2 N.J. men convicted in $4.5M million mortgage scam

Two New Jersey men admitted that they scammed a mortgage lender to obtain a $4.5 million loan by faking the sale of a property with forged and phony documents.

In addition, one of the men also admitted he lied to obtain a $1.8 million loan by lying on government loan applications during the COVID-19 pandemic.

Mendel Deutsch, 39, of Toms River, pleaded guilty to one count of bank and wire fraud conspiracy as well as wire fraud, the U.S. Attorney’s Office for New Jersey said.

Joshua Feldberger, 43, of Howell pleaded guilty to bank fraud conspiracy.

In an elaborate scheme, Arthur Spitzer worked with Deutsch and Feldberger to make it appear as if Spitzer owned three properties in Brooklyn, New York.

Deutsch applied and received a $4.5 million mortgage loan for the phony purchase.

Feldberger helped move the fraudulent sale along as the owner of the settlement company that handled the transaction.

Deutsch and Feldberger then forged letters claiming that Deutsch had deposited significant funds into escrow toward the transaction when in reality, he paid nothing, federal prosecutors said.

The pair then drew up more phony paperwork claiming they transferred control of the properties to Spitzer.

Meanwhile, the men falsely told the mortgage lender the settlement company had received more than $2 million from Deutsch at closing. That prompted the mortgage lender to fund the loan.

The pair then used the mortgage loan proceeds to fund Deutsch’s down payment — the same down payment he had claimed to already provide.

The mortgage lender is not named by prosecutors.

Charges against Spitzer are pending.

Spitzer, of Toms River, was charged with eight counts of wire fraud, one count of bank fraud, one count of bank and wire fraud conspiracy, two counts of aggravated identity theft, one count of lying to a bank and 12 counts of money laundering.

Feldberger is scheduled to be sentenced on February 23, 2026 with Deutsch sentencing set for March 16, 2026.

In a separate scam, Deutsch submitted Economic Injury Disaster Loans applications in 2020 and 2021 in which he fabricated the number of people he employed and how much revenue the business generated. He obtained about $1.8 million in loans.

During the pandemic, the government provided loans to small businesses to help keep them afloat.