New Jersey Man Pleads Guilty to Mortgage Fraud

Joshua Feldberger of Universal Abstract pleaded guilty to playing a minor role in a multimillion-dollar mortgage fraud case.

The Department of Justice charged Feldberger of Howell, New Jersey, in September 2024, along with Arthur Spitzer and Mendel Deutsch — both Toms River, New Jersey-based — over a scheme that allegedly allowed Spitzer to obtain loans for real estate properties he never owned.

Prosecutors alleged Spitzer orchestrated a ploy in 2019 and 2020 in which he identified properties in New Jersey or Brooklyn without mortgages or mortgages below the property’s market value.

Spitzer would then obtain loans on those properties he had no authority to take out loans on, according to the DOJ. He used fake documents with forged signatures to prove to lenders he controlled the properties. Spitzer allegedly took the proceeds from the loans and disbursed them in his accounts.

Supporting part

The DOJ accused Feldberger of assisting in Spitzer and Deutsch’s alleged scheme to fraudulently obtain a $4 million loan for properties on Malcolm X Boulevard in Brooklyn, which Spitzer did not own.

Feldberger played an essential, but smaller, role in the alleged scheme because he owned a title and settlement company. That company was not identified in the indictment, but publicly available records link Feldberger to Lakewood-based Universal Abstract.

As part of the scheme, Spitzer needed to give the appearance of selling properties to Deutsch.

In order to make the sale appear legitimate, the DOJ alleges Feldberger worked with Spitzer to create a document to show that Spitzer had interest in the Malcolm X properties. These fake membership interests allowed Spitzer to purport to sell the properties to Deutsch.

Feldberger also instructed an employee of his company to send a letter to a banker that claimed Deutsch had deposited funds into escrow accounts to purchase the Malcom X properties from Spitzer. As a result, the bank believed there was a legitimate sale and provided a $4 million loan to Deutsch.

Remarkably, Deutsch and Spitzer then allegedly used the mortgage loan proceeds to fund Deutsch’s down payment on the same properties. Another $100,000 of the loan proceeds was distributed to a relative of Feldberger, who used the money to repay a loan he made to Spitzer.

In a separate scheme, prosecutors allege Spitzer and Deutsch also fraudulently obtained $3 million in government loans intended for small businesses distressed by the pandemic.

Prosecutors initially charged Feldberger with one count of wire fraud, one count of bank fraud, one count of bank and wire fraud conspiracy, one count of aggravated identity theft and one count of making a false statement to a financial institution.

But Feldberger, represented by Zach Intrater of powerhouse criminal defense firm Agnifilo Intrater, pleaded guilty to just one count: bank fraud conspiracy. U.S. Judge Edward Kiel accepted Feldberger’s plea on October 22.

He is scheduled to be sentenced in February in Camden, New Jersey. The maximum sentence for that offence is 30 years, though it’s likely he will serve little to no jail time given his plea.

A larger crackdown

The DOJ and the Federal Housing Finance Agency have been cracking down on commercial mortgage fraud. Participants in these schemes often flipped properties or inflated rent rolls in order to extract higher loans from lenders. In many cases, properties were purchased with no equity at all.

For instance, Aron Puretz and his co-conspirators flipped an office complex in Troy, Michigan, to a related party at a higher price in order to secure an inflated $45 million loan from JPMorgan. Puretz was sentenced to five years in prison in 2024.

The case against Feldberger was the first time the Department of Justice brought charges against an executive or owner of a title or settlement company.

According to the plea agreement, Feldberger’s attorney claims his client only made $21,000 from the scheme, while prosecutors argued it was $100,000.

The DOJ will argue the loss caused by the scheme was more than $3.5 million but less than $9.5 million. Feldberger disputes the loss amount, according to the plea deal filed with the court.