“Who the hell did he snitch on?” Minutes earlier, a federal judge in an NJ courtroom had handed down the bombshell verdict: Barry Drillman, the man at the center of the mortgage-fraud scandal that has put the CRE and agency-lending worlds on blast, would face no prison time. Zero, zilch – just 5Y probation and a $250K fine. Compared to what his co-conspirators got, it was bupkes.

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“There are no words sufficient to express how sorry I am,” Drillman said to his family before the sentencing. “Your love is the only thing that kept me from losing hope.” 💗 (This btw is per TRD’s Katie Brenzel, who told me she went through a “comical amount of sharpened pencils” ✏ to capture the drama in the no-tech courtroom 📵) Drillman also said that his deeds – inflating purchase prices on 2 deals in order to score fatter loans 🎈 – “tarnished the Jewish people,” and pledged to “live a life that brings healing instead of harm.” In a final oratorical flourish, he dabbed his eyes w/ a tissue 🥹

Judge Robert Kirsch, the lyrical gangsta who saw Drillman’s co-schemers in a far harsher light (see Snapple chart 👆 ), cited as mitigating factors Drillman’s co-operation w/ investigators (FHFA special agent Lars Hansen 🤝 Drillman prior to the hearing), his poor health, & what he saw as his genuine remorse. Drillman’s attorney, prominent criminal defense lawyer Jeffrey Lichtman, painted his client as a patsy for the Puretzes. “He was certainly a very willing dupe,” Lichtman said. He noted that his client recorded a conversation w/ Eli Puretz detailing the scheme and later, when he felt the heat on him, asked that it be proactively sent to investigators. 📼

“In 35 years, I’ve never seen it happen where somebody’s turned over such a crucial piece of evidence that caused four guilty pleas,” Lichtman told TRD. “And we expected nothing.”

Drillman was the first to plead guilty in late ‘23, and was the last to be sentenced. The fallout from the case has been massive: title insurance firms (Madison, Riverside Abstract) have been blacklisted, and the ensuing agency crackdown on mortgage fraud has ensnared brokerages, attorneys, and appraisers, culminating in bloodletting at the agencies themselves. Meanwhile, those casinos in Seminole better be ready… Barry Drillman is coming for ya 🎰 🎲 🚬 🃏

“To do affordable housing, you need to have immense juice. You need to be connected up the wazoo with leaders in that city/state. And Ron Moelis is one of the most connected men in New York.” 🧃 🗽
“If you're doing this at scale, it's just dev fees coming in left and right. And that's almost more important than the deal's actual cash flows.” 🌊
“There's like nine people in San Francisco who matter and so if you just do the thing that makes them happy it makes everything easier.” 🌉

In Ep. 15 of The Promote Podcast, Will & Hiten dive deep into the movement of the moment: AUM gobbling ™ We break down the Sixth Street/L+M transaction and how allocator preferences are driving this wave of M&A. We then look at restaurateur Greg Flynn’s 🌮 basis bets in the SF market – a man w/ deep pockets ™ feasting on bargains by the Bay. And finally, we tackle the financialization of the American Dream – i.e. USIF’s new lender-assisted EB-5 vehicle. Spotify here, Apple here, and YouTube here. For advertising, here. Please rate us & write a review if you like what you hear - we’re a Top 100 Business pod on Apple, and fancy cracking the Top 50 next. 🙏

Cleared for takeoff by Freddie after a Y+ on the tarmac, Meridian Capital Group took to the skies with one of its biggest & most loyal clients. It announced Monday that it brokered a $173M Freddie refi for the Monterey, a 522-unit rental on the UES. The sponsor? The 🐐 Ruby Schron, of Cammeby’s International.

“It shows to the market that we’re not just technically back in the agency market, we are really back in a big way,“ Meridian CEO (and 🪑) Brian Brooks told CO. “It’s not just that somebody said we can do it, we are executing on it.” The firm wanted to relaunch that arm of the business w/ a splash, Brooks said, and spent 3 mos. trying to “find the right deal” w/ the right sponsor. Left unsaid was that this was the right lender, too – NewPoint is, for now, a Meridian-owned joint; it’s slated to be handed over to buyer Benefit Street Partners in Q3. Also curious how much add’l headache the Freddie-imposed “special process” was for the lender here; Meridian-brokered loans come w/ add’l loan repurchase rights & extra DD, as The Promote reported in Oct..

The show-of-faith announcement by a client who matters was preceded by another, more personal declaration of that faith. Last week, Schron gave a rare public talk, sitting down w/ Meridian founder (and Sr. 🪑) Ralph Herzka at the raucous ReDeal conference at an NJ 🏰. Between dispensing life lessons & yarns from his HoF career, Schron made sure to praise Herzka for shepherding him through important transactions 🙏 “You always exceeded many of my expectations, as far as the financing, as far as the introductions [to] different people,” Schron said. Herzka’s been his go-to deal guy forever, w/ Meridian brokering the $250M BofA refi of the Woolworth Building in ‘05, the Freddie debt for a $1B NJ workforce housing purchase in ‘21, and the $250M+ construction financing from a Valley National Bank-led consortium for his Neptune Ave project in ‘23. And this is Meridian’s 2nd crack at the Monterey – it also brokered the $155M acquisition financing for Schron’s purchase in ‘12. 🛀

The big Q now: Will this deal indeed open the Freddie floodgates – “once you’re scoring you’re scoring,” is how Brooks put it – for Meridian? Or was it merely a stalwart doing a solid for an old friend?

Bonus: More on Meridian’s agency freedom on the pod here

Could there soon be a Smurf blue Rolls-Royce Cullinan on the Maryland used-car market? Creditors are upping the ante in their dispute w/ Baltimore developer Brandon Chasen, moving to force a Chapter 7 bankruptcy that would compel Chasen to liquidate his possessions to pay them back. The petitioners, per the Banner, include Sandy Spring Bank, which gave Chasen’s firm $34M for an office-resi conversion of downtown’s One Calvert Plaza. After defaulting on the loan, Chasen Cos. transferred the company’s Gulfstream G200 🛫 to a trustee w/o making good on its payments. The fallout from Chasen’s troubles extends beyond lenders to tenants, contractors, the utility cos., and to the taxman. Meanwhile, the firm’s development projects x the city remain in limbo – we’re guessing the whole “adjusted for longevity” thing didn’t work out. 🧖‍♂