CINCINNATI — The owner of an apartment complex in Hartwell has pleaded guilty to federal mortgage fraud.
Boruch "Barry" Drillman, the owner of the Williamsburg Apartments, pleaded guilty to "engaging in a conspiracy to fraudulently obtain more than $165 million in loans and fraudulently acquire real estate properties," according to the U.S. Department of Justice (DOJ).
He pleaded to one count of conspiracy to commit wire fraud affecting a financial institution.
The DOJ said Drillman, who lives in New York, conspired with at least four other people to deceive lenders into issuing mortgage loans for multifamily and commercial properties. To do so, Drillman and his co-conspirators, who were from Rhodium Capital Advisors, used fake documents, including contracts with inflated purchase prices, the DOJ said.
Drillman acquired the Williamsburg Apartments complex in 2019 for $70 million. The DOJ said Drillman used a stolen identity to present both a lender and Fannie Mae, the Federal National Mortgage Association, with a contract for $95.85 million. When Drillman acquired the complex in 2019, there were two closings: one for the true $70 million and another for the fake $95.85 million sale.
He and his co-conspirators did something similar with another property in Troy, Michigan.
Two of the Williamsburg Resident Association founders said Drillman pleading guilty is a step in the right direction.
“I thought that would never happen or they would admit to any of that," Michelle Jenkins said.
"The bank wins because he’s (pleaded) guilty, but the bank is guilty because you continued and continued to loan him the money but you didn’t follow up on what your consumer was doing with the dollars," Rhonda Berry-Dear said.
The women no longer lead the association, but they are both still in contact with people who live there. Both of them have moved out.
“We need ordinances where we can look at the financial records of these outside owners coming in and purchasing properties," Berry-Dear said. "We need to ensure they have the adequate staff to manage these properties and what has been their previous history in other locations."
Jenkins said she hopes the city will take action against out-of-town property owners who neglect their properties.
In January 2023, the City of Cincinnati sued Drillman after more than 1,000 tenants reported flooding, lack of heat and rodent infestations went unattended by the complex. That public nuisance lawsuit was combined with a foreclosure case filed by Fannie Mae.
Berry-Dear said the lawsuit doesn't compensate the residents. She believes it should.
“What happens to those of us who were victimized by this gentleman," she said. “The residents need to be compensated. They’ve gone through months and years of slumlord management.
RELATED | Hartwell apartment tenants vote to hire lawyers, threaten lawsuit against property management
Mayor Aftab Pureval said the Williamsburg Apartment complex had "conditions that no human being should live in." The city also formed a task force to address neglect by landlords citywide.
Pureval cited two major incidents that spurred the city to act: A water line break at the end of November 2022 that left residents without water for four days and additional water issues alongside a lack of heat during the end of December 2022.
When WCPO 9 spoke with Ed Cunningham, deputy director of Cincinnati's Department of Buildings and Inspections, in January he said there were 70 cases involving Williamsburg, with 230 active violations and four orders to vacate.
In June, a Hamilton County judge ruled to establish new management at the complex as the lawsuit plays out. Columbus-based commercial real estate company Newmark took over control of the complex and a receiver, or temporary property manager, was appointed by the judge.
Drillman is scheduled to be sentenced on April 16, 2024, and faces a maximum of five years in prison.
Watch Live:
