The former owner of a New York mortgage loan modification business was
Isaak Khafizov was convicted in May 2012 of one count of conspiracy to commit mail and wire fraud, one count of mail fraud and two counts of wire fraud.
Khafizov, who operated American Home Recovery along with Jamie and David Cassuto, ran a scheme inducing desperate homeowners to pay the company thousands of dollars in upfront fees by falsely promising to get them better interest rates and lower monthly mortgage fees. This mortgage modification scam took place from the spring of 2008 to summer 2009, according to a press release from the Office of the Special Inspector for the Troubled Asset Relief Program.
To entice consumers to participate in this scam, AHR claimed to be affiliated with government agencies that were established following the financial crisis. The company also told homeowners they had been "pre-approved" for mortgage modifications by their lenders. But to ensure this approval for lower mortgage payments under the Troubled Asset Relief Program, the upfront fees needed to be paid right away.
If AHR did not obtain the mortgage modification a homeowner desired, they promised to return the upfront fees paid by the borrower, according to Manhattan federal court documents. However, this did not happen and AHR did very little work to renegotiate a homeowner's mortgage.
Over half a million dollars in fees were taken by Khafizov and AHR, court statements revealed. Furthermore, since the company directed the borrowers to stop paying their mortgages, many homeowners lost their property to foreclosure as a result of this scheme.
