An indictment unsealed in a Brooklyn federal court alleged four New Yorkers and one Floridian misled mortgage companies, the government-sponsored enterprises and a government agency regarding short-sale property prices.
Named in the indictment are Iskyo Aronov of Miami; Tomer Dafna, who lives in Great Neck, N.Y.; and three New York City residents: Michael Herskowitz, Michael Konstantinovskiy and Avraham Tarshish.
Aronov, Dafna, Konstantinovskiy and Tarshish all worked for real estate companies and Herskowitz was a New York real estate attorney at the time of the alleged scheme.
The five men are charged with conspiracy to commit wire and bank fraud for allegedly misleading mortgage companies into approving short sales at fraudulently depressed prices when the properties in question were actually being resold at a large profit.
"The defendants also took steps to preclude other prospective purchasers from making higher offers for properties by failing to market properties as required by the lenders, and by filing fraudulent liens on properties," according to the U.S. Attorney's office in the Eastern District of New York.
The mortgage industry typically allows a short sale in situations where the optimal outcome for a financially troubled borrower may be to sell a home for less than it is worth to help pay off housing debt. Noteholders or guarantors usually agree to forgive the remaining loan balance and take a writedown.
The false devaluation of the properties between December 2012 and January 2019 allegedly cost mortgage companies, Fannie Mae, Freddie Mac, the Federal Housing Administration and taxpayers millions of dollars, according to the U.S. Attorney's office.
The five defendants are presumed innocent unless or until proven guilty. If convicted, they each could face a maximum of 30 years in prison and a $1 million fine.
