Home Banking & Finance Three change pleas to guilty in rich man, poor man fraud schemes

Three change pleas to guilty in rich man, poor man fraud schemes

SHARE

Three members of an extended family with ties to Orange County who were accused of conspiring in a rich man, poor man series of frauds that allegedly netted $20 million have entered guilty pleas.

The 15-member Rubin Organization – Irving Rubin, his wife, sons, brothers and in-laws, as well as an unrelated lawyer and a real estate appraiser – were charged in 2014 with mortgage fraud and welfare fraud. The 21-count indictment accuses the organization of bank fraud, making false statements to lenders, theft of public money, identify theft and wire fraud. All pleaded not guilty.

In the rich man part of the alleged conspiracy, the organization obtained 20 loans from 2004 to 2014, secured by properties in Brooklyn, Harlem and Orange County. Family members inflated their incomes and assets to get the loans, according to an indictment filed by former U.S. Attorney Preet Bharara.

Most of the loans went into default and most of the debts were not repaid, the government says, and the loan money was used for personal credit card debts, home mortgage payments and real estate projects on which they earned rental income.

In the poor man scheme, they allegedly claimed poverty to get Medicaid, food stamps and Home Energy Assistance Program benefits.

The government identified Yehuda Rubin, of Kiryas Joel in Orange County, as an organizer. He was accused of participating in 10 fraudulent loans.

In 2006, for example, he got a $1.05 million mortgage from National City Bank on a property at 53 West 119th St. in Manhattan and a second mortgage in 2007 for another $350,000, according to the government. The indictment states that he falsely claimed the property was his primary residence and that he and his wife, Rachel, a co-defendant, earned $31,000 a month. But in claiming $43,863 in Medicaid benefits, according to the indictment, they declared income ranging from $180 to $720 a month.

In February, Yehuda Rubin changed his plea to guilty of conspiracy to defraud the U.S.

Yehuda’s brother and sister-in-law in Brooklyn, Joel and Rivky Rubin, allegedly claimed income of $12,000 a month to get loans totaling more than $1 million. But they said they were homeless at one point and later claimed income of $310 a week to get $173,707 in Medicaid and food stamps.

Joel Rubin changed his plea to guilty in January on one count of conspiracy to defraud the U.S.

On May 3, Joel Rubin asked the court for permission to travel to Israel for a pilgrimage to the grave of a revered Second Century spiritual leader. U.S. District Judge Kenneth M. Karas denied the request.

Yahuda’s uncle in Brooklyn, Samuel Rubin, falsely claimed income of $350,000 a year and a net worth of more than $10 million to get more than $7 million in loans, the government states. But he claimed income of only $200 a week to get $279,844 in Medicaid and food stamps.

He changed his plea to guilty in February to conspiracy to defraud the U.S. and to theft of public money.

Presentence investigations were ordered. None of the men has been sentenced yet. Charges against the other 12 co-defendants are pending.

Print Friendly, PDF & Email

LEAVE A REPLY

Please enter your comment!
Please enter your name here