Execs who stranded Brith Sholom House seniors were sentenced to federal prison for fraud
Chaim “Eli” Puretz and Aron Puretz were sentenced for mortgage fraud. Their family company was tied to a string of failing affordable-housing complexes.
Two members of a New Jersey family that built a troubled affordable-housing empire — loading aging properties such as Philadelphia’s Brith Sholom House with debt, and then walking away as they tumbled into disrepair — have been sentenced to federal prison for mortgage fraud.
On Thursday, Chaim “Eli” Puretz, the scion of the family behind Apex Equity Group, received a two-year prison sentence from U.S. District Judge Robert Kirsch in New Jersey, the Real Deal reported. Puretz previously pleaded guilty to a role in a $119 million conspiracy to defraud a financial institution, using phony documents to inflate the value of a purchase.
His father, Aron Puretz, was sentenced in December to five years in prison, plus a $250,000 fine and $22.2 million in restitution. He is appealing the sentence, though he has admitted guilt in the case, which involved a $54.7 million mortgage-fraud scheme.
Aron’s brother, Chaikel Puretz, is scheduled for trial later this month in Indiana, where he is charged with stealing residents’ utility payments.
An Inquirer investigation last year revealed that the network of Puretz companies controlled more than 16,000 affordable-housing units in 21 states, many of them financed with municipal bonds, obtained in Pennsylvania and elsewhere by using a nonprofit with a phony board of directors.
Tenants have suffered illness, injury, and death. Poor cities across the country have been forced to pay millions of dollars to relocate tenants and to cover missing utility money to avoid emergency shutoffs.
The pattern was well-established by the time Philadelphia’s Brith Sholom House and Pavilion, neighboring apartment complexes in the city’s Wynnefield Heights section, were forced into receivership amid foreclosure lawsuits. City leaders in Philadelphia had been aware of the brewing crisis at Brith Sholom since at least 2019, when they for a time revoked the property’s rental license.
But the situation there grew more critical last year, as Philadelphia Gas Works threatened a shutoff over a gas bill that was more than $1.5 million in arrears. Residents lamented deteriorating conditions: unaddressed leaks, infestations of vermin, heat shutoffs, and broken elevators.
After months of tenant organizing, the Philadelphia Housing Authority stepped in last August and agreed to purchase the building for $24 million, to maintain it as affordable senior housing. Chief executive Kelvin Jeremiah said that renovations were expected to cost $30 million to $40 million — making the 360-unit purchase “a deal.”
Then, in November, the agency said that worse-than-anticipated conditions would roughly triple that renovation cost to $112 million — and require that all of the 111 remaining tenants be relocated during construction. The agency is providing relocation assistance and issued a notice to tenants on Jan. 2 notifying them that they would have to be out within 90 days.
Madison Gray of the Public Interest Law Center, which has been representing the tenants, said the situation at Brith Sholom continues to be “precarious” and highlights the need for more public investment and oversight.
“We need to make sure that seniors, and low-income tenants in general, are in properties controlled by people who have their best interests at heart — not people who are just trying to loot the building and extract as much profit as they can.”
Eli Puretz, in a podcast interview, said the deal that led to his conviction was his “very first real estate transaction.” He said he was “blinded and fooled” by more experienced real estate players.
Puretz — who was also involved in the ownership of a chain of Pennsylvania skilled-nursing facilities that have been forced into bankruptcy by creditors — said he was dazzled by the possibility of get-rich-quick deals.
“Coming from a yeshiva background, and being able to acquire whether it’s 20 nursing homes in a year’s span or large swaths of real estate at a very fast pace … your judgment was clouded by the fact that everyone else around you was making big moves so fast, so easily,” he told the Halacha Headlines podcast. “It makes it seem very kosher to do these certain gray areas.”
Steve Kolhami, 68, a member of Brith Sholom’s resident council, said he’s not looking forward to the relocation and still has many questions about the relocation process. But he’s not bitter.
“With respect to the former owners of the building, many of my fellow residents here at Brith Sholom are very angry, and rightfully so, about the way they were treated,” he said. “I’m not happy about the way we were treated. However, I’m one of those people that prefers to look at the positive. I prefer to look at all the wonderful people I’ve met … through this experience.”