Michael Fein, Wire Fraud and Bank Fraud, Missouri 2023

Loan Scandal Rocks St. Louis Real Estate Scene

A high-stakes loan scandal has rocked the St. Louis real estate scene, with Michael Fein, the managing partner of T.E.H. Realty, facing two felony charges of wire fraud and bank fraud. According to court documents, Fein allegedly submitted false documents to lenders in order to secure millions of dollars in loans for various multi-family apartment complexes.

The indictment alleges that between 2016 and 2018, Fein, on behalf of a T.E.H. affiliated company, entered into an agreement for the purchase of the Pinnacle Ridge apartment complex in the St. Louis, Missouri area. In order to purchase Pinnacle Ridge, Fein applied for and obtained a $2,800,000 loan from a financial institution lender. In order to obtain the loan, Fein submitted false documents to the lender, including substantially inflated rent rolls for Pinnacle Ridge, inflated income statements for Pinnacle Ridge, and inflated summaries of real estate purportedly owned by T.E.H. affiliated companies.

Between 2016 and 2017, Fein, on behalf of a T.E.H. affiliated company, applied for and obtained a $12,500,000 refinance loan from a financial institution and Fannie Mae (the Federal National Mortgage Association) to refinance the outstanding loan on the Green Village apartment complex in the Kansas City, Missouri area. A T.E.H. affiliated company owned and managed Green Village. In order to obtain the refinance loan, Fein submitted false documents to the lender and Fannie Mae, including inflated rent rolls for Green Village which falsely inflated the occupancy rates for Green Village, and false operating statements which inflated the rental income for Green Village.

During 2017, Fein, on behalf of a T.E.H. affiliated company, applied for and obtained a $7,700,000 refinance loan from a financial institution and Freddie Mac (the Federal Home Loan Mortgage Corporation) to refinance the outstanding loan on the Ivy Place apartment complex in the Tulsa, Oklahoma area. A T.E.H. affiliated company owned and managed Ivy Place. In order to obtain the refinance loan, Fein submitted false documents to the lender and Freddie Mac, including inflated rent rolls for Ivy Place which falsely inflated the occupancy rates for Ivy Place, and false operating statements which inflated the total property income for Ivy Place.

The indictment alleges that Fein's false representations and documents led to the closure of the loans, with Fein and the T.E.H. affiliated company taking over ownership and management of the complexes. The total amount of the loans was $28,000,000.

Fein's indictment highlights the ongoing issue of loan fraud in the real estate industry, with millions of dollars being bilked from lenders and investors.

The case is currently ongoing, and Fein's status is not yet known. The charges carry a maximum penalty of 30 years in prison and a $1,000,000 fine.

Source: https://www.justice.gov/usao-edmo/pr/managing-partner-teh-realty-indicted-wire-fraud-and-bank-fraud-tied-twenty-eight