Frederick Schulman indicted as real estate investors plead guilty to $119M loan fraud

In a recent Pittsburgh City Council meeting, significant discussions emerged surrounding the ongoing legal troubles of MB Affordable, a real estate company linked to serious allegations of fraud and neglect. The meeting highlighted the implications of these issues for residents living in properties managed by the company, particularly in the Hill District.

The meeting revealed that Frederick Schulman, the founder and CEO of MB Affordable, was indicted in federal court for his role in a conspiracy to fraudulently obtain substantial loans totaling $119 million. Alongside Schulman, two other real estate investors, Frederick Stroman and Haim Eli Peretz, pleaded guilty to conspiracy to commit wire fraud. This legal action stems from their efforts to deceive lenders between 2018 and 2020, raising concerns about the integrity of the housing market and the impact on vulnerable communities.

Residents of the Hill District, who have been living in deplorable conditions in properties owned by MB Affordable, took action by appealing to the U.S. Department of Housing and Urban Development (HUD). They reported severe issues, including black mold, rodent infestations, and raw sewage spilling into the streets. These living conditions prompted Allegheny County District Attorney Stevens Apala to classify Montview Heights, a property managed by MB Affordable, as a public nuisance. The company reportedly receives $233,000 monthly from HUD for this property, raising questions about the accountability of funds allocated for housing assistance.

In response to their plight, residents organized a press conference and reached out to HUD officials, demanding a meeting to address their living conditions. The district attorney has also filed felony charges against Montview LLC, a subsidiary of MB Affordable, further complicating the company's legal standing.

The discussions during the meeting underscored the urgent need for accountability in the housing sector, particularly for companies receiving public funds. As the situation develops, the community remains vigilant, advocating for better living conditions and transparency in the management of their homes. The council's engagement with these issues reflects a growing awareness of the intersection between housing, legal accountability, and community welfare in Pittsburgh.