Scion of Puretz family that let Philly’s Brith Sholom House fall into disrepair admits fraud

Another member of the Lakewood, N.J., and Brooklyn-based Puretz family — which built a crumbling empire of at least 100 severely neglected affordable housing complexes including The Pavilion and Brith Sholom in Philadelphia — has been convicted of mortgage fraud conspiracy.

Chaim “Eli” Puretz, 29, pleaded guilty along with two coconspirators to participating in a $119 million conspiracy to defraud a financial institution in U.S. District Court in New Jersey on Thursday.

The convictions are connected to the purchase of a Michigan office complex, called Troy Technology Park, involving the coconspirators’ company, Rhodium Capital Advisors. Puretz admitted that, between 2018 and 2020, he helped create phony documents that artificially inflated the purchase price.

» READ MORE: Empire of Neglect: How the Puretz family cashed in while poor renters paid the price

Puretz and his coconspirators submitted the falsified documents to a lender as proof that his company had purchased the office park for $68.8 million — when, in fact, they acquired the property for $42.7 million. The documents convinced a lender to loan them $25 million more than they’d actually paid.

The family’s companies have a long history of failing to repay their loans.

His father, Aron Puretz, 53, already pleaded guilty to the Troy conspiracy. Aron’s brother, Chaikel Puretz, 47, is charged in Indiana with corrupt business influence and theft of $1.6 million in tenants’ utility payments at complexes there.

The Puretz family, whose company Apex Equity Group worked through hundreds of other corporate entities, has been in real estate for decades, undergoing a more-than-20-year roller coaster of bankruptcies, foreclosures and new investments.

» READ MORE: Five takeaways from our investigation into the Puretz family's 'Empire of Neglect'

Their tens of thousands of poor and vulnerable tenants paid the price, as the Puretz family bought up properties, burdened them with debt, skimped on repairs and allegedly stole residents’ utility payments, causing dozens of properties to be placed into receivership or shut down by local or federal authorities. Thousands of tenants were threatened with or endured utility shutoffs because their payments were stolen by the landlord, according to lawsuits and criminal charging documents. Some died in baking hot apartments or fires, others were sickened by mold or trapped due to broken elevators, and a child fell down an open elevator shaft.

In Philadelphia, elderly residents at Brith Sholom House in Wynnefield Heights endured leaks and mold, broken heaters, peeling floors, infestations of roaches and bedbugs, and an influx of squatters and criminal activity. The property is in receivership, pending city code-enforcement litigation and foreclosure proceedings.

Tenants have received notices warning of an impending gas shutoff related to missing utility payments. The property has also been listed for sheriff’s sale.

Nearby, The Pavilion, a property under a subsidy contract with the U.S. Department of Housing and Urban Development (HUD), is also in receivership and slated for sale.

In Aron Puretz’s earlier federal case, he admitted to falsifying records to deceive lenders and hide his involvement with two housing projects from HUD, as the agency had sought to cut off the landlord over chronic maintenance issues.

In his guilty pleading in June, he admitted to using a nonprofit, JPC Charities, to fraudulently get tax-exempt status and fabricating documents to secure additional mortgages purchased by Freddie Mac, a federally backed company.

The $36 million mortgage for the Brith Sholom property also shows red flags: The loan was made by a small financial institution run by the former owner of Brith Sholom House, a man named Jose Camacho, and signed by Irene Paul, a tenant of Brith Sholom who was in her 90s. Paul is now deceased. Her son said he could not make sense of why his mother would have been the signatory.

Camacho declined to answer questions.

Aron and Eli Puretz each pleaded to a single charge, and have not yet been sentenced. They have not returned calls and emails in recent weeks.

Their criminal defense lawyers did not immediately respond to requests for comment on Friday morning

Each of the Puretzes signed an agreement that stated the federal government would not pursue any other charges against them for commercial mortgage fraud, charities fraud, fraud on federal agencies, or investors.

Among the allegations federal prosecutors are opting not to pursue are allegations, articulated in civil court filings, that Eli Puretz stole $21.5 million from business partners in New York and defrauded investors, and that Aron Puretz improperly funneled hundreds of thousands of dollars from The Pavilion into his own pocket.

Eli Puretz is also allegedly among the partners in Bonamour Health Group, a Western Pennsylvania chain of nursing facilities, now in receivership. Staff there alleged in lawsuits that their health-insurance premium payments had been siphoned away, leaving them uninsured.

The two Rhodium coconspirators also pleaded guilty to wire fraud. All three are scheduled to be sentenced on Dec. 3, and face a maximum penalty of five years in prison.