Aron Puretz Sentenced to Five Years in Prison for Fraud

A federal judge in New Jersey sentenced real estate investor Aron Puretz to 60 months in prison for his role in a wide-ranging commercial mortgage fraud scheme.

Puretz pleaded guilty this summer to one count of wire fraud after prosecutors alleged he engaged in a multi-year conspiracy to fraudulently obtain $54.7 million in loans from Freddie Mac and lenders.

U.S. District Judge Robert Kirsh sentenced Puretz to the maximum of five years in prison and ordered him to pay restitution of $22 million. He was detained immediately at the end of the Dec. 12. hearing.

Puretz’s lawyer, Steven Yurowitz, did not return a request for comment.

In one case, according to the Department of Justice, Puretz and co-conspirators, including disgraced investor Boruch Drillman, acquired an office complex in Troy, Michigan, for $43 million, but presented the lender with a fraudulent sales contract for $70 million. The inflated sales price induced the lender to make a larger loan than it otherwise would have made.

Puretz, who ran Apex Equity Group, was also involved in a similar scheme with a multifamily property in Eureka, Illinois.

And in a separate deal, Puretz and his co-conspirators acquired a rental property in Little Rock, Arkansas, using the identity of an associate. Prosecutors said Puretz hid his ownership from the Department of Housing and Urban Development and other federal and state agencies.

Puretz’s sentencing will likely set a precedent for other investors who have pleaded guilty in the sprawling mortgage fraud investigation by the Department of Justice and Federal Housing Finance Agency.

His son, Eli Puretz, pleaded guilty to one count of wire fraud for his role in the Michigan deal. Drillman pleaded guilty to one count of wire fraud and is also awaiting sentencing.

An investigation by the Philadelphia Inquirer documented numerous code violations and deplorable living conditions at properties owned by the Puretz family. Brith Sholom, a senior housing complex in the Wynnefield section of Philadelphia, racked up 275 code violations and siphoned $1 million from residents’ utility payments. Squatters are terrorizing the senior residents, the Inquirer reported.

The Puretz companies acquired more than 16,000 units of low-income housing nationwide and took out mortgages against the properties totaling more than half a billion dollars, according to the report.