3 Sentenced for Mortgage Fraud Conspiracy
Wendy Werner, 46, Sarasota, Florida, Marshall Asmar, 40, Milford, Connecticut, and Rab Nawaz, 48, Waterford, Connecticut, were sentenced for their involvement in an extensive mortgage fraud conspiracy that defrauded lenders of more than $3.2 million. The defendants were sentenced by Chief United States District Judge Alvin W. Thompson in Hartford, Connecticut.
Werner was sentenced on September 21, 2011, to 48 months of imprisonment, followed by three years of supervised release. Werner also was ordered to pay a fine in the amount of $100,000. She was found guilty of one count of conspiracy to commit mail fraud and wire fraud and one count of mail fraud,
Asmar was sentenced to 52 months of imprisonment, followed by three years of supervised release. He was found guilty of one count of conspiracy to defraud the United States, three counts of wire fraud and three counts of making false statements.
Nawaz was sentenced to 90 months of imprisonment, followed by three years of supervised release. He was found guilty of one count of conspiracy to defraud the United States, eight counts of wire fraud, and one count of obstruction of justice.
According to court documents, statements made in court and the evidence disclosed during the trial, between approximately August 2006 and May 2010, Syed Babar, New London, Connecticut, led a mortgage fraud scheme during which participants obtained approximately $10 million in residential real estate loans, including loans insured by the FHA, through the use of sham sales contracts, false loan applications and fraudulent property appraisals. As part of the scheme, Babar arranged for straw buyers to purchase houses they did not intend to occupy at fraudulently inflated prices and to apply for loans in the amount of the fraudulently inflated prices.
The loans were supported by fraudulent appraisals and a variety of fraudulent information about the buyer, including information about his or her occupation, income, assets, liabilities, and intention to occupy the house as a primary residence. Babar and his co-conspirators also created a fictitious construction company called "Sheda Telle Construction, LLC" – which trial testimony revealed means "ring the bell and run" in Babar's native language – in order to divert fraud proceeds to it and, in some cases, to falsely justify the artificially inflated sales price of houses based on renovations purportedly made to the property that, in fact, did not occur. Babar and his co-conspirators then split the fraud proceeds generated from the scheme. The scheme involved approximately 29 properties in New London, New Haven and other locations in Connecticut.
Werner, Asmar and Nawaz made hundreds of thousands of dollars selling properties at fraudulently inflated prices to straw purchasers. In August 2006, Werner, through her company, Marbo Restorations, LLC, sold three houses on Lake Street in Norwich to a straw purchaser working with Babar. The fraudulently inflated sales prices for the three properties were $260,000, $270,000 and $270,000, respectively. Werner provided Babar with approximately $283,000 of the proceeds generated from the sale of the three houses, and Babar then wrote 10 checks totaling approximately $179,000 to the straw purchaser.
Asmar was a landlord with various properties throughout the state of Connecticut, many of which were in various states of disrepair. Both directly and through his company, Property Plus, LLC, Asmar owned properties in New Haven and Bridgeport that were used in the mortgage fraud conspiracy. Asmar helped to execute the scheme by supplying properties for sale. Asmar and Babar would agree on a price for a property, and then Babar and other co-conspirators arranged to apply for mortgages above the agreed upon value to be paid to Asmar. After the loan was funded, the difference between Asmar's actual sale price and the inflated price was diverted to Sheda Telle Construction.
In addition, Asmar, working with co-defendant Morris Olmer, rented out houses that had purportedly been "sold" to straw buyers in FHA-insured loan transactions. The straw buyers never received the keys to the properties, never intended to live in the properties, and never made any mortgage payments.
Nawaz, who Babar referred to as his "uncle," sold three houses to straw buyers for a total of more than $350,000 what he paid for the homes just a short time earlier.
In addition, Nawaz had a phone number subscribed to his home address that was also identified with "Global Home Painting," which was listed on certain loan applications as the fictitious employer of the straw buyer of a property. The number was used by co-conspirators to receive calls from lenders seeking to verify an applicant's employment information.
Shortly after Babar was arrested in this case, Nawaz met with a co-defendant and tried to keep him from discussing their involvement in the conspiracy with law enforcement.
During the trial, the government called 20 witnesses, played numerous recorded conversations and presented hundreds of exhibits. Morris Olmer, 83, New Haven also was convicted of various charges following the trial. And, on March 21, at the conclusion of the fourth day of trial, Thomas Gallagher pleaded guilty to one count of making a false statement to the government in connection with an FHA-insured loan. Gallagher, who operated Autumn Appraisals, LLC, West Haven, created fraudulently inflated appraisals of residential real estate in exchange for payments.
On February 1, 2011, Babar pleaded guilty to multiple federal charges related to his leadership of this extensive mortgage fraud scheme. Seven other individuals have also pleaded guilty to various charges related to their involvement in this scheme.
On June 8, 2011, Gallagher was sentenced to 60 months of imprisonment. All of the other defendants await sentencing.
David B. Fein, United States Attorney for the District of Connecticut, announced the sentencing.
"Most of the nearly 30 properties involved in this criminal scheme ended up in foreclosure, with several houses abandoned and in disrepair," stated U.S. Attorney Fein. "The U.S. Attorney's Office, FBI, HUD-OIG and the other participants in the Connecticut Mortgage Fraud Task Force are committed to investigating and prosecuting those who are responsible criminally for creating blight in our communities and contributing to our nation's banking crisis."
This matter was investigated by the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development – Office of Inspector General. The case is being prosecuted by Assistant United States Attorneys Eric J. Glover and Susan Wines and Special Assistant United States Attorney Liam Brennan.
The Connecticut Mortgage Fraud Task Force includes representatives from the U.S. Attorney's Office; Federal Bureau of Investigation; Internal Revenue Service – Criminal Investigation; U.S. Postal Inspection Service; U.S. Department of Housing and Urban Development, Office of Inspector General; Federal Deposit Insurance Corporation, Office of Inspector General, and State of Connecticut Department of Banking.
This case was brought in coordination with the President's Financial Fraud Enforcement Task Force, which was established to wage an aggressive and coordinated effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
To report financial fraud crimes, and to learn more about the President's Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.
Courtesy Mortgage Fraud Blog