Mortgage Fraud Scheme Caused More Than $150 Million in Bank Losses

By
Education & Training with (retired) TN LIC# 290452

Federal Grand Jury in Oakland Indicts President of Discovery Sales Inc.
Ayman Shahid Charged in Mortgage Fraud Scheme That Caused More Than $150 Million in Bank Losses

U.S. Attorney’s Office May 19, 2014
  • Northern District of California (415) 436-7200

WASHINGTON—An indictment by a federal grand jury unsealed today in Oakland, California, charges Ayman Shahid with conspiracy to commit bank fraud and 17 individual counts of bank fraud, announced United States Attorney Melinda Haag and Special Agent in Charge David Johnson of the FBI’s San Francisco Field Office.

According to the indictment, Shahid, 38, of Danville, California, is alleged to have masterminded a scheme to cause banks to approve mortgage loans for unqualified buyers at the height of the financial crisis. Shahid managed Discovery Sales Inc., which was the sales arm of affiliated residential construction companies, including Discovery Home Builders and Albert D. Seeno Construction Co. Shahid devised and managed a scheme to provide undisclosed incentives to unqualified home buyers, which allowed Discovery to continue selling houses during the financial crisis. Shahid intentionally hid the scheme from appraisers and bank underwriters so that loans to unqualified buyers would be approved.

The aggregate sales price of the homes affected by the scheme was almost $230 million and loans having a value of $150 million went into foreclosure or short sale proceedings.

Nine individuals who played different roles in the overall scheme have already been charged. Seven have pleaded guilty, including two direct subordinates of Shahid, Carey Hendrickson, and Jason Sterlino. Jennifer Xiao is a fugitive.

The use of undisclosed incentives paid to home buyers at the Discovery Builders development at Leona Quarry in Oakland was reported to the FBI in 2009. The FBI conducted a search of the offices of Discovery Sales and its affiliates in 2010.

Shahid was arrested in Concord, California, this morning at approximately 8:30 a.m. and his initial appearance is scheduled for today at 11:30 a.m. in federal court before the Honorable Donna M. Ryu, United States Magistrate Court Judge in Oakland.

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant could face a maximum sentence of 30 years in prison and a fine of $1 million, plus restitution if appropriate, for each of the 18 violations alleged in the indictment. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence.

This case is being prosecuted by Assistant United States Attorneys located in the Special Prosecutions Unit in San Francisco and in the Oakland Office, with the assistance from special agents of the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigative Division, and the Federal Housing Finance Agency-Office of Inspector General.

Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 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. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

Press inquiries to the U.S. Attorney’s Office should be directed to Lili AraúzHaase at (415) 436-6811 or by e-mail at Lillian.ArauzHaase@usdoj.gov.

http://www.fbi.gov/sanfrancisco/press-releases/2014/federal-grand-jury-in-oakland-indicts-president-of-discovery-sales-inc?utm_campaign=email-Immediate&utm_medium=email&utm_source=fbi-in-the-news&utm_content=322939

Posted by



David Saks



Time&Temp Memphis

Legal Disclaimer
Please be advised that:

 The information and notices contained in this blog are intended to summarize recent developments and news. The posts are presented as general research and information. These posts are not intended, nor should be regarded, as legal advice. Some blog posts concern allegations made in civil lawsuits and in criminal indictments in United States Courts. All persons are presumed innocent until convicted of a crime and proven guilty. Readers who have particular questions or who believe that they need legal counsel should seek the advice of a qualified attorney. It is neither the editor's or author's intention to create a confidential relationship or any broker-client relationship via communication from this site at any time. Please consult with your state real estate board if questions & answers in the education section conflict with the laws of your region or if you need clarification regarding their applicability or how they may govern the services that you provide.

By entering this web site, you understand the following:
When you select a link to an outside Web site, you are subject to the privacy, copyright, security, and information quality policies of that Web site. David Saks:
1.DOES NOT control or guarantee the accuracy, legality, relevance, timeliness, or completeness of information contained on a linked Web site;
2.DOES NOT endorse linked Web sites, the views they express, or the products/services they offer unless linked web sites, the views they express, or the products/services they offer endorse or support David Saks in accordance with the standards of the Tennessee Real Estate Commission and the Federal Government's laws regarding commerce and the application, solicitation and transmission of internet-related concerns, commerce or social networking;
3.CANNOT authorize the use of copyrighted materials contained in linked Web sites;
4.IS NOT responsible for transmissions users receive from linked Web sites;
5. That DavidSaks.Com is biographical & real estate related. Some links within will leave this site.
6. http://activerain.com/profile/davidsaks is internet-compliant & abides by the rules & regulations of the Tennessee Real Estate Commission, Eve Maxwell, Executive Director.
7. Unless indicated otherwise, ActiveRain does offer listings, or IDX and is provided for licensed salespersons, brokers, buyers & sellers of real property as a community & professional service.
8. David Saks is a retired / licensed real estate broker in the State of Tennessee, license #290452, and an independent contractor.
9. Information is believed to be accurate, but not guaranteed, at any realty link or document connected to the World Wide Web & viewable by anyone connected to the internet who has a web browser.
10. Brokers, buyers, sellers, agents & anyone should independently verify any information prior to submitting any offer to purchase goods & services from any link.
11. Please Visit The American Real Estate Alliance or Memphis.8k.Com for additional information regarding property issues for real estate professionals and consumers.

 

Photos © & Licensed by Nova Development

All Content Protected © 
Before you even think about
committing a real estate crime
click this red button.
Real Estate Crimes

© All Rights Reserved.

 

 

 

 

"Information generated by the Department of Justice is in the public domain and may be reproduced, published or otherwise used without the Department’s permission. Citation to the Department of Justice as the source of the information is appreciated, as appropriate."

Department of Justice Legal Policies


 

  Real Estate Crimes

 

Click "HERE" For Today's Question

 

 

TheListen Now!

David Saks Show

Saturday Nite

9pm-12am Central

University of Memphis

WUMR

 

Support
America's Hobby

Click Elvis

Mr.Saks' participation in ActiveRain ended April 13, 2015.

His blog archives will remain online.

May God bless you.

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
ActiveRain Community
Location:
International International International
Groups:
Active Rain Newbies
Realtors®
Posts to Localism
Dedicated Bloggers
Addicted to Active Rain
Tags:
real estate fraud

Spam prevention
Show All Comments
Rainmaker
4,797,927
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

While that's a high number, David, I wonder what the losses are stemming from the incompetence of the banks?

May 20, 2014 12:33 AM #1
Rainmaker
1,570,710
David Saks
(retired) - Memphis, TN

Plenty, Gabe.

May 20, 2014 10:55 PM #2
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
1,570,710

David Saks

May God Bless You, Always. David
*
*
*
*
Spam prevention

Additional Information