FBI Makes Arrests in Sweeping Mortgage, Welfare Fraud Case

By Steve Lieberman
Journal News
November 13, 2014

http://www.lohud.com/story/news/crime/2014/11/13/fbi-arrests-mortgage-welfare-fraud/18961127/

An extended family and several business associates were indicted on federal charges Thursday in a rich man, poor man mortgage and welfare fraud scheme that authorities say netted more than $20 million.

Federal agents arrested 13 people in pre-dawn raids in the ultra-Orthodox Jewish communities of Williamsburg in Brooklyn, Kiryas Joel and Monroe in Orange County, and Manhattan. Those charged include a Monsey resident who allegedly provided faulty real estate appraisals as part of the fraud. Two more people indicted are expected to surrender Thursday, authorities said.

"The defendants involved alternately played the parts of prince and pauper depending on which scam was being perpetrated," U.S. Attorney Preet Bharara said at a news conference in White Plains. "There's a lot of fraud here and shell games... The fraud was complex and they were fairly organized."

He said the investigation is continuing.

Using falsified documents and concealed identities, the group obtained $20 million in mortgages and other loans from banks and financial institutions, according to the 21-count federal indictment unsealed Thursday morning.

Bharara said some of the defendants doubled dipped, claiming to be rich while obtaining million dollar loans and mortgages and then pleading poverty – even homelessness – to get welfare payments and social services.

They used the money to pay credit card debts, mortgages, an on other real estate projects, and to enrich themselves and their families, authorities said. They also provided charity to residents of Brooklyn, Monroe and Kiryas Joel.

FBI Assistant Director George Venizelos said by fraudulently taking social service benefits, they also took money other people truly needed.

The indictment includes charges of bank fraud, conspiracy to make false statements to lenders, aggravated identity theft, and theft of public money. Some 20 loans were identified as problematic; the majority of those went into default, Bharara said.

The federal probe grew out of a bad check investigation three years ago in Orange County.

The indictment names Yehuda Rubin, 29, as the scheme's organizer, accusing him of participating in 10 fraudulent loans. He allegedly acted as a borrower, the borrower's power of attorney, mortgage broker, distributor of the money and arranger of short sales.

Yehuda Rubin, 29, and his wife, Rachel, 29, of Monroe claimed $180 a month and $360 biweekly from Rachel Rubin's work to qualify for Medicaid and food stamps, but they also claimed a monthly income of $25,000 to get loans from banks, Bharara said, pointing to a chart during a news conference.

The borrowers who fraudulently obtained loans allegedly included various family members and associates: Yehuda Rubin's father, Irving Rubin, 58, of Brooklyn; Irving Rubin's brothers Abraham Rubin, 51, Jacob Rubin, 41, Samuel Rubin, 59, all of Brooklyn; another son of Irving Rubin, Joel Rubin, 33, of Brooklyn; Irving Rubin's wife, Desiree Rubin, 57, of Brooklyn; and other relatives by marriage – Joel Koppel, 30, of Monroe, Rifka Rubin, 46, of Brooklyn, and Benzion Kraus, 29, of Brooklyn.

U.S. Attorney Preet Bharara refers to visuals charts as he announced the unsealing of an indictment charging 15 defendants with bank fraud and wire fraud in connection with mortgages and other loans during a press conference Nov. 13, 2014 at the United States Federal Courthouse in White Plains. (Photo: Matthew Brown / The Journal News)

Attorney Martin Kofman, 53, of Brooklyn is accused of acting as the real estate lawyer on numerous transactions with fraudulent loans. Pinchus Glauber, 53, of Monsey, the appraiser, is accused of lying about the detail of his review of a property, as well as inflating their value. He also is among a number of the defendants accused of fraudulently obtaining public assistance – in his case, $60,400 in food stamps between 2009 and 2014.

Glauber's lawyers, Kenneth Gribetz and Deborah Wolikow-Loewenberg, said their client would plead not guilty. Gribetz, a former Rockland district attorney, said Glauber is a licensed appraiser, father of seven and rents a townhouse at a Route 59 development.

"He didn't gain financially one cent," Gribetz said. He said Glauber did three appraisals for the Rubins: "He works hard. His only compensation was a minimal fee for the appraisal. We hope he will be vindicated."

Glauber was later released on bail: a $100,000 bond secured by property with $25,000 in security.

Contact: slieberm@lohud.com