14 People, Most Relatives, Charged in Massive Mortgage, Bank and Welfare Fraud Conspiracy

An investigation that started with a bad check in Orange County culminated this morning with indictments unsealed against 14 people—members of the Rubin family, a real estate attorney and a real estate appraiser—over a conspiracy that stretched through Rockland County to Manhattan and Brooklyn.

New York law enforcement officials said between 2004 and 2014 the extended family and their helpers obtained more than $20 million in loan proceeds in connection with more than twenty fraudulent loans, most mortgages on which they defaulted, mostly by lying about their assets, employment and residences.

At the same time that they were overstating their wealth to bankers, they were understating it to state and local agencies—collecting Medicaid, Food Stamps, and Home Energy Assistance Program (“HEAP”) benefits.

Members of the group, who range in age from 59 to 29 and live in Chestnut Ridge, Monroe and Brooklyn, used the money for personal expenses, real home mortgage payments, real estate from which they earned rental income. They sometimes used the money to pay debts to conceal how phony the loans were.

The group includes Irving Rubin, 58, and his wife Desiree, 57. Also indicted were his brothers Abraham, Jacob and Samuel Rubin, their sons Yehuda and Joel Rubin and their in-laws Joel Koppel, Benzion Kraus, Rifka Rubin, Rachel Rubin and Rivky Rubin. Co-defendants Martin Kofman, a real estate lawyer and Pinchus Glauber, a real estate appraiser, are both licensed to practice in New York.

Officials singled out Yehuda Rubin as an organizer of the conspiracy, saying he personally participated in at least 10 of the particular fraudulent loans, in various roles, including as borrower, borrower’s power of attorney, mortgage broker, distributor of fraudulent loan proceeds, and arranger of short sales.

He and his wife Rachel, his brother and his wife, Rivky, and his parents, all received public assistance as well. For example, according to the indictment Yehuda and Rachel Rubin claimed, among other things, that their only income was $180 per month, and later $360 bi-weekly, from Rachel Rubin’s employment. To receive loans totaling more than $1 million, on the other hand, her husband claimed that he was employed, earning more than $17,000 per month in employment and rental income, and she claimed that she was employed, earning $14,000 per month.

At a press conference this morning in White Plains, Preet Bharara, U.S. Attorney for the Southern District of New York; George Venizelos, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation; and Carl E. DuBois, the Sheriff of Orange County, described a decade of “sweeping and cynical fraud.”

“As alleged, the scheme carried out by the Rubins and others ripped off banks, welfare programs, and taxpayers,” Bharara said. “ It ranged from 2004 to 2014, from Brooklyn to Harlem to Orange County, and the individuals involved alternately played the parts of prince or pauper, depending on which scam was being perpetrated. Now their alleged double dealing will be stopped, and they will have to submit to the truth-seeking process of the criminal justice system.”

“We would like to thank United States Attorney Preet Bharara and his staff for their efforts and assistance, and I would also like to thank the personnel from all of the agencies involved for a commitment to this long and complicated investigation,” DuBois said. “It is important to note that this case originated from the Orange County Sheriff’s Office. Upon investigating what is usually a routine case, our investigator showed due diligence in her follow up, and with the latitude and encouragement by my office to investigate further using FBI resources, the result was a lengthy and comprehensive multi-jurisdictional, multi-million dollar mortgage fraud investigation.”

The investigation started three years ago when Orange County Sheriff’s investigator, Sgt. Meredith McGovern, started looking into a bad check, the Times Herald-Record reported. FBI agents arrested 13 of the defendants in an early morning sweep in Monsey, Kiryas Joel and Brooklyn, according to the paper.