The owner of an apartment complex in Cincinnati, Ohio, has pled guilty this week to a $165 million federal mortgage fraud conspiracy that was done over the course of several years.
Boruch "Barry" Drillman, 36, collaborated with at least four other individuals to forge documents with the aim of inflating the purchase and sale contracts of two properties. The documents were then given to lenders who issued multifamily and commercial mortgage loans. This fraudulent scheme was done between 2018 and 2020, according to a press release published by the US Department of Justice's Office of Public Affairs.
In March 2019, Drillman acquired the Williamsburg Apartments complex for $70 million. However, he and his co-conspirators used a stolen identity to present both a lender and Fannie Mae with a contract for $95.85 million. The property was later acquired in two closings: one for the true amount of $70 million and the second for the fake $95 million sale.
Drillman and his co-conspirators also engaged in the same fraudulent scheme to acquire Troy Technology Park in Michigan. The park was on sale for $42.7 million, but documents Drillman and his co-conspirators submitted to the lender and appraiser stated that they intended to purchase the property for $68.8 million.
Other Real Estate Lawsuits
Apart from wire fraud, Drillman and BRC Williamsburg Holdings LLC-which he manages-were also named in a $1 million lawsuit filed by the City of Cincinnati. In the lawsuit, the city accused Drillman of deserting the tenants of Latitude Five25, a twin-tower 976-unit apartment complex, and forcing them to live in "unlivable conditions."
Some of the complaints outlined in the lawsuit included no access to heating or water from November to Christmas last year. There were also complaints of burst pipes, blocked sewer lines, hazardous wires, bedbugs, broken elevators, and asbestos.
"While our city has made every effort to work with property owners, management and tenants, it has become necessary to begin legal action immediately," Cincinnati Mayor Aftab Pureval said. "To demand assurances that these conditions will improve and that Williamsburg apartments become a safe environment for all."
City inspectors later issued an evacuation order after city inspectors found numerous health code violations on the property.
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