A Hartford, Conn., jury has found four more individuals guilty of multiple federal offenses related to their participation in an extensive mortgage conspiracy that defrauded lenders of more than $3.2 million.
Morris Olmer, Rab Nawaz, Wendy Werner and Marshall Asmar were convicted of conspiracy to defraud the country, wire fraud, making false statements and obstruction of justice in relation to this scheme. The jury could not reach a verdict against a fifth defendant, David Avigdor, while Thomas Gallagher pleaded guilty during the trial.
According to court documents and statements made in court, this matter resulted from an investigation into a mortgage conspiracy led by Syed Babar in which participants obtained approximately $10 million in residential real estate loans, including loans insured by the Federal Housing Administration, through the use of sham sales contracts, false loan applications and fraudulent property appraisals.
The participant’s defrauded lenders by using straw buyers that the criminals recruited who had no intention if living in the properties they purchased at inflated prices. These straw buyers applied for numerous residential real estate loans using false information that Babar and others had generated.
Olmer, who is a former attorney, conducted the majority of the closings for the fraudulent real estate transactions, which resulted in hundreds of thousands of dollars in proceeds being sent by wire and check to a fictitious construction company created by Babar called Sheda Telle Construction LLC.
Werner and Asmar made hundreds of thousands of dollars selling properties at inflated prices to straw purchasers. In August 2006, court documents said Werner sold three houses through her company Marbo Restorations LLC to a straw purchaser who worked with Babar. The inflated sales prices for the three properties were $ 260,000, $270,000 and $270,000, respectively.
Werner then gave Babar $283,000 of the proceeds generated from the sale of the three homes. Babar followed this by writing 10 checks that totaled nearly $179,000 to the straw purchaser.
The two conspirators also rented out homes that had been sold to straw buyers in FHA-insured loan transactions. The straw buyers never received the keys to the properties, had no intention to live in the properties, and did not make any mortgage payments.
Court documents revealed that Nawaz acted as a seller on several property transactions. In addition, Nawaz had a phone number subscribed to his home address identified with “Global Home Painting,” which was listed on certain loan applications as the straw buyer’s false employer. Attorneys in this case said that this number was really used by co-conspirators to receive calls from lenders seeking to verify an applicant’s employment information.
Gallagher, who operated Autumn Appraisals LLC, created fraudulently inflated appraisals of residential real estate in exchange for payments, often in cash, of thousands of dollars for every home. The payments were well beyond the appraisal fee of $375.
In the trial, the government called 20 witnesses to the stand and played numerous recorded conversations and presented hundreds of exhibits to prove the conspirators were guilty.
“This case demonstrates the commitment of the U.S. attorney’s office and our federal and state law enforcement partners to investigate and prosecute those individuals whose illegal activity contributed to our nation’s banking crisis,” said David Fein, attorney for the District of Connecticut. “I want to thank the FBI, HUD-OIG and all the participants in the Connecticut Mortgage Task Force, who are investigating these crimes, protecting the public and helping to restore confidence in our housing and financial markets.”
In early February, Babar pleaded guilty to leading this mortgage fraud scheme. Seven other individuals pleaded guilty related to their involvement in this scheme before the trail began. All the conspirators still await sentencing.
