T.E.H. Realty managing partner indicted for wire fraud, bank fraud

Missouri
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ST. LOUIS – An owner of an apartment management company facing numerous complaints in St. Louis and Kansas City appeared in US federal court Thursday following an indictment of wire and bank fraud.

The fraud claims are tied to tens of millions of dollars in bank loans for the purchase and operation of apartment complexes in Kansas City, St. Louis, and elsewhere.

According to the indictment, Michael Fein was an owner and vice president of T.E.H. Management, and an owner and manager of several T.E.H.-affiliated companies that operated rental properties throughout the country. Fein was said to be responsible for the day-to-day operations of T.E.H. Management and those affiliated companies.

T.E.H. owned and operated the Pinnacle Ridge complex in the St. Louis area, the Green Village Townhomes apartment complex in Kansas City, and Ivy Place Apartments in Tulsa, Oklahoma.

Between 2016 and 2018, Fein, acting on behalf of a T.E.H. affiliated company, agreed to purchase the Pinnacle Ridge apartment complex and applied for a $2.8 million bank loan to complete the deal. Federal prosecutors allege Fein submitted false documents to the lender and inflated financial information tied to the apartment complex in order to obtain said loan. The loan was ultimately approved, and Fein and T.E.H. took over ownership and management of Pinnacle Ridge.

Similar instances of using falsified information to obtain loans occurred in Kansas City and Tulsa, prosecutors said.

In 2019, Fein applied for a $5.225 million bank loan insured by the Federal Housing Administration (FHA) to purchase the Hanley Crossings apartment complex. Fein allegedly inflated occupancy rates of 26 of the multi-family apartment units by approximately 18 percent each. However, the loan was ultimately not funded by the lender and FHA.

In March 2020, following numerous tenant complaints about substandard living conditions in T.E.H.-owned properties, the federal government suspended all taxpayer-subsidized housing contracts and funding to T.E.H. and its affiliates in the St. Louis and Kansas City areas. The federal government offered low-income tenants living in those units transfer vouchers to help them find appropriate housing.

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