LOS ANGELES—A former San Luis Obispo real estate broker pleaded guilty today to orchestrating a property “flipping” scheme in which he purchased houses in short sales at artificially low prices and immediately resold the properties at their true market values.
Timothy William Barnes, 37, who now resides in San Francisco, pleaded guilty to one count of bank fraud, a federal offense that carries a statutory maximum penalty of 30 years in federal prison.
Barnes owned and operated Apex Properties Real Estate Brokerage Inc. in San Luis Obispo. Between January 2010 and September 2012, Barnes purchased properties after banks gave approval for short sales. In short sales, banks agree to accept less money than the outstanding balance on a mortgage, usually because the property is “under water,” meaning that the value of the property has fallen below the amount remaining on the mortgage. The lenders authorized the short sales after Barnes minimized the value of the houses and concealed higher offers he had already received. To carry out his scheme, Barnes made false statements about the fair market value of the properties in the documents he submitted to the banks.
Barnes admitted that, in many cases, he had already negotiated the resale at the higher price while he was simultaneously negotiating the short sale of the property at the lower price.
Barnes used this scheme to flip properties in San Luis Obispo, Paso Robles, Pismo Beach, and other cities on the Central Coast, earning profits of more than $500,000.
Barnes is scheduled to be sentenced by United States District Judge Stephen V. Wilson on June 16.
This case was investigated by the Federal Bureau of Investigation and the Federal Housing Finance Agency, Office of Inspector General.
Showing posts with label real estate. Show all posts
Showing posts with label real estate. Show all posts
Thursday, March 6, 2014
Wednesday, February 26, 2014
Leader of Massive Real Estate Fraud Scheme Sentenced to 22 Years in Prison for Fraud and Money Laundering
TRENTON, NJ—An Ocean County, New Jersey man was sentenced today to 264 months in prison for running a real estate investment fraud scheme that caused $200 million in losses and laundering the proceeds of the scheme, U.S. Attorney Paul J. Fishman announced.
Eliyahu Weinstein, a/k/a “Eli Weinstein,” a/k/a “Edward Weinstein,” a/k/a “Eddie Weinstein,” 38, of Lakewood, New Jersey, previously pleaded guilty before U.S. District Judge Joel A. Pisano to two counts of an indictment charging him with conspiracy to commit wire fraud and money laundering. Weinstein’s co-defendant, Vladimir Siforov, is charged in the indictment with three counts of wire fraud and remains a fugitive. According to documents filed in this case and statements made in court:
From June 2004 through August 2011, Weinstein orchestrated—with the help of Siforov and others—a real estate investment fraud scheme headquartered in Lakewood that resulted in multi-million-dollar losses to victim investors.
To induce victims to invest, Weinstein and others made various types of materially false and misleading statements and omissions. Weinstein and others told victims that Weinstein’s inside access to certain real estate opportunities allowed him to buy a particular piece of property at a below-market price. Weinstein and others also told victims that their money would be used to purchase a specific property, and the property would be quickly resold—or “flipped”—to a third-party purchaser that Weinstein had lined up. Victims were also told that the victims’ money would be held in escrow until the closing of a purported real estate transaction.
Weinstein bolstered his lies by creating and causing to be created various types of fraudulent documents, including “show checks,” which Weinstein led victims to believe represented Weinstein’s investments in specific transactions but which in fact were never deposited; forged checks, which had actually been negotiated for small amounts but which Weinstein altered so as to appear worth millions of dollars; and various kinds of phony legal documents, including mortgages and deeds.
Weinstein and others initially targeted victims from the Orthodox Jewish community to which Weinstein belonged, exploiting his standing in and knowledge of the customs and practices of this community to further the scheme. Weinstein abused the Orthodox community’s practice of engaging in transactions based on trust, and without paperwork, to obtain money from his victims without substantial written records. He would then falsely represent that specific real estate transactions existed, that the victims’ monies were used to fund those transactions, or that the victims’ profits from those transactions were being “rolled” into new investments. Weinstein also used a portion of the fraud’s proceeds to fund “charitable and religious contributions,” which he used to elevate his reputation within the Orthodox Jewish community.
By 2010, Weinstein had tarnished his reputation in the Orthodox Jewish community due to the massive losses caused by his fraud scheme and found it difficult to obtain more money to further the scheme from within the community. In April 2010, Weinstein and others began soliciting victims from outside of the Orthodox Jewish community, whom they defrauded of additional millions of dollars.
Weinstein also used millions of dollars fraudulently obtained from his victims to fund his own lavish spending, including millions of dollars’ worth of antique Judaica and other artwork; a multi-million-dollar collection of jewelry and watches; gambling in Las Vegas and elsewhere; and Weinstein’s personal expenses, including millions of dollars in credit card bills, millions of dollars in legal bills, and luxury car lease payments.
In addition to the prison term, Judge Pisano sentenced Weinstein to three years of supervised release. Judge Pisano ordered Weinstein to pay restitution of $215.4 million and forfeiture of $215.4 million.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s sentence. He also credited agents of IRS–Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, for their important contributions to the investigation.
The government is represented by Assistant U.S. Attorneys Zach Intrater, Gurbir S. Grewal, Rachael A. Honig, and Evan Weitz.
The charges and allegations against Siforov are merely accusations, and he is considered innocent unless and until proven guilty.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
Eliyahu Weinstein, a/k/a “Eli Weinstein,” a/k/a “Edward Weinstein,” a/k/a “Eddie Weinstein,” 38, of Lakewood, New Jersey, previously pleaded guilty before U.S. District Judge Joel A. Pisano to two counts of an indictment charging him with conspiracy to commit wire fraud and money laundering. Weinstein’s co-defendant, Vladimir Siforov, is charged in the indictment with three counts of wire fraud and remains a fugitive. According to documents filed in this case and statements made in court:
From June 2004 through August 2011, Weinstein orchestrated—with the help of Siforov and others—a real estate investment fraud scheme headquartered in Lakewood that resulted in multi-million-dollar losses to victim investors.
To induce victims to invest, Weinstein and others made various types of materially false and misleading statements and omissions. Weinstein and others told victims that Weinstein’s inside access to certain real estate opportunities allowed him to buy a particular piece of property at a below-market price. Weinstein and others also told victims that their money would be used to purchase a specific property, and the property would be quickly resold—or “flipped”—to a third-party purchaser that Weinstein had lined up. Victims were also told that the victims’ money would be held in escrow until the closing of a purported real estate transaction.
Weinstein bolstered his lies by creating and causing to be created various types of fraudulent documents, including “show checks,” which Weinstein led victims to believe represented Weinstein’s investments in specific transactions but which in fact were never deposited; forged checks, which had actually been negotiated for small amounts but which Weinstein altered so as to appear worth millions of dollars; and various kinds of phony legal documents, including mortgages and deeds.
Weinstein and others initially targeted victims from the Orthodox Jewish community to which Weinstein belonged, exploiting his standing in and knowledge of the customs and practices of this community to further the scheme. Weinstein abused the Orthodox community’s practice of engaging in transactions based on trust, and without paperwork, to obtain money from his victims without substantial written records. He would then falsely represent that specific real estate transactions existed, that the victims’ monies were used to fund those transactions, or that the victims’ profits from those transactions were being “rolled” into new investments. Weinstein also used a portion of the fraud’s proceeds to fund “charitable and religious contributions,” which he used to elevate his reputation within the Orthodox Jewish community.
By 2010, Weinstein had tarnished his reputation in the Orthodox Jewish community due to the massive losses caused by his fraud scheme and found it difficult to obtain more money to further the scheme from within the community. In April 2010, Weinstein and others began soliciting victims from outside of the Orthodox Jewish community, whom they defrauded of additional millions of dollars.
Weinstein also used millions of dollars fraudulently obtained from his victims to fund his own lavish spending, including millions of dollars’ worth of antique Judaica and other artwork; a multi-million-dollar collection of jewelry and watches; gambling in Las Vegas and elsewhere; and Weinstein’s personal expenses, including millions of dollars in credit card bills, millions of dollars in legal bills, and luxury car lease payments.
In addition to the prison term, Judge Pisano sentenced Weinstein to three years of supervised release. Judge Pisano ordered Weinstein to pay restitution of $215.4 million and forfeiture of $215.4 million.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s sentence. He also credited agents of IRS–Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, for their important contributions to the investigation.
The government is represented by Assistant U.S. Attorneys Zach Intrater, Gurbir S. Grewal, Rachael A. Honig, and Evan Weitz.
The charges and allegations against Siforov are merely accusations, and he is considered innocent unless and until proven guilty.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
Thursday, January 23, 2014
Maryland Man Sentenced to 12 Years in Prison for Real Estate Fraud
ALEXANDRIA, VA—Colin Conroy Williams, 42, of Dayton, Maryland, was sentenced today to 12 years in prison, followed by three years of supervised release, for serving as the mastermind of a multi-year conspiracy to commit real estate fraud.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia, and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after sentencing by United States District Judge Gerald Bruce Lee.
Williams pleaded guilty on October 28, 2013, to conspiracy to commit wire fraud, wire fraud, aggravated identity theft, and money laundering. According to court records, much of Williams’ criminal activity involved fraudulently selling homes that did not belong to the purported property owner. As part of this scheme, Williams first would identify vulnerable properties based on several characteristics—for example, because the property had significant tax liabilities, the true owners lacked a sophisticated understanding of real estate transactions, or the true titleholder had died recently and the rightful heirs had not come forward to claim the property.
Williams used a variety of means to identify the vulnerable properties. He sometimes would visit the D.C. tax courts to identify properties with overdue property tax bills, which was an indication that the rightful owner was not alive or able to pay those tax bills. In other instances, Williams would use open source or subscription services, such as ancestry.com and the D.C. property tax database, to determine whether a particular property was owned by a recently deceased person and whether that person had any living or nearby relatives.
After identifying vulnerable properties, Williams would manipulate the District of Columbia Probate Court process to have a co-conspirator appointed as a “personal representative” for the rightful owner. Williams then would arrange for that newly appointed representative to sell the property without the rightful owner’s knowledge. In so doing, Williams stole multiple identities belonging to the living or recently deceased property owners.
Williams conducted this scheme on at least five homes, including after he knew that he was under investigation by the FBI. He also conducted this scheme despite knowing that two of the actual homeowners were alive. Nevertheless, once the properties were sold, Williams would keep hundreds of thousands of dollars in proceeds for himself, which he laundered to buy expensive cars and fancy jewelry.
Before Williams began conducting this “personal representative” scheme, he repeatedly engaged in more conventional real estate fraud, including directing co-conspirators to lie on loan documents and placing false liens on homes to force his victims to pay him thousands of dollars before they could sell their homes. All told, Williams defrauded numerous victims of more than $1,700,000 in actual and intended losses.
This case was investigated by the FBI’s Washington Field Office. Assistant United States Attorneys Chad Golder and Kosta Stojilkovic prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia, and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after sentencing by United States District Judge Gerald Bruce Lee.
Williams pleaded guilty on October 28, 2013, to conspiracy to commit wire fraud, wire fraud, aggravated identity theft, and money laundering. According to court records, much of Williams’ criminal activity involved fraudulently selling homes that did not belong to the purported property owner. As part of this scheme, Williams first would identify vulnerable properties based on several characteristics—for example, because the property had significant tax liabilities, the true owners lacked a sophisticated understanding of real estate transactions, or the true titleholder had died recently and the rightful heirs had not come forward to claim the property.
Williams used a variety of means to identify the vulnerable properties. He sometimes would visit the D.C. tax courts to identify properties with overdue property tax bills, which was an indication that the rightful owner was not alive or able to pay those tax bills. In other instances, Williams would use open source or subscription services, such as ancestry.com and the D.C. property tax database, to determine whether a particular property was owned by a recently deceased person and whether that person had any living or nearby relatives.
After identifying vulnerable properties, Williams would manipulate the District of Columbia Probate Court process to have a co-conspirator appointed as a “personal representative” for the rightful owner. Williams then would arrange for that newly appointed representative to sell the property without the rightful owner’s knowledge. In so doing, Williams stole multiple identities belonging to the living or recently deceased property owners.
Williams conducted this scheme on at least five homes, including after he knew that he was under investigation by the FBI. He also conducted this scheme despite knowing that two of the actual homeowners were alive. Nevertheless, once the properties were sold, Williams would keep hundreds of thousands of dollars in proceeds for himself, which he laundered to buy expensive cars and fancy jewelry.
Before Williams began conducting this “personal representative” scheme, he repeatedly engaged in more conventional real estate fraud, including directing co-conspirators to lie on loan documents and placing false liens on homes to force his victims to pay him thousands of dollars before they could sell their homes. All told, Williams defrauded numerous victims of more than $1,700,000 in actual and intended losses.
This case was investigated by the FBI’s Washington Field Office. Assistant United States Attorneys Chad Golder and Kosta Stojilkovic prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae.
Tuesday, November 19, 2013
Fraudster Sentenced to Nine Years in Prison in Real Estate Scheme
San Diego County District Attorney Bonnie Dumanis and FBI Special Agent in Charge Daphne Hearn announced today that Timothy Mark Brachmanis was sentenced to nine years and eight months in state prison and was ordered to pay more than $3.7 million in restitution and fines for stealing millions of dollars in real estate investment scheme.
Brachmanis, 44, pleaded guilty in August to three counts of grand theft, a violation of the tax code, and he admitted the aggravated white-collar crime enhancements. He was sentenced by Superior Court Judge Frederic L. Link. Brachmanis was originally charged with 46 counts including grand theft, diversion of construction funds, sale of an unqualified security, using false statements in the sale of a security, filing a fraudulent income tax return, and allegations of aggravated white-collar crime enhancements.
“This defendant preyed on victim after victim eventually bilking them out of more that $3 million,” DA Dumanis said. “Deputy District Attorney Hector Jimenez of our Economic Crimes Division and the prosecution team did an outstanding job prosecuting this case and working with our law enforcement partners to help obtain a measure of justice for the victims.”
“Today’s sentencing sends a clear message to those who would defraud the public through deceit and false claims,” said FBI Special Agent in Charge Daphne Hearn. “The FBI and our law enforcement partners will aggressively pursue you and stop you from lining your pockets at the expense of others.”
Brachmanis claimed to be a real estate investment attorney who solicited unsuspecting victims to invest in a variety of properties which he said would be developed and later sold at a profit. Brachmanis convinced the victims that he would be an equal partner in some of the investments, but he instead used the victims’ money only as a down payment. Brachmanis diverted investors’ money to other projects and in some cases took the money for himself.
This case was the result of a joint investigation with the Federal Bureau of Investigation (FBI), San Diego County District Attorney’s Office, and the California Franchise Tax Board.
Brachmanis, 44, pleaded guilty in August to three counts of grand theft, a violation of the tax code, and he admitted the aggravated white-collar crime enhancements. He was sentenced by Superior Court Judge Frederic L. Link. Brachmanis was originally charged with 46 counts including grand theft, diversion of construction funds, sale of an unqualified security, using false statements in the sale of a security, filing a fraudulent income tax return, and allegations of aggravated white-collar crime enhancements.
“This defendant preyed on victim after victim eventually bilking them out of more that $3 million,” DA Dumanis said. “Deputy District Attorney Hector Jimenez of our Economic Crimes Division and the prosecution team did an outstanding job prosecuting this case and working with our law enforcement partners to help obtain a measure of justice for the victims.”
“Today’s sentencing sends a clear message to those who would defraud the public through deceit and false claims,” said FBI Special Agent in Charge Daphne Hearn. “The FBI and our law enforcement partners will aggressively pursue you and stop you from lining your pockets at the expense of others.”
Brachmanis claimed to be a real estate investment attorney who solicited unsuspecting victims to invest in a variety of properties which he said would be developed and later sold at a profit. Brachmanis convinced the victims that he would be an equal partner in some of the investments, but he instead used the victims’ money only as a down payment. Brachmanis diverted investors’ money to other projects and in some cases took the money for himself.
This case was the result of a joint investigation with the Federal Bureau of Investigation (FBI), San Diego County District Attorney’s Office, and the California Franchise Tax Board.
Thursday, October 24, 2013
Former Glendale Resident Arraigned on Charges Alleging She Defrauded Investors of $3.9 Million Using a Suspended Real Estate License
A former resident of Glendale was in court this week to face charges alleging she defrauded numerous victims in a series of real estate investment schemes, announced Bill L. Lewis, the Assistant Director in Charge of the FBI’s Los Angeles Field Office; and André Birotte, Jr., the United States Attorney in Los Angeles.
Sona Chukhyan, 48, of San Francisco, was named in a federal grand jury indictment returned in United States District Court in Los Angeles on September 26, 2013. The indictment, which was unsealed upon the defendant’s arrest, alleges Chukhyan executed a variety of real estate schemes in which she convinced victims to invest and specifically charges her with wire fraud; aggravated identity theft; and aiding and abetting. Chukhyan was arrested by the FBI in San Francisco on October 3 and was recently returned to Los Angeles to face prosecution.
Acording to the indictment, Chukhyan operated the schemes with others, two of whom are identified in the indictment only as “co-schemer 1” and “co-schemer 2.” Co-schemer 2, Chukhyan’s spouse, owned JBA Company LLC, a business that purportedly rented real estate and rented and repaired shoes in northern California.
The indictment alleges that Chukhyan solicited investors in a variety of ways. In some cases, Chukhyan told victims they were investing in deals on a semi-exclusive basis before the deals were available to the general public. In other cases, Chukhyan offered victims an opportunity to “flip” homes for a quick profit and often misrepresented that she already had buyers lined up once the title was obtained. In other cases, Chukhyan encouraged victims to extend short-term loans to third parties who could not obtain hard money loans from a traditional source and advised victims they would earn back their principal investment and interest on the purported loans. The indictment alleges that Chukhyan sometimes provided victims with fictitous documentation to lend legitimacy to the fraudulent schemes. The indictment alleges that, beginning in or about December 2004 through at least June 2010, victims transferred approximately $4,600,000 to Chukhyan and co-schemer 1.
Chukhyan allegedly told victims that she was a licensed real estate agent in Califrornia when, in fact, her license had expired in 2000 and had been suspended in August 2003. In addition, Chukhyan allegedly made material misrepresentations to victims, assuring them their money was safe and that their investment was without risk. In fact, Chukhyan did not use investors’ money as intended but instead spent victim money on her residence, personal purchases, cash withdrawals, and to make Ponzi-style payments to early investors in order to avoid suspicion, according to the indictment.
When victims did become suspicious, Chukhyan gave false reasons for delays or told victims that she “rolled” their principal investment and purported profits into another deal that would generate yet more profit, according to the indictment.
The indictment further alleges that Chukhyan sent various e-mails and text messages to victims vowing to repay them in order to forestall investors from suing her or reporting her to law enforcement. Ultimately, Chukhyan stopped responding to victims’ demands for their money to be returned. As a consequence of the scheme, victims lost approximately $3.9 million, according to the indictment.
The indictment outlines wire transactions made from victims located in areas in Southern California and other U.S. states.
If convicted of the charges in the indictment, Chukhyan faces a statutory maximum penalty of 242 years in federal prison—20 years for each fraud count, plus a mandatory two-year sentence for the aggravated ID theft charge.
Chukhyan had an initial appearance in U.S. District Court Monday afternoon and was released on $250,000 bond. A trial date of December 17 has been scheduled.
This case was investigated by the FBI. Chukhyan will be prosecuted by the United States Attorney’s Office in Los Angleles.
Media Contact:
Sona Chukhyan, 48, of San Francisco, was named in a federal grand jury indictment returned in United States District Court in Los Angeles on September 26, 2013. The indictment, which was unsealed upon the defendant’s arrest, alleges Chukhyan executed a variety of real estate schemes in which she convinced victims to invest and specifically charges her with wire fraud; aggravated identity theft; and aiding and abetting. Chukhyan was arrested by the FBI in San Francisco on October 3 and was recently returned to Los Angeles to face prosecution.
Acording to the indictment, Chukhyan operated the schemes with others, two of whom are identified in the indictment only as “co-schemer 1” and “co-schemer 2.” Co-schemer 2, Chukhyan’s spouse, owned JBA Company LLC, a business that purportedly rented real estate and rented and repaired shoes in northern California.
The indictment alleges that Chukhyan solicited investors in a variety of ways. In some cases, Chukhyan told victims they were investing in deals on a semi-exclusive basis before the deals were available to the general public. In other cases, Chukhyan offered victims an opportunity to “flip” homes for a quick profit and often misrepresented that she already had buyers lined up once the title was obtained. In other cases, Chukhyan encouraged victims to extend short-term loans to third parties who could not obtain hard money loans from a traditional source and advised victims they would earn back their principal investment and interest on the purported loans. The indictment alleges that Chukhyan sometimes provided victims with fictitous documentation to lend legitimacy to the fraudulent schemes. The indictment alleges that, beginning in or about December 2004 through at least June 2010, victims transferred approximately $4,600,000 to Chukhyan and co-schemer 1.
Chukhyan allegedly told victims that she was a licensed real estate agent in Califrornia when, in fact, her license had expired in 2000 and had been suspended in August 2003. In addition, Chukhyan allegedly made material misrepresentations to victims, assuring them their money was safe and that their investment was without risk. In fact, Chukhyan did not use investors’ money as intended but instead spent victim money on her residence, personal purchases, cash withdrawals, and to make Ponzi-style payments to early investors in order to avoid suspicion, according to the indictment.
When victims did become suspicious, Chukhyan gave false reasons for delays or told victims that she “rolled” their principal investment and purported profits into another deal that would generate yet more profit, according to the indictment.
The indictment further alleges that Chukhyan sent various e-mails and text messages to victims vowing to repay them in order to forestall investors from suing her or reporting her to law enforcement. Ultimately, Chukhyan stopped responding to victims’ demands for their money to be returned. As a consequence of the scheme, victims lost approximately $3.9 million, according to the indictment.
The indictment outlines wire transactions made from victims located in areas in Southern California and other U.S. states.
If convicted of the charges in the indictment, Chukhyan faces a statutory maximum penalty of 242 years in federal prison—20 years for each fraud count, plus a mandatory two-year sentence for the aggravated ID theft charge.
Chukhyan had an initial appearance in U.S. District Court Monday afternoon and was released on $250,000 bond. A trial date of December 17 has been scheduled.
This case was investigated by the FBI. Chukhyan will be prosecuted by the United States Attorney’s Office in Los Angleles.
Media Contact:
- United States Attorney’s Office: 213-894-6947
- Assistant U.S. Attorney Stephen Cazares: 213-894-0707
- FBI Los Angeles Press Relations: 310-996-3343
Tuesday, September 17, 2013
Former Alabama Real Estate Investor Pleads Guilty to Making False Statement in Connection with Real Estate Foreclosure Auction Investigation
WASHINGTON—A former investor in the Alabama real estate foreclosure auctions industry pleaded guilty today to one count of making false statements, the Department of Justice announced.
Ali Forouzan, of Mobile, Alabama, pleaded guilty in the U.S. District Court for the Southern District of Alabama in Mobile to making materially false and fictitious statements to a special agent of the FBI and a Department of Justice Antitrust Division prosecutor. The false statements were in regard to his knowledge of and participation in bid rigging and other fraudulent schemes in the Alabama real estate foreclosure auction industry.
According to the charge, in February 2012, Forouzan was interviewed, with counsel present, about the fraudulent schemes under investigation. Forouzan was aware of the nature of the investigation and knew that it was material for the FBI and the Antitrust Division to obtain his full knowledge of such unlawful acts as bid-rigging agreements and other fraudulent schemes relating to real estate foreclosure auctions; unlawful payoffs that he and others made and received in furtherance of such schemes; and secret, second auctions in which Forouzan and others participated. However, Forouzan willfully and knowingly provided false and fictitious information during his interview.
“The Antitrust Division views attempts to compromise the integrity of its investigations as a serious offense,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “Today’s filing should send a clear signal that the Antitrust Division is committed to prosecuting vigorously attempts to cover-up illegal, anti-competitive conduct.”
“The success of this investigation exemplifies the FBI’s continued commitment to fight fraud in the real estate industry and serves to deter those who wish to illegally profit from fraud schemes,” said Stephen E. Richardson, FBI Special Agent in Charge of the Mobile Field Office. Special Agent in Charge Richardson praised the perseverance of agents and prosecutors in this complex investigation.
Including Forouzan, to date, nine individuals and two companies have pleaded guilty as a result of the department’s ongoing investigation into the Alabama real estate foreclosure auction industry.
Forouzan faces a maximum penalty of five years in prison, three years of supervised release, and a $250,000 fine.
The charge against the defendant arose from an ongoing investigation into bid rigging and other fraudulent schemes in the Alabama real estate foreclosure auctions industry. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should call 404-331-7116 or visit www.justice.gov/atr/contact/newcase.htm.
Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
Ali Forouzan, of Mobile, Alabama, pleaded guilty in the U.S. District Court for the Southern District of Alabama in Mobile to making materially false and fictitious statements to a special agent of the FBI and a Department of Justice Antitrust Division prosecutor. The false statements were in regard to his knowledge of and participation in bid rigging and other fraudulent schemes in the Alabama real estate foreclosure auction industry.
According to the charge, in February 2012, Forouzan was interviewed, with counsel present, about the fraudulent schemes under investigation. Forouzan was aware of the nature of the investigation and knew that it was material for the FBI and the Antitrust Division to obtain his full knowledge of such unlawful acts as bid-rigging agreements and other fraudulent schemes relating to real estate foreclosure auctions; unlawful payoffs that he and others made and received in furtherance of such schemes; and secret, second auctions in which Forouzan and others participated. However, Forouzan willfully and knowingly provided false and fictitious information during his interview.
“The Antitrust Division views attempts to compromise the integrity of its investigations as a serious offense,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “Today’s filing should send a clear signal that the Antitrust Division is committed to prosecuting vigorously attempts to cover-up illegal, anti-competitive conduct.”
“The success of this investigation exemplifies the FBI’s continued commitment to fight fraud in the real estate industry and serves to deter those who wish to illegally profit from fraud schemes,” said Stephen E. Richardson, FBI Special Agent in Charge of the Mobile Field Office. Special Agent in Charge Richardson praised the perseverance of agents and prosecutors in this complex investigation.
Including Forouzan, to date, nine individuals and two companies have pleaded guilty as a result of the department’s ongoing investigation into the Alabama real estate foreclosure auction industry.
Forouzan faces a maximum penalty of five years in prison, three years of supervised release, and a $250,000 fine.
The charge against the defendant arose from an ongoing investigation into bid rigging and other fraudulent schemes in the Alabama real estate foreclosure auctions industry. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should call 404-331-7116 or visit www.justice.gov/atr/contact/newcase.htm.
Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
Tuesday, February 5, 2013
Westminster Man Sentenced to 72 Months in Prison for Orchestrating a $1.7 Million Real Estate Scheme
DENVER—Steven J. Mascarenas, 53, of Westminster, Colorado, was
sentenced recently by U.S. District Court Judge Robert E. Blackburn to
serve 72 months in federal prison for wire fraud, making a false
statement to a pretrial services officer, and escape, U.S. Attorney John
Walsh, Denver FBI Special Agent in Charge James Yacone, and
IRS-Criminal Investigation Special Agent in Charge Stephen Boyd
announced. Mascarenas was ordered to spend three years on supervised
release after he serves his term of imprisonment. Judge Blackburn also
ordered Mascarenas to pay restitution totaling $1,776,152.21. Mascarenas
will surrender to the Bureau of Prisons once a facility is designated.
Steven Mascarenas was indicted on April 22, 2010, along with co-defendants Kathy Mascarenas (wife of Steven) and Katrina Roberts. He pled guilty on July 3, 2012, before Judge Blackburn. Katrina Roberts pled guilty and was sentenced to 20 months in prison on July 27, 2012. Kathy Mascarenas pled guilty and was sentenced to 24 months in prison on November 6, 2012.
According to court documents, in 2004, Defendant Steven J. Mascarenas, then an attorney and licensed real estate broker, orchestrated the purchase and resale of residential properties in The Broadlands, a subdivision in Broomfield, Colorado. He arranged to have individuals serve as “credit buyers” to obtain loans, purchase the properties, and resell them shortly thereafter at inflated prices to other “credit buyers” in his select group. He concealed from the lenders that these “credit buyers” were only acting at his direction and were being compensated after the closings for their participation in having obtained the loans and purchased the properties.
Mascarenas had Roberts prepare appraisal reports in which she fraudulently inflated the fair market values of the properties by $100,000 to $325,000. To make the inflated values in all her reports appear legitimate, she falsely represented that the purchases, which were actually sales at market value, were “distressed” sales, or “quick” sales below market value.
Then, based on the fraudulent appraisals, Steven Mascarenas set the prices for the resales far beyond their true market values and arranged for the buyers to obtain 100 percent financing for them.
To ensure that the desired funding would be approved for the buyers for both the purchases and the resales, Steven Mascarenas caused false information about their qualifications to be incorporated into their loan applications to enable them to qualify for the loans.
He caused the proceeds from the second sales to be directed to entities of his choice.
Kathy Mascarenas conducted financial transactions as necessary to facilitate, perpetuate, and conceal the fraud.
All of the loans went into default, and the loss to the lenders was approximately $1,776,162.21.
While out on bond in the fall of 2011, Mascarenas repeatedly lied to his supervising pretrial services officer, telling him that he was employed making sandwiches at a local Quizno’s restaurant. In fact, he was managing the store under the assumed name of “Steven Jay,” in violation of the conditions of his bond.
In June 2011, as a condition of Steven’s bond, he was required to reside in a halfway house, and he was not permitted to leave the facility without permission. Hours before he was to be taken to a prison facility, he fled. An arrest warrant was issued, and on December 4, 2011, Steven was arrested by the Lakewood Police Department at a motel in Lakewood, Colorado.
“Mortgage fraud harms everyone involved in buying a home—buyers, appraisers, real estate agents, and bankers,” said U.S. Attorney John Walsh. “Lying on mortgage applications is a fraud and a federal criminal felony. As the financial crisis of 2007 and 2008 showed us, following the rules in real estate transactions matters—and those who don’t face time in federal prison.”
“Mortgage fraud has had a significant impact in Colorado,” said Denver FBI Special Agent in Charge James Yacone. “Mascarenas was an attorney and licensed realtor who used his professional license to instill trust in others. His conviction and recent sentencing sends a clear message that using positions of trust to commit fraud will not be tolerated.”
“Mortgage fraud erodes our economy and threatens the financial health of the communities in which we live; this sentence reminds us there are consequences for committing such fraud,” said Stephen Boyd, Special Agent in Charge, IRS-Criminal Investigation, Denver Field Office.
This case was investigated by the Federal Bureau of Investigation and the IRS-Criminal Investigation and prosecuted by Assistant U.S. Attorneys Linda Kaufman and James Allison
Steven Mascarenas was indicted on April 22, 2010, along with co-defendants Kathy Mascarenas (wife of Steven) and Katrina Roberts. He pled guilty on July 3, 2012, before Judge Blackburn. Katrina Roberts pled guilty and was sentenced to 20 months in prison on July 27, 2012. Kathy Mascarenas pled guilty and was sentenced to 24 months in prison on November 6, 2012.
According to court documents, in 2004, Defendant Steven J. Mascarenas, then an attorney and licensed real estate broker, orchestrated the purchase and resale of residential properties in The Broadlands, a subdivision in Broomfield, Colorado. He arranged to have individuals serve as “credit buyers” to obtain loans, purchase the properties, and resell them shortly thereafter at inflated prices to other “credit buyers” in his select group. He concealed from the lenders that these “credit buyers” were only acting at his direction and were being compensated after the closings for their participation in having obtained the loans and purchased the properties.
Mascarenas had Roberts prepare appraisal reports in which she fraudulently inflated the fair market values of the properties by $100,000 to $325,000. To make the inflated values in all her reports appear legitimate, she falsely represented that the purchases, which were actually sales at market value, were “distressed” sales, or “quick” sales below market value.
Then, based on the fraudulent appraisals, Steven Mascarenas set the prices for the resales far beyond their true market values and arranged for the buyers to obtain 100 percent financing for them.
To ensure that the desired funding would be approved for the buyers for both the purchases and the resales, Steven Mascarenas caused false information about their qualifications to be incorporated into their loan applications to enable them to qualify for the loans.
He caused the proceeds from the second sales to be directed to entities of his choice.
Kathy Mascarenas conducted financial transactions as necessary to facilitate, perpetuate, and conceal the fraud.
All of the loans went into default, and the loss to the lenders was approximately $1,776,162.21.
While out on bond in the fall of 2011, Mascarenas repeatedly lied to his supervising pretrial services officer, telling him that he was employed making sandwiches at a local Quizno’s restaurant. In fact, he was managing the store under the assumed name of “Steven Jay,” in violation of the conditions of his bond.
In June 2011, as a condition of Steven’s bond, he was required to reside in a halfway house, and he was not permitted to leave the facility without permission. Hours before he was to be taken to a prison facility, he fled. An arrest warrant was issued, and on December 4, 2011, Steven was arrested by the Lakewood Police Department at a motel in Lakewood, Colorado.
“Mortgage fraud harms everyone involved in buying a home—buyers, appraisers, real estate agents, and bankers,” said U.S. Attorney John Walsh. “Lying on mortgage applications is a fraud and a federal criminal felony. As the financial crisis of 2007 and 2008 showed us, following the rules in real estate transactions matters—and those who don’t face time in federal prison.”
“Mortgage fraud has had a significant impact in Colorado,” said Denver FBI Special Agent in Charge James Yacone. “Mascarenas was an attorney and licensed realtor who used his professional license to instill trust in others. His conviction and recent sentencing sends a clear message that using positions of trust to commit fraud will not be tolerated.”
“Mortgage fraud erodes our economy and threatens the financial health of the communities in which we live; this sentence reminds us there are consequences for committing such fraud,” said Stephen Boyd, Special Agent in Charge, IRS-Criminal Investigation, Denver Field Office.
This case was investigated by the Federal Bureau of Investigation and the IRS-Criminal Investigation and prosecuted by Assistant U.S. Attorneys Linda Kaufman and James Allison
Friday, January 11, 2013
Five Arrested in Orange County-Based ‘Builder Bailout’ Mortgage Fraud Scheme That Fraudulently Purchased Condos
SANTA ANA, CA—Federal authorities have arrested five
people allegedly involved in a “builder bailout” real estate scheme that
fraudulently purchased more than 100 condominium units around the
country with mortgages that mostly went into default, resulting in
foreclosures and millions of dollars in losses.
The scheme, which was operated out of Excel Investments and related companies that were based in Irvine and then Santa Ana, allegedly identified new condominium developments in which the builder-owners were struggling to sell units and arranged with the builders to sell the units in return for large commissions. The builders benefitted by making it appear that their condos were selling and maintaining their value, while those involved with the fraudulent sale of the units financially benefitted from the hefty commissions that were concealed from the mortgage lenders. The defendants recruited a number of straw buyers to purchase the properties as “investors” and ensured that they qualified for financing by fabricating important aspects of their loan applications.
The five defendants were arrested yesterday by special agents with the FBI, the Federal Housing Finance Agency’s Office of Inspector General, and IRS-Criminal Investigation. Those taken into custody are:
According to an indictment returned last Friday by a federal grand jury in Los Angeles, the defendants involved in the scheme negotiated with the builders of new housing developments in California, Florida, and Arizona to sell condominium units on behalf of builders in exchange for a hefty commission, which they often misleadingly referred to as “marketing fees” and did not disclose to the lenders. In each of the transactions—the indictment alleges there were more than 100 of them—the defendants earned commissions of $50,000 to $100,000 and sometimes more. The defendants bought units for themselves, their relatives, and on behalf of “investors” with good credit scores who served as “straw buyers.” They allegedly recruited the straw buyers by presenting the scheme as an investment opportunity that required no down payment and would generate income through rental payments.
To obtain mortgages for the properties, the defendants allegedly prepared loan applications with false information about the buyers’ employment, income, and assets. They allegedly submitted fabricated and altered W-2 forms, paystubs, and bank statements in support of those applications. According to the indictment, they concealed the huge commissions from mortgage lenders by submitting false Settlement Statements—or Form HUD-1s—that omitted these large payments.
When many of the loans defaulted and led to foreclosure, the lending institutions suffered losses of at least $6.2 million. The Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae) purchased dozens of these loans on the secondary mortgage market and suffered losses of at least $2.37 million as a result of delinquencies, defaults, and foreclosures on the properties.
The six defendants named in the indictment are all charged with conspiring to commit bank fraud and wire fraud. Abaji, Obagi, Tbakhi, and Burchell are additionally charged with six counts of wire fraud.
The four defendants who were arrested in California were arraigned yesterday afternoon by United States Magistrate Judge Robert N. Block. All four pleaded not guilty, and a trial was scheduled for March 5. Obagi, Burchell, and Salah were released last night on bond, and Abaji is expected to be released later today.
El Tahir, who has been in custody since yesterday, is scheduled to make his initial appearance this afternoon in United States District Court in Baltimore, Maryland.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
The conspiracy charge in the indictment carries a statutory maximum sentence of 30 years in federal prison and a potential $1 million fine. The wire fraud charges carry a statutory maximum sentence of 20 years in federal prison and a potential $250,000 fine.
This case is the result of an investigation by the Federal Bureau of Investigation, the Federal Housing Finance Agency’s Office of Inspector General, and IRS-Criminal Investigation.
The scheme, which was operated out of Excel Investments and related companies that were based in Irvine and then Santa Ana, allegedly identified new condominium developments in which the builder-owners were struggling to sell units and arranged with the builders to sell the units in return for large commissions. The builders benefitted by making it appear that their condos were selling and maintaining their value, while those involved with the fraudulent sale of the units financially benefitted from the hefty commissions that were concealed from the mortgage lenders. The defendants recruited a number of straw buyers to purchase the properties as “investors” and ensured that they qualified for financing by fabricating important aspects of their loan applications.
The five defendants were arrested yesterday by special agents with the FBI, the Federal Housing Finance Agency’s Office of Inspector General, and IRS-Criminal Investigation. Those taken into custody are:
- Aref Abaji, 31, of Aliso Viejo, a real estate agent
- Maher Obagi, 26, of Huntington Beach, the brother of Aref Abaji
- Jacqueline Burchell, 52, of Orange, an escrow agent
- Mohamed Salah, 37, of Mission Viejo
- Mohamed El Tahir, 35, of Glen Burnie, Maryland
According to an indictment returned last Friday by a federal grand jury in Los Angeles, the defendants involved in the scheme negotiated with the builders of new housing developments in California, Florida, and Arizona to sell condominium units on behalf of builders in exchange for a hefty commission, which they often misleadingly referred to as “marketing fees” and did not disclose to the lenders. In each of the transactions—the indictment alleges there were more than 100 of them—the defendants earned commissions of $50,000 to $100,000 and sometimes more. The defendants bought units for themselves, their relatives, and on behalf of “investors” with good credit scores who served as “straw buyers.” They allegedly recruited the straw buyers by presenting the scheme as an investment opportunity that required no down payment and would generate income through rental payments.
To obtain mortgages for the properties, the defendants allegedly prepared loan applications with false information about the buyers’ employment, income, and assets. They allegedly submitted fabricated and altered W-2 forms, paystubs, and bank statements in support of those applications. According to the indictment, they concealed the huge commissions from mortgage lenders by submitting false Settlement Statements—or Form HUD-1s—that omitted these large payments.
When many of the loans defaulted and led to foreclosure, the lending institutions suffered losses of at least $6.2 million. The Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae) purchased dozens of these loans on the secondary mortgage market and suffered losses of at least $2.37 million as a result of delinquencies, defaults, and foreclosures on the properties.
The six defendants named in the indictment are all charged with conspiring to commit bank fraud and wire fraud. Abaji, Obagi, Tbakhi, and Burchell are additionally charged with six counts of wire fraud.
The four defendants who were arrested in California were arraigned yesterday afternoon by United States Magistrate Judge Robert N. Block. All four pleaded not guilty, and a trial was scheduled for March 5. Obagi, Burchell, and Salah were released last night on bond, and Abaji is expected to be released later today.
El Tahir, who has been in custody since yesterday, is scheduled to make his initial appearance this afternoon in United States District Court in Baltimore, Maryland.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
The conspiracy charge in the indictment carries a statutory maximum sentence of 30 years in federal prison and a potential $1 million fine. The wire fraud charges carry a statutory maximum sentence of 20 years in federal prison and a potential $250,000 fine.
This case is the result of an investigation by the Federal Bureau of Investigation, the Federal Housing Finance Agency’s Office of Inspector General, and IRS-Criminal Investigation.
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