By Victoria Merlino
Four men — including two from Queens — were indicted Tuesday for conspiracy to commit wire fraud and bank fraud in connection to an alleged scheme to defraud mortgage lenders. Another alleged co-conspirator was arrested in Florida.
From December 2012 to January 2019, Iskyo Aronov, Michael Konstantinovskiy, Tomer Dafna, Avraham Tarshish and Michael Herskowitz allegedly misled mortgage lenders into approving real estate short sales at fraudulent prices, according to the indictment.
Konstantinovskiy is from Rego Park, and Tarshish is from Queens Village, according to the United States Attorney’s Office.
Short sales typically allow a loan borrower to sell their property for less than the balance of their loan, with the money from the sale going to the lender, such as a bank. The lender will then usually forgive the rest of the loan debt.
In this case, the five defendants allegedly sold properties for higher than the short sale price without disclosing it to the lenders. They also allegedly failed to properly market the properties, stopping other prospective purchasers from making higher bids, and provided the lenders false information.
“As alleged, the defendants defrauded mortgage loan holders out of millions of dollars, with taxpayers saddled with much of the loss,” said U.S. Attorney for the Eastern District of New York Richard Donoghue in a statement.
“This Office will continue working with our law enforcement partners to vigorously prosecute those who commit mortgage fraud and enrich themselves at the expense of the financial institutions and government programs that insure or guarantee the loans.”
The defendants, if convicted, face 30 years in prison and a $1 million fine.