Judge Awards JLL $22M In Mortgage Fraud Scheme
JLL has been awarded $21.7M as restitution for a mortgage fraud scheme that dates to 2018.
Real estate investors Fred Schulman and Moshe Silber, as partners Rhodium Capital Advisors, were ordered to pay the commercial brokerage the sum as a result of the mortgage fraud scheme they pleaded guilty to perpetrating in August 2024.
Schulman and Silber were sentenced to prison last April, but the court had yet to determine the amount they would pay in restitution.
In late December, U.S. District Court Judge Robert Kirsch of New Jersey carried out the judgment to award JLL the nearly $22M, The Real Deal reported Wednesday, citing court filings.
The brokerage and Fannie Mae were victims in a scheme in which Schulman and Silber received an inflated mortgage for the acquisition of a 976-unit rental property in Cincinnati.
Rhodium Capitol Advisors acquired the Williamsburg of Cincinnati property for $70M in March 2019. Schulman and Silber subsequently falsified a sale in which they appeared to “flip” the property for $96M.
The inflated price for the property was then presented to JLL, and, based on that sale amount, the firm issued a $74.25M loan for the purchase. JLL then sold the loan to Fannie Mae before repurchasing it in 2024 for $81M, The Real Deal reported.
In a December filing, Schulman and Silber's lawyer claimed that high-ranking executives at the brokerage were complicit in the fraudulent transactions and that the defendants didn’t owe the brokerage anything.
That argument didn’t fly with the judge, who wrote that “[T]o make such a finding that would resolve defendants of their substantial restitution obligations,” TRD reported.
The prosecutors, meanwhile, had argued that the sum should be $30M, before the judge revealed his $22M decision.
JLL had previously revealed that the fraud case had resulted in an $18M loss during the second quarter of 2024.
The issue of mortgage fraud at the agencies has been a heightened concern in recent years, and Federal Housing Finance Agency Director Bill Pulte has indicated he intends to use his role to crack down on the issue.
