Moshe Silber is out of prison, however he’s staring down a significant monetary gap.
The investor and his enterprise associate, Fred Schulman, had been ordered to pay $21.7 million in restitution to their lender, JLL. The pair pleaded responsible over a 12 months in the past to a mortgage fraud scheme during which they obtained an inflated mortgage for a 976-unit rental property in Cincinnati.
A lawyer for Silber and Schulman argued the duo didn’t owe any restitution to JLL, claiming that workers of the lender had been nicely conscious of the fraud.
The defendants pleaded responsible in 2024 to a conspiracy to commit wire fraud cost and had been sentenced earlier this 12 months.
However how a lot they owed was undetermined, and the edges had vastly totally different numbers in thoughts. In December 2025, prosecutors argued the quantity ought to be $30 million. Silber and Schulman’s facet stated JLL ought to be awarded no restitution.
“Excessive rating executives of JLL had been complicit in, and facilitated, the Cincinnati fraudulent mortgage transactions,” Silber and Schulman’s attorneys wrote in a submitting. “Because of this, JLL is precluded from asserting that it was a “sufferer” of the defendants’ conduct.”
U.S. District Courtroom Choose Robert Kirsch of New Jersey didn’t purchase this argument. “[T]o make such a discovering that may resolve defendants of their substantial restitution obligations,” he wrote in a 25-page ruling in late December.
Silber and Schulman’s case was among the many first in a broader crackdown on commercial mortgage fraud by the Division of Justice and the Federal Housing Finance Company. Silber, Schulman and their co-conspirator, Boruch Drillman, launched into a scheme in 2019 to purchase an house advanced for $70 million earlier than utilizing a stolen id to primarily “flip” the property to themselves for $96 million.
The upper buy value served as a key metric to safe a $74 million mortgage from JLL, which then bought the mortgage to Fannie Mae, the government-sponsored company that buys loans from personal lenders.
The true sufferer
The 2 sides bickered over the place to pin blame.
JLL was not a sufferer of the fraud, lawyer Jerome Ballarotto argued on behalf of Silber and Schulman.
JLL repurchased the mortgage from Fannie Mae in 2024 for $81 million, the protection argued, figuring out it will end in a major loss, for 2 causes: JLL needed to restore its relationship with Fannie Mae and Freddie Mac and the agency turned conscious that two executives dealing with the mortgage had been complicit within the fraud.
However Silber and Schulman failed to supply any documentation backing these claims, Kirsch stated, and there was no indication that the 2 JLL executives had been ever investigated by legislation enforcement over the Cincinnati transaction.
In his ruling, Kirsch deemed the true sufferer of the fraud to be Fannie Mae. He stated JLL was not a sufferer because it repurchased the mortgage from Fannie Mae figuring out the mortgage was in misery and the property was in disrepair.
Kirsch stated JLL might nonetheless be awarded restitution as a result of it compensated the true sufferer, Fannie Mae, for its loss by buying the mortgage.
The restitution got here right down to $21.7 million after charges, escrow cash paid and the sale of the property for $60 million.
The elder investor
Schulman had argued that if the choose did award restitution, he ought to pay a lot much less.
Kirsch had gone simpler on Schulman on the sentencing listening to in March 2025, permitting him to self-surrender and sentencing him to only one 12 months in jail. (Drillman was given no jail time. Silber was sentenced to 30 months in jail, however was moved to a halfway house in December simply 9 months into his sentence.)
This time, Kirsch was not sympathetic to Schulman, who’s in his 70s.
Kirsch famous that Schulman was a lawyer, banker and enterprise capitalist who constructed a profitable profession and had claimed to be a mentor and father determine to Silber, who was practically 4 many years youthful.
“Regardless of ‘clearly being the grownup’ in that relationship and nicely versed within the fields of legislation and finance, Schulman didn’t use his fatherly function and wealth of expertise to advise Silber,” Kirsch stated.
As an alternative, he undertook an “energetic and integral” function within the fraud, Kirsch added.
Throughout his sentencing listening to, Kirsch allowed Schulman to give up to jail primarily based on sure upcoming household tasks, together with caring for his ailing spouse.
However the federal choose famous in his ruling that Schulman took benefit of the court docket’s beneficiant spirit… “over and time and again” by regularly touring to the Hamptons as a substitute of discovering take care of his ailing spouse.
Schulman and Silber’s lawyer didn’t return a request for remark. JLL additionally didn’t return a request for remark.
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