A local business owner was convicted Thursday of defrauding taxpayer-funded mortgage lenders out of millions of dollars in a years-long scheme involving fraudulent short sales of distressed properties.
Avraham Tarshish, 40, of Queens Village now faces up to 30 years in prison after a Brooklyn jury found him guilty of conspiracy to commit wire fraud and bank fraud, as well as related wire fraud charges.
The verdict was announced by Breon Peace, United States Attorney for the Eastern District of New York, following a 12-day trial before Chief United States District Judge Margo K. Brodie.
According to prosecutors, Tarshish, an employee of My Ideal Property Inc. and owner of several real estate companies — including Exclusive Homes Realty Group, Inc. and Homeowners Solutions Group LTD — conducted the scheme between March 2013 and November 2018.
Authorities said the Brooklyn/Queens business owner and his four co-conspirators manipulated short sale transactions, which allow distressed homeowners to sell properties for less than the mortgage owed, typically with the lender agreeing to forgive the remaining balance. The scheme involved artificially deflating property values and immediately reselling the homes at much higher prices.
Prosecutors presented evidence that Tarshish paid homeowners in foreclosure to ensure exclusive access to short sales, blocked competitive offers by failing to market the properties as required, and placed fraudulent liens on homes to lower their perceived value. He and his co-conspirators also intentionally damaged properties, removing toilets and plumbing and creating other issues — calling it a way to make the homes “pretty,” according to trial testimony.
False documents were provided to mortgage lenders, concealing payments to homeowners and side agreements to flip properties at inflated prices. Many affected loans were insured by the Federal Housing Administration or backed by Fannie Mae and Freddie Mac, entities funded by taxpayers.
Prosecutors presented specific evidence from 11 fraudulent short sales in Brooklyn that caused lenders more than $2.4 million in losses.
“The defendant defrauded taxpayer-funded mortgage loan holders out of millions of dollars and took advantage of programs designed to help distressed property owners in need,” stated United States Attorney Peace. “Short sale mortgage fraud not only harms lending intuitions, it also depresses real estate values throughout our
neighborhoods and prevents community members from gaining fair access to housing.”
Tarshish’s co-conspirators who previously pleaded guilty, Iskyo Aronov of Miami, FL, Michael Konstantinovskiy of Rego Park and Tomer Dafna of Great Neck are also facing the maximum sentence of 30 years when sentenced. The fourth co-conspirator, Brooklynite Michael Herskowitz, could serve up to five years in prison for his role in the scheme.
