Authorities: New York Hasidic family secured $20 million in loans by claiming poverty

Authorities: New York Hasidic family secured $20 million in loans by claiming poverty

One couple even claimed to be homeless, authorities said.

Police busted a prominent Satmar Hasidic family in New York on charges of lying about their income in order to get $20 million in mortgages.

Preet Bharara, U.S. attorney for New York’s Southern District, announced indictments Thursday for 15 defendants in what they allege is a conspiracy to commit bank fraud on properties in three counties, two of which were in New York City, according to the New York Times.

The charges include making false statements to lenders, identity theft, and stealing public money. As of yesterday, 13 of the defendants had been arrested and will face arraignment in White Plains, N.Y.

Bharara said the defendants were on Medicaid and receiving food stamps — one couple even said they were homeless — when they secured 25 mortgage loans amounting to $20 million for a number of residential properties in Harlem, Brooklyn, and Monroe. They did this by greatly overstating their actual income and net work. Once receiving the loans, they simply let them default.

Of the 15 defendants, 12 were members of an extended family of Hasidic Jews, according to the Jerusalem Post.

Bharara said during a news conference that the family “played the part of prince or pauper” depending on what scam they were perpetrating, alternately claiming to be homeless or millionaires depending on which suited them at the time.

Irving Rubin, 58, of Brooklyn is a central figure of interest in the scam. His wife, sons, and brothers were also involved in the plot, authorities say.

One couple received $173,000 in Medicaid and food stamps over the past five years by saying they had been homeless and received less than $200 per week — despite that, they were able to secure loans of up to $1 million by claiming that the wife received $12,000 per month, according to the indictment.

A lawyer representing the accused say the banks deserve to be blamed for making the loans so easy to get, noting that it was banks’ lack of background checks that led to the subprime mortgage collapse about six or seven years ago.

Authorities say they were able to blow the lid off the case beginning three years ago when a routine investigation of a bad check uncovered some inconsistencies.

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