TRENTON — Two Shore-area residents have pleaded guilty to their roles in a multimillion-dollar mortgage fraud scheme, and one also admitted illegally securing more than $1.8 million in federal COVID-19 disaster loans, Acting U.S. Attorney and Special Attorney Alina Habba announced.
Mendel Deutsch, 39, of Toms River, pleaded guilty Nov. 13 before U.S. District Judge Edward S. Kiel to one count of bank and wire fraud conspiracy and one count of wire fraud. Joshua Feldberger, 43, of Howell, pleaded guilty Oct. 22 to one count of bank fraud conspiracy, also before Judge Kiel.
According to court documents and statements made in court, the scheme began in June 2020, when co-defendant Arthur Spitzer conspired with Deutsch and Feldberger to falsely claim ownership of three Brooklyn properties. The men staged a fake real estate deal, allowing Deutsch to obtain a $4.5 million mortgage loan based on fabricated records.
Prosecutors said the group created phony escrow letters, forged documents showing property transfers, and lied to a mortgage lender by saying the settlement company — owned by Feldberger — had received more than $2 million from Deutsch at closing. The false claim triggered the release of loan funds, which were then used to cover Deutsch’s supposed down payment.
Federal authorities also said Deutsch fraudulently secured about $1.8 million in Economic Injury Disaster Loans (EIDL) in 2020 and 2021 by submitting applications for businesses with little or no actual operations. The applications included false statements about employee counts, revenues, expenses and losses.
The bank fraud conspiracy and bank-and-wire fraud conspiracy charges each carry a maximum sentence of 30 years in prison and a $1 million fine, or twice the gain or loss from the offense. The wire fraud charge carries a maximum of 20 years in prison and a $250,000 fine, or twice the gain or loss.
Feldberger is scheduled for sentencing Feb. 23, 2026. Deutsch is set to be sentenced March 16, 2026.
Habba credited the FBI’s Atlantic City Resident Agency, IRS–Criminal Investigation, and the FDIC Office of Inspector General for their work on the case. The government is represented by Assistant U.S. Attorneys Daniel A. Friedman and Elisa T. Wiygul of the Criminal Division in Camden.
Charges against Spitzer remain pending. He is presumed innocent unless proven guilty.
