A 39-year-old Toms River real estate investor has pleaded guilty to federal charges stemming from a multimillion-dollar mortgage fraud scheme that targeted properties in Brooklyn, along with a separate scheme to fraudulently obtain COVID-19 relief funds meant for struggling small businesses. Arthur Spitzer entered guilty pleas to one count of bank and wire fraud conspiracy and one count of money laundering, admitting his role in a conspiracy that put real property owners at risk of losing their homes to foreclosure.
According to U.S. Attorney Robert Frazer, Spitzer participated in a scheme that began in June 2020, when he conspired with Mendel Deutsch and Joshua Feldberger to defraud a mortgage lender out of $4.5 million tied to three properties in Brooklyn's Bedford-Stuyvesant neighborhood. As reported by NBC10 Philadelphia, prosecutors say Spitzer made it appear that he owned the three properties and had agreed to sell them to Deutsch, when in fact the men had created fake documentation to falsely transfer control of the properties to Spitzer in the first place. The properties involved included addresses at 306 and 308 Malcolm X Boulevard, according to The Real Deal.
Feldberger facilitated the fraudulent transaction as the owner of the settlement company that handled the deal, prosecutors say — that company being Universal Abstract, a title insurance and settlement agency based in Lakewood, New Jersey, industry outlet Marketproof has reported. With the fake paperwork in place, Deutsch obtained a $4.5 million mortgage loan, and the trio made false statements to the lender claiming the settlement company had received more than $2 million from Deutsch at closing. Those false statements led the lender to fund the loan, and the proceeds were then used to cover Deutsch's supposed down payment, which had never actually been paid. The lender defrauded in the transaction was ConnectOne Bank, per The Real Deal's reporting.
A Pattern of Forged Deals Across Two States
The Bedford-Stuyvesant transaction was not an isolated incident. Officials say Spitzer was also responsible for losses tied to five additional fraudulent loan schemes carried out in 2019 and 2020, which together totaled more than $10 million. As part of that broader pattern, Spitzer, Deutsch and Feldberger created and sent letters falsely stating that Deutsch had deposited significant funds into escrow accounts that in reality held no such money.
Federal prosecutors previously detailed that the wider scheme involved identifying properties in New Jersey and Brooklyn that carried little or no existing mortgage debt, then forging the true owners' signatures to secure loans against those properties, according to the Department of Justice. The loans were then allowed to default, exposing the legitimate property owners to the threat of foreclosure and eviction, even though they had no knowledge the fraudulent loans existed.
A Second Scheme Exploited Pandemic Relief Funds
Beyond the mortgage fraud, Spitzer also fraudulently obtained approximately $1.8 million in government loans intended for small businesses distressed by the COVID-19 pandemic, according to U.S. Attorney Robert Frazer. He obtained Economic Injury Disaster Loans, which carried a maximum loan amount of $2 million, for businesses that had little or no actual operations. Qualifying small businesses were required to submit applications detailing information about their operations, employees, revenues or expenses, but officials say Spitzer submitted applications containing false statements about employee counts, revenues, cost of goods sold or lost rents. He also laundered some of the proceeds from the EIDL fraud, according to officials.
The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, had authorized the Small Business Administration to provide Economic Injury Disaster Loans to eligible small businesses struggling amid pandemic shutdowns. Spitzer's case is part of a much larger national pattern: a June 2023 report by the SBA Office of Inspector General estimated that more than $200 billion — roughly 17% of all COVID-19 EIDL and Paycheck Protection Program funds disbursed — went to potentially fraudulent applicants, out of more than $1.1 trillion in total pandemic relief funds distributed nationwide, per the Congressional Research Service.
That kind of delayed reckoning is possible because Congress passed the COVID-19 EIDL Fraud Statute of Limitations Act in August 2022, extending the window for prosecuting Economic Injury Disaster Loan fraud from five years to ten, the Congressional Research Service notes. The extension applies to both criminal prosecutions and civil enforcement actions, which explains why loans issued in 2020 and 2021 are still generating federal charges years later. As Hoodline has reported, federal prosecutors nationwide had charged more than 3,000 defendants in COVID-19 pandemic relief fraud cases through late 2024, achieving an 82% conviction rate, with more than 80% of those convicted receiving federal prison time.
Co-Defendants Already Pleaded Guilty
Spitzer was the last of the three co-defendants to reach a plea agreement. Feldberger pleaded guilty to bank fraud conspiracy on October 22, 2025, and Deutsch pleaded guilty to bank and wire fraud conspiracy on November 13, 2025, both admitting their roles before U.S. District Judge Edward S. Kiel, according to the FDIC Office of Inspector General. Deutsch is scheduled to be sentenced on October 6, 2026, while Feldberger is still awaiting a new sentencing date.
Bank and wire fraud conspiracy carries a maximum penalty of 30 years in prison and a $1 million fine, while money laundering carries a maximum of 10 years in prison and a $250,000 fine. As part of his plea, Spitzer agreed to pay $1 million to the true owner of the Brooklyn properties and at least $1,845,400 to the SBA, and he agreed to pay full restitution to victims of the scheme. He further agreed to forfeit $2.25 million connected to the bank and wire fraud conspiracy and an additional $100,000 tied to laundering the fraudulent EIDL proceeds, for a total forfeiture of $2.35 million. Spitzer is scheduled to be sentenced on December 21, 2026.
The case fits into a broader joint enforcement push by the Department of Justice and the Federal Housing Finance Agency targeting commercial mortgage fraud schemes built on falsified ownership records and inflated financials, The Real Deal reports, with regulators increasingly focused on non-owner property claims and related-party transactions across the region's commercial real estate market.
