July 24, 2024

New Jersey firm Riverside Abstract, a title insurance company, is again under scrutiny over its links to fraudulent mortgage dealings. This time, the allegations are in relation to a real estate transaction in Eureka, Illinois. The large tri-state area insurer had already drawn attention from agencies like Fannie Mae and Freddie Mac after previous allegations of mortgage fraud. Accordingly, Fannie Mae has stopped the processing of loans associated with Riverside.

The Department of Justice had earlier accused Riverside of conducting two closings, a real one and a sham one, for an office complex deal in Troy, Michigan. The department proposed that this double-closing allowed the owners – Boruch Drillman and Aron Puretz – to trick their way into a larger loan than they would have been eligible for otherwise.

The department now suggests a similar case of fraud for a multifamily deal in Eureka where Riverside again conducted both the real and the sham closings. Despite these allegations, Riverside hasn’t been charged directly with any fraudulent activities.

The Eureka case was brought up during the Department of Justice’s proceedings against one of the previous alleged co-conspirators, Puretz, who is also Lakewood-based like Riverside.

Puretz recently confessed to his part in a $55 million mortgage fraud scheme. According to the Department of Justice, he also swindled three other lenders and Freddie Mac. In a 2017 case, co-conspirator Drillman allegedly purchased a multifamily property in Eureka for $4.1 million. However, they produced a false sales contract for $5.8 million to the lender and Freddie Mac. Based on this inflated cost, Freddie Mac gave out a loan of $4.5 million. Riverside was responsible for both closings.

Federal prosecutors say Puretz concealed his stake in the property, suspecting that he would be denied a loan if he disclosed his ownership. Puretz could be looking at a maximum of five years in prison.

Despite numerous requests for comments, Riverside has yet to respond to press inquiries about their involvement in these transactions. They were listed as the 10th largest title insurance provider in New York by The Real Deal’s 2018 ranking.

In a February email to employees, Riverside informed that its assets would be sold to nursing home mogul Avery Eisenreich. This move was in response to rumors – seemingly referring to the report that Fannie Mae would cease business with them. Riverside’s owners sent an email stating that the rumors have hurt their reputation and, as a result, their business. But they hope to take a step forward and redirect their narrative. Link to Riverside’s owners words.

Denying all rumors, the owners of Riverside assured that their company can act as the title and escrow agency for any transaction. 

##### Read More

![Aron Puretz pleads guilty in $55M fraud scheme](https://investmentshoax.com/wp-content/uploads/2024/06/Aron-Puretz-pleads-guilty-to-mortgage-fraud-scheme-f-150×106.jpg)

*Aron Puretz involved in $55M mortgage fraud scheme admits guilt.*

![Avery Eisenreich contemplates Riverside acquisition](https://investmentshoax.com/wp-content/uploads/2024/06/TRI-Nursing-home-mogul-Avery-Eisenreich-eyes-purchase-of-title-insurer-Riverside-FEATUREIMG_v2-r1-15.jpeg)

*Avery Eisenreich considering the purchase of Riverside.*

![Title insurance industry undergoing potential reforms](https://investmentshoax.com/wp-content/uploads/2024/06/Title-insurance-feature-150×106.jpg)

*Small-scale commercial lending exposed due to mortgage fraud scam.*

###### Frequently Asked Questions

What is Riverside Abstract accused of in the Eureka, Illinois deal?

Riverside Abstract is accused of aiding a mortgage fraud scheme in Eureka by organizing two closings for a property – a legitimate one and a fake one. This allowed the buyers, Boruch Drillman, and Aron Puretz, to inflate the price of the property and secure a larger loan from Freddie Mac. However, Riverside Abstract has not been charged with any wrongdoing.

What was Riverside’s involvement in earlier fraudulent deals?

In a separate incident, the Department of Justice accused Riverside Abstract of a similar dual closing scenario for an office complex transaction in Troy, Michigan. The owners allegedly used the fake closing to secure a larger loan than they would otherwise have been eligible for.

What are the consequences for Riverside Abstract and the alleged fraudsters?

While Riverside Abstract faces damaged business relationships – Fannie Mae has already stopped closing loans with Riverside – and a hurt reputation, Aron Puretz, one of the key people involved, faces a potential jail term of up to five years. Riverside Abstract is also set to sell its assets to Avery Eisenreich, a nursing home mogul.