A Brooklyn developer accused of fleecing dozens of Lubavitcher families in a massive subprime mortgage fraud scheme took cover behind a divine defense on Tuesday.
The developer’s lawyer told jurors his client received “a blessing” from the late Lubavitcher Rebbe to build affordable housing for the Lubavitcher community in Crown Heights.
“It was a mitzvah to him, a Hebrew word that means a good deed and an obligation,” defense lawyer Susan Necheles said in her opening statement in Brooklyn Federal Court.
Assistant U.S. Attorney William Schaeffer said the developer was nothing but a crook who scammed $2.6 million from condominium buyers and more than $10 million from banks.
Prosecutors built a criminal case against him after the Daily News revealed in 2008 how he allegedly conned buyers into purchasing condos, then refused to hand over the deeds when the construction was completed.
Instead, he allegedly gave the deeds to family members – including his wife, father and mother – who applied for mortgages on condos the victims thought they owned.
Although he had the grand rebbe’s blessing, he needed cash to build and that’s where the investors came in, Necheles argued.
She said the so-called victims are sore losers trying to use the criminal justice system to recoup their investment losses.
The government’s first witness appeared confused by the contracts and promissory notes.
(Source: NY Daily News)