Bergen County Man Sentenced To 97 Months In Prison For Decad
-Long $60 Million F
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Many of the lenders who approved mortgages based on the false statements of Levine and
others in turn sold those mortgages to the Federal Home Loan Mortgage Corporation (Freddie
Mac) and the Federal National Mortgage Association (Fannie Mae). Because the refinances were
obtained with fraudulent data regarding the properties’ income and expenses, the multifamily
properties were overvalued and rents and other income from the properties did not cover the
mortgage payments and other expenses associated with the properties. To cover the shortfalls,
Levine obtained additional cash-out refinances, thereby increasing his total debt incurred. In total,
Levine controlled at least 70 multifamily properties, comprising approximately 2,500 apartments.
At the time the fraud was discovered, the outstanding balance of the fraudulently obtained
mortgages on the multifamily properties was more than $150 million, including 40 mortgages held
by Freddie Mac with an outstanding loan balance of approximately $103 million. At the time of
sentencing, the bank fraud conspiracy resulted in losses to victim lenders of at least $47 million.
While defrauding the lending financial institutions, Levine also carried out a securities fraud
scheme to defraud investors in the multifamily properties. He solicited investors to invest in the
multifamily properties based on materially false statements and promises about the condition of
the properties and the use of investor funds. Levine represented to investors that his conduct
would be limited by an operating agreement. However, after Levine acquired the multifamily
properties, he violated representations made to the investors, including by selling off portions of
Levine’s ownership interest in the properties without investor consent, bringing on additional
investors without consent, and refinancing the multifamily properties without investor consent.
Levine provided fraudulent documents to investors, such as operating agreements that
overstated Levine’s personal investment in the multifamily properties and documents bearing
signatures forged by Levine. He also co-mingled investor funds and used the funds in violation of
representations to investors, by using investor money to support other multifamily properties,
make payments to other investors, and further the fraud. At the time of sentencing, the securities
fraud victims lost more than $13 million.
In addition to the prison term, Judge Wigenton sentenced Levine to five years of supervised
release.
Individuals who believe they may have information about this case may contact the FBI at 1-800-
CALL-FBI (225-5324).
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in
Charge George M. Crouch Jr. in Newark, and special agents of the Federal Housing Finance
Agency, Office of Inspector General, under the direction of Special Agent in Charge, Robert
Manchak, with the investigation leading to the sentencing. The U.S. Securities and Exchange
Commission has filed a civil complaint against Levine based on allegations underlying the
securities fraud charge.
The government is represented by Assistant U.S. Attorney Heather Suchorsky of the Economic
Crimes Unit and Special Assistant U.S. Attorney Charlie L. Divine of the Federal Housing Finance
Agency, Office of Inspector General.
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Defense counsel: Benjamin Brafman Esq. and Jacob Kaplan Esq., New York
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