch Drillman’s co-conspirator Mark Silber pleaded guilty for his role in a mortgage fraud scheme involving a Cincinnati apartment building.

The Department of Justice alleges Silber teamed up with business partner Frederick Schulman to buy the Williamsburg of Cincinnati for $70 million by using a stolen identity. The investors then flipped the property to Drillman for $96 million, and their lender provided a $74 million loan based on that higher price. 

Silber and his co-conspirators duped both their lender and Fannie Mae, which often buys private loans, the Justice Department says.

Lakewood, New Jersey-based Madison Title provided the closings for both transactions.

Silber of Suffern, New York, pleaded guilty to one charge of conspiracy to commit wire fraud affecting a financial institution. Silber could go to prison for up to five years. His sentencing hearing is set for November, according to court filings.

Silber’s attorney Richard Weber declined to comment. 

Silber was a managing partner of Rhodium Capital Advisors, a New York-based real estate investment firm focusing on affordable housing. In 2022, Silber also formed a firm to buy the parent company of Sunnyside Federal Savings and Loan, a community bank in Irvington, New York. 

Drillman pleaded guilty for his role in the Cincinnati transaction and another fraudulent mortgage deal in Michigan in December. Schulman has not yet been charged.

Court filings shed new light on how Silber and his co-conspirators orchestrated the scheme to hide the initial lower sales price from their lender. 

After Silber and Schulman used a stolen identity to purchase the property, a lawyer sent an email to Silber and an employee of Madison Title in February 2019. The email read: “Attached title commitment has purchase price as TBD. Please confirm that I may send this to the purchaser’s counsel.”

Later that day, Silber replied, “If there is no price anywhere then it’s good. Please make sure Madison Title knows that one mistake kills the deal … there should only be one person talking to End Buyer attorney and they should be very careful.”

Madison Title, which is among the largest title insurers in the tri-state area, claims the email shows that Madison understood the Cincinnati deal to be an arm’s-length transaction. 

“As reflected in the cited email, Madison was not aware of the alleged mortgage fraud scheme,” said a spokesperson for Madison Title.

Madison Title has not been charged with any wrongdoing, but they are essentially blacklisted by Fannie Mae, shutting off a major part of their business. 

The DOJ’s charges against Silber are part of a broader crackdown on commercial mortgage fraud throughout the country. The Federal Housing Finance Agency is also involved in investigating the fraud. Last month, Lakewood, New Jersey investor, Aron Puretz, recently pleaded guilty for his role in a $60 million fraud scheme. The DOJ’s attorney said at a recent hearing it plans to indict his son Eli Puretz unless he strikes a plea deal.

Many of the loans being investigated were transferred to the government-sponsored entities Fannie Mae or Freddie Mac. The agencies have in turn halted doing deals with certain brokers, title insurers and appraisers as they conduct their investigation.