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Thousands of poor and elderly residents were stranded in awful apartments. Here’s what our investigation found.

The Puretz family took out huge, often subsidized, loans to buy affordable housing complexes, then cut maintenance, didn't pay utilities, and let them slide into ruin, an Inquirer investigation found.

Residents protest outside Brith Sholom House, a senior complex in Philadelphia's Wynnefield section, in April.
Residents protest outside Brith Sholom House, a senior complex in Philadelphia's Wynnefield section, in April.Read moreJessica Griffin / Staff Photographer

» READ MORE: Empire of Neglect: A N.J. family bought up 16,000 housing units, then let them fall into decline

This spring, seniors living at Brith Sholom House in Philadelphia received a series of ominous warnings from “property management” — that their gas was about to be shut off, and they would soon be forced out of their homes.

It was one more outrage for residents living in already trying conditions — including weeks without heat, infestations of bedbugs and roaches, and leaks that caused flooring to disintegrate and chunks of ceiling to fall on their heads.

An Inquirer investigation has found that the residents of that 360-unit Wynnefield Heights building are among thousands of tenants nationwide who were similarly victimized as a result of one family’s empire of neglect.

Here are the takeaways.

1. Brith Sholom’s ownership can be traced to a family that owned more than 100 other affordable complexes across the country.

The Puretz family is a New Jersey-based real-estate dynasty spanning three generations, beginning with Lieb Puretz, a Brooklyn affordable-housing owner who rose to prominence with Staten Island development plans that stalled out in the Great Recession. After several bankruptcies, his sons — Aron and Chaikel “Chaim” Puretz — began massively expanding their multi-family portfolio. Lieb’s grandson, Eli, is also involved in their company, Apex Equity Group.

The Puretzes have a long history of obscuring their assets, starting with Lieb, who said he did not keep a bank account and lived in a home legally owned by a nonprofit, allowing him to reside there rent-free. As Aron and Chaikel grew the family’s empire in the 2010s, they formed numerous holding companies that blurred their involvement, as well as a nonprofit stocked with phony board members.

Despite these complex arrangements, investigators would conclude that the Puretzes were almost always in control of the bank accounts, flush with revenues from their investments.

2. They had a pattern of sucking the equity out of properties and letting them fall into disrepair.

The family took out well over half a billion dollars in mortgages and tax-free municipal bonds to purchase aging affordable-housing complexes, many of them attached to voucher contracts with the U.S. Department of Housing and Urban Development (HUD).

But instead of using those funds to rehab the deteriorating buildings, court records show, property managers cut way back on maintenance. They also were accused of pocketing revenues, including residents’ utility payments, leading to massive unpaid bills and electrical and water shutoff notices.

The result was properties that were hazardous — even, in some cases, deadly. A Missouri woman died in a fire thought to be linked to a faulty furnace. A Georgia man died in a baking-hot apartment. And a 9-year-old girl in New York was seriously injured when she fell down an elevator shaft.

Many of their properties were condemned, evacuated by HUD, or forced into receivership.

3. The Puretzes’ benefited from government policies.

The Puretzes were able to acquire upwards of 100 apartment complexes nationally due to U.S housing policies that encourage private operators to invest in affordable housing complexes — even operators, like the Puretzes, who had habitually run properties into the ground.

Due to lax regulation and oversight, the Puretzes were able to use phony nonprofits to avoid taxes and benefit from federal subsidies. They were also able to access special government financing — like nearly $50 million in tax-exempt bonds from Pennsylvania agencies — to continue amassing new properties.

Even as HUD took legal action against the Puretzes, the family was able to purchase new properties that had HUD subsidies. A HUD spokesperson said the agency exercises oversight, but also relies on owners to be honest about their identities.

4. The Puretzes are now accused of theft and mortgage fraud.

By the 2020s, local, state, and federal regulators and prosecutors had spent years chasing the Puretzes — but there was little coordination.

Some were successful: In Indiana, for example, the state attorney general coordinated with local officials to ban the Puretzes from operating in the state and force them to dissolve their nonprofit, following years of complaints and several catastrophic fires. Later, Indianapolis detectives charged Chaikel Puretz with theft of tenants’ utilities payments. His trial is set for October.

More recently, the U.S. Department of Justice began pursuing business associates of the Puretzes over their involvement in a series of questionable mortgages — in which they falsely inflated the purchase price of properties in order to get larger loans. In June, Aron Puretz plead guilty in connection to a $54 million mortgage fraud conspiracy aimed at acquiring even more multi-family apartment complexes.

His son, Eli Puretz, was referenced as an unnamed “co-conspirator” in a charging document. He has not been charged and, according to court records, has branched out into new ventures — including involvement in a disastrous private equity takeover of a chain of Western Pennsylvania nursing facilities that are now in receivership.

5. The future of the Puretzes’ Pennsylvania holdings is mixed.

One complex, Hillside Manor in Chester, Pa., was auctioned off in May by federal marshals after the family defaulted on a federally backed mortgage.

A Reading complex was condemned, but later sold. The family defaulted on a bond for two Pittsburgh complexes.

And both Brith Sholom House and the nearby Pavilion apartments are currently in the control of court-ordered receivers. They will likely be sold, as neither City Hall nor the Philadelphia Housing Authority have committed to takeover plans.

Seniors still living in Brith Sholom are vulnerable, as the property requires extensive maintenance work and is scheduled for sheriff’s sale.

There is no guarantee the property will find a buyer, or that the new owner will operate the complex better than the Puretzes.

ACKNOWLEDGMENT
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