Illinois Mortgage Fraud Sting Nets 24 Defendants

Allison Tussey —  March 26, 2009 — 10 Comments

24 defendants, most of whom are professionals in the mortgage loan industry, were named in 10 indictments charging them with federal offenses relating to mortgage fraud in the Chicago, Illinois area.  The cases include:

United States v. Mohammed Ali Moallem and Bahidad Javid (09 CR 228)

Mohammed Ali Moallem, 68, and Bahidad Javid, 66, both of Chicago, are charged with wire fraud affecting a financial institution. According to the indictment, Moallem, a mortgage broker and the owner of Quantum Financial Mortgage Company in Chicago, assisted by Javid, prepared a fraudulent loan application on behalf of an undercover agent posing as the nominee buyer of 4434 W. 117th Street, Alsip, Illinois (“the 117th Street residence”). Moallem then allegedly recruited Co-Schemer A, a certified public accountant, who provided an accountant’s letter which falsely represented that tax returns were prepared for the fictitious identity being used by the nominee buyer for the past three years.

The indictment further alleges that Javid advised that a fictitious corporation should be used to falsely represent the nominee buyer’s place of employment. Javid also allegedly instructed Co-Schemer A to prepare a 2005 tax return falsely reporting income of $72,000 and a 2006 tax return falsely reporting income of $75,000, and to prepare a verification of deposit falsely representing that the nominee buyer had an account with a balance of $91,890.30 at Plaza Bank, all to induce a lending institution to approve the loan application. Moallem allegedly purchased a cellular telephone to provide a telephone number that could be called to verify the rental residence of the nominee buyer’s fictitious identity, and advised that the voicemail message for the cell phone should falsely represent that the phone number belonged to a landlord of a rental property.

Moallem and Javid allegedly prepared and submitted to First Franklin Financial Corporation a loan application and supporting documents on behalf of an undercover agent posing as a nominee buyer of the 117th Street residence which contained false statements and documents, including false verifications of deposit and employment, and the false accountant letter prepared by Co-Schemer A.

According to the indictment, in May 2007, Moallem and Javid fraudulently caused First Franklin to lend approximately $202,300 to an undercover agent posing as the nominee buyer of the 117th Street residence.

United States v. Abe Karn, Donna Books, Hichem Julani and Daniel Lietz (09 CR 229)

Abe Karn, 50, Oak Lawn, Illinois, Donna Brooks, 41, Chicago, Hichem Julani, 40, Palos Park, Illinois, and Daniel Lietz, 39, Channahon, Illinois, are all charged with wire fraud affecting a financial institution. Karn, a mortgage broker and the owner of Interforest Mortgage Company in Palos Heights, and Brooks, a loan officer at Interforest, allegedly agreed to fraudulently obtain a loan for an undercover agent posing as the nominee buyer of 305 Reedwood, Joilet, Illinois (“the Reedwood residence”). Lietz, a vice president at Charter One Bank, allegedly opened an account in the name of an undercover agent at Charter One Bank, and then prepared a verification of deposit which falsely represented the amount in the account. Julani, a licensed appraiser, allegedly prepared an appraisal which mis-described the condition of the property and inflated its value. Brooks allegedly prepared a verification of employment falsely representing that the undercover agent worked at a fictitious entity and a verification of rent falsely representing that the undercover agent resided at a Chicago address.

Karn and Brooks then allegedly prepared and submitted to IndyMac Bank a loan application and supporting documentation on behalf of an undercover agent posing as the nominee buyer of the Reedwood residence which contain false statements and documents, including the false verification of deposit prepared by Lietz, the false verifications of employment and rent prepared by Brooks, and the false appraisal prepared by Julani. According to the indictment, in July 2007, Karn, Brooks, Julani, and Lietz fraudulently caused IndyMac Bank to lend approximately $180,500 to an undercover agent posing as the nominee buyer of the Reedwood residence.

United States v. Marwan Atieh and Ruwaida Dabbouseh (09 CR 230)

Marwan Atieh, 35, Tinley Park, Illinois, and Ruwaida Dabbouseh, 58, Glen Ellyn, Illinois, were both charged with wire fraud affecting a financial institution. It is alleged that Atieh, a mortgage broker at Citiwide Financial in Hanover Park, and Dabbouseh, a loan officer at Silo Mortgage Group in Palos Heights, prepared and submitted to Washington Mutual Bank a loan application on behalf of an undercover agent posing as the nominee buyer of a residential property located at 11319 S. Normandy Avenue, Worth, Illinois (“the Normandy residence”), which contained false statements regarding the undercover agent’s identity and employment. In preparing the fraudulent loan application, Atieh allegedly explained to Dabbouseh and the cooperating individual that because he believed Washington Mutual was closing down, he was not concerned about submitting a fraudulent loan package. According to the indictment, in May 2008, Atieh and Dabbouseh fraudulently caused Washington Mutual to lend approximately $144,000 to an undercover agent posing as the nominee buyer of the Normandy residence.

United States v. Ruwaida Dabbouseh and Khalil Qandil (09 CR 231)

Ruwaida Dabbouseh and Khalil Qandil, 45, Oak Lawn, Illinois, are charged with wire fraud. It is alleged that Dabbouseh prepared and submitted to Fieldstone Mortgage Company a loan application on behalf of an undercover agent posing as the nominee buyer of 1058 Four Seasons Boulevard, Aurora, Illinois (“the Four Seasons residence”), which contained false statements concerning the undercover agent’s identity and employment. Qandil, the owner and operator of a construction and remodeling business, allegedly submitted to Fieldstone a verification of employment falsely representing that his company employed the undercover agent. According to the charges, in April 2007, Dabbouseh and Qandil fraudulently caused Fieldstone to lend approximately $153,000 to an undercover agent posing as the nominee buyer of the Four Seasons residence.

United States v. Khaja Moinuddin, Mohammed Nasir and Ruwaida Dabbouseh (09 CR 232)

Khaja Moinuddin, 64, Bloomingdale, Illinois, Mohammed Nasir, 52, Glendale Heights, Illinois, and Ruwaida Dabbouseh were charged with wire fraud. The indictment alleges that Moinuddin, a mortgage broker at First Choice Mortgage in Bloomingdale, Nasir, a loan officer at First Choice, and Dabbouseh prepared and submitted to Comcor Mortgage a loan application on behalf of an undercover agent posing as the nominee buyer of a residential property located at 439 S. Elmwood Drive, Aurora, Illinois (“the Elmwood residence”), which contained false statements regarding the undercover agent’s identity and employment. According to the indictment, in March 2008, Moinuddin, Nasir and Dabbouseh fraudulently caused Comcor to lend $153,000 to an undercover agent posing as the nominee buyer of the Elmwood residence.

United States v. Louis L. Javell, Aysha M. Arroyo, and Juan Gil (09 CR 233)

Louis L. Javell, 36, Aysha M. Arroyo, 32, and Juan Gil, 45, all of Chicago, are charged with wire fraud affecting a financial institution. According to the indictment, Javell, a mortgage broker and owner of Bell Capital Real Estate in Chicago, and Arroyo, an employee at Bell Capital, met a cooperating individual and an undercover agent at Bell Capital to discuss obtaining documents which would falsely represent the undercover agent’s financial condition and banking history. Arroyo allegedly suggested having a banker open a new account in the name of the undercover agent and back-date the records to make it appear that the account had been open longer. Javell and Arroyo also allegedly suggested adding the undercover agent’s name to a pre-existing bank account to make it appear as if the undercover agent had an established financial history. According to the charges, Gil provided a verification of rent falsely representing that the undercover agent had resided at a Chicago address since March 2004.

Javell and Arroyo allegedly prepared and submitted to Countrywide Home Loans a loan application on behalf of the undercover agent posing as the nominee buyer of 2853 W. Everett Street, Blue Island, Illinois (“the Everett residence”), which contained false statements and documents, including the false verification of rent prepared by Gil and a verification of deposit containing the false information provided by Arroyo. In August 2007, Javell, Arroyo and Gil allegedly fraudulently caused Countrywide to lend approximately $150,000 to an undercover agent posing as the nominee buyer of the Everett residence.

According to the indictment, after the closing, Javell and Arroyo cautioned the cooperating individual to make a couple of mortgage payments to Countrywide on the Everett residence loan before defaulting, because they believed that the FBI investigated all first payment mortgage defaults.

United States v. Michael Salem, Hakim A. Jaradat, and Robert Goldberg (09 CR 234)

Michael Salem, 63, Park Ridge, and Hakim A. Jaradat, 65, and Robert Goldberg, 88, both of Chicago, are charged with mail and wire fraud affecting a financial institution. According to the indictment, Jaradat, a professional tax preparer, provided a cooperating individual with false tax returns for 2005 and 2006 to support a fraudulent loan application on behalf of an undercover agent posing as a nominee buyer of a residence located at 1225 Hickory Road, Homewood, Illinois (“the Hickory residence”). Jaradat also allegedly recruited Goldberg, owner of a construction company, to provide a false verification of employment for the undercover agent. Subsequently, Goldberg allegedly agreed to provide a verification of employment to a mortgage lender which would falsely state that the undercover agent was a supervisor at Goldberg’s company.  Salem, a realtor, allegedly prepared and submitted to Countrywide Bank, FSB, a loan application and supporting documentation on behalf of the undercover agent posing as the nominee buyer of the Hickory residence, which contained false statements and documents, including the false tax returns prepared by Jaradat, and the false representation that the nominee buyer worked for Goldberg’s company. In March 2008, Salem, Jaradat and Goldberg allegedly fraudulently caused Countrywide to lend approximately $171,000 to an undercover agent posing as the nominee buyer of the Hickory residence.

United States v. Hakim A. Jaradat, Oscar Paredes, Maryam Khan, and Ruwaida Dabbouseh (09 CR 235)

Hakim A. Jaradat, Oscar Paredes, 28, Park Ridge, Maryam Khan, 29, Hickory Hills, and Ruwaida Dabbouseh are charged with mail and wire fraud affecting a financial institution. According to the indictment, Jaradat offered to assist in fraudulently obtaining a second mortgage loan for a transaction involving the Everett residence, and, specifically, to recruit someone to prepare the fraudulent mortgage loan application. Subsequently, Paredes allegedly agreed to assist in fraudulently obtaining a mortgage loan, and suggested, first, that they produce fraudulent copies of tax returns in the name of the nominee buyer which would report income of approximately $75,000 per year, and second, that they create false documentation representing that the nominee buyer had assets in a pre-existing bank account. Jaradat allegedly provided the cooperating individual with false tax returns for 2006 and 2007 in the name of the nominee buyer.

According to the indictment, Paredes and Jaradat prepared and submitted to AmTrust Bank a loan application and supporting documentation on behalf of an undercover agent posing as the nominee buyer of the Everett residence, which contained false statements and documents, including the false tax returns prepared by Jaradat, and a false representation that the undercover agent had approximately $38,000 in a LaSalle Bank checking account.

After the title company expressed concerns about the difference between the appraised value of the Everett residence and the loan amount, Dabbouseh allegedly referred the cooperating individual to Khan, an attorney in Palos Heights. Dabbouseh and the cooperating individual allegedly met at Khan’s law office and informed Khan that the buyer and seller of the Everett residence were only nominees. According to the indictment, Khan responded by warning Dabbouseh and the cooperating individual about the potential liabilities, both criminal and civil, they all faced by fraudulently obtaining a mortgage loan, and then Kahn proceeded to falsely represent to both the title company and the lender that the appraisal was incorrect because of improvements that had been made to the Everett residence subsequent to the appraisal report.

According to the indictment, in May 2008, Jaradat, Paredes, Khan and Dabbouseh fraudulently caused AmTrust Bank to lend approximately $147,250 to an undercover agent posing as the nominee buyer of the Everett residence.

United States v. Babajan Khoshabe, Sunil Kaushal and James Kotz (09 CR 236)

Babajan Khoshabe, 68, and Sunil Kaushal, 48, both of Chicago, and James Kotz, 48, Munster, are charged with mail and wire fraud. Khoshabe, a mortgage broker and the owner of Nationwide Mortgage Company met with Co-Schemer A, a certified public accountant, a cooperating individual and an undercover agent posing as a nominee buyer of 4153 W. 89th Street, Hometown, Illinois (“the 89th Street residence”), and agreed that he would process a fraudulent mortgage loan provided that at least six mortgage payments were made before defaulting so that Khoshabe would not be held accountable for the mortgage loan. Khoshabe also allegedly expressed concern that lending institutions would be suspicious because there was no sales contract for the sale of the property, and requested that a contract be obtained. Kaushal, a loan officer at Nationwide, allegedly prepared a false verification of employment and verification of rent falsely stating that the undercover agent resided at 6256 S. Spaulding Road, Chicago, Illinois. According to the charges, Kotz, an attorney, prepared a power of attorney for the nominee seller, knowing that sale of the 89th Street residence was between persons using false identities for the purpose of defrauding the lender.

Khoshabe and Kaushal allegedly prepared and submitted to Equity Mortgage Corporation a loan application and supporting documentation on behalf of an undercover agent posing as the nominee buyer of the 89th Street residence, which contained false statements and documents, including the false verification of rent form prepared by Kaushal and the false real estate contract that Khoshabe requested. According to the indictment, in April 2008, Khoshabe, Kaushal, and Kotz caused Equity Mortgage Corporation to lend approximately $144,000 to an undercover agent posing as the nominee buyer of the 89th Street residence.

United States v. Siamak Safavi Fard, Sunil Kaushal, and Noel Parmar (09 CR 247)

Siamak Safavi Fard, 50, East Dundee, Sunil Kaushal, and Noel Parmar, 39, Skokie, are all charged with wire fraud. The indictment alleges that between April 2001 and January 2005, Fard, who owned various financial companies, Kaushal, and Parmar, a loan processor, fraudulently obtained more than $4.2 million in mortgage loans from numerous financial institutions and lenders, including loans secured by 2713 Norma Court, Glenview; 2962 North Oakley, Chicago; 728 North Ada Street, Chicago; 3057 W. 55th Street, Chicago; and 1947 West Chicago Avenue, Chicago.

According to the indictment, Fard, Kaushal and Parmar purchased the residences individually or through nominees who were promised that their credit ratings would increase by serving as the nominal owners; that Fard would be responsible for all down payments and ongoing mortgage payments; that the nominees would have no out-of-pocket expenses; that the residences would be rehabbed and resold at a profit; that the nominees would be removed from the titles of the residences after they were resold for profit; and that nominees would receive money for serving as the nominal owner.

Fard, Kaushal and Parmar allegedly prepared loan applications on behalf of the nominees which contained false statements regarding the nominees’ employment, income, assets, citizenship status, intention to occupy the premises as a primary residence, and the source of down payments. Fard and Kaushal also allegedly created documentation to support the fraudulent loan applications, including false verifications of employment, false pay stubs, false tax returns, false IRS W-2 forms, false leases in support of false rental income, false Tax Certification letters from alleged tax preparers regarding the alleged preparation of nominee tax returns, false bank account statements, false verifications of deposits, false verification of existing mortgages, false appraisals, and forged powers of attorney. Fard, Kaushal and Parmar then allegedly submitted fraudulent loan applications and false supporting documentation to lenders.

According to the indictment, Fard, Kaushal and Parmar fraudulently caused lenders to incur losses in the amount of at least approximately $1.1 million.

Nine of the indictments were the product of Operation Madhouse, an undercover investigation conducted by the Federal Bureau of Investigation and the Department of Housing and Urban Development, Office of Inspector General, in which undercover law enforcement agents posed as straw buyers of houses, seeking assistance in financing and closing fraudulent mortgage transactions. In each of the nine cases, multiple real estate professionals worked to carry out the frauds. Each case involved a different fraudulent mortgage loan arranged by a different group of defendants based in the Chicago area.

Those defendants’ roles in the fraudulent transactions, as described in the individual indictments, included, among other things: preparing loan applications and other documents that they knew to contain false information about the undercover agents’ identity, employment, and income; creating (or explaining how the undercover agents could create) fraudulent banking information; fabricating income tax returns; creating fictitious verifications of employment and rental income; creating false appraisals; and submitting the bogus applications and supporting documents to the lenders.

In each of the undercover transactions, a cooperating individual represented that he was selling a house to a nominee buyer who intended to walk away from the property and default on the mortgage after the transaction closed. In reality, the nominee buyers were undercover agents, as were paralegals who assisted in closing the real estate transactions. The houses bought with the fraudulently obtained mortgage loans were actually owned by the federal government. Instead of defaulting on the fraudulently obtained loans after the closings (as the undercover agents had told the defendants they intended to do), the government fully repaid the lenders after each transaction closed.

The nine loans involved in the undercover project totaled approximately $1.4 million. In the tenth case, which did not result from the undercover investigation, the defendants are alleged to have fraudulently obtained approximately $4.2 million in loans, causing losses in excess of approximately $1.1 million.

Mortgage fraud often happens with the active participation of professionals in the industry,” said Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois. “It is particularly disturbing that the fraud has continued notwithstanding widespread publicity about the real and serious consequences of mortgage fraud. We will continue to use undercover operations like Operation Madhouse so that corrupt professionals will have to wonder whether the person sitting across the closing table from them is actually an undercover agent,” he added.

Mr. Fitzgerald announced the charges together with Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Barry McLaughlin, Special Agent-in-Charge of the U.S. Department of Housing and Urban Development, Office of Inspector General, in Chicago. Officers from the Burbank and Hickory Hills Police Departments also assisted with the investigation.

Mr. Grant said, “We will not stand by while real estate professionals and others exploit the financial system for their personal gain. Mortgage fraud – and the foreclosures and boarded up houses that often follow from it – has a real and significant effect on neighborhoods and property values. The FBI is working tirelessly in every part of the country to protect communities and financial institutions from the effects of mortgage fraud.

All of the charges announced today are felonies and carry maximum penalties of 20 years in prison and a $250,000 fine on each count of mail and wire fraud, and 30 years in prison and a $1 million fine on each count of mail or wire fraud affecting a financial institution. If convicted, the Court would determine the appropriate sentence to be imposed under the advisory United States Sentencing Guidelines. Each indictment also includes a forfeiture allegation to recover from the defendants the proceeds of their schemes.

The Indictments contain only charges and are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Be Sociable, Share!

10 responses to Illinois Mortgage Fraud Sting Nets 24 Defendants

  1. These are minor players compared to many others in the mortgage fruad business in Illinois. Someday, I pray you will post some of their names. God will have His final say on this matter soon.

  2. Agreed with comment #1. I liken this to the post-9/11 ordeal flyers go through (taking off shoes, belts, etc..) while cargo is STILL un-screened. The government can say “hey look, we are doing something, don’t forget to re-elect us”.

    What these fraudsters did was wrong but they did not bring the country to it’s collective financial needs. The mortgage company CEOs that did are flying away with their Golden parachutes so Pat Fitzgerald and his cronies had to do something to make the citizens feels as though they are not totally impotent!

  3. This sting operation stinks of entrapment. As a taxpayer, I’m pretty satisfied to see them find 24 people involved in fraud, but I will not be happy to see them waste money if the cases get thrown out because of weak evidence and overzealous undercover agents. How many of these professionals just did their jobs versus how many were active participants in the frauds? How many of these professionals are so tainted by this that it won’t matter if they are found innocent, they’ve been tried and hanged in the newspaper?

  4. I’m glad to see that the FBI has decided to get rid of the mortgage fraud perps who have funny sounding names? Now why don’t you go after people who have names like, Bobby, Julio, Lisa, Fred, Nina and Daniel? Also, why do you need fake people to prosecute people like this? The system protects the perpetrator by villifying the victims. Therefore, we live in a society where some people are ‘more equal’ than others because of wealth attained through illegal and immoral activities. It takes one hour to ruin a poor person’s life by walking into a den of thieves with proper credentials but it takes years or NEVER to even convict them. When the most important financial decision somebody can make is laden with fraud and corruption. How can anyone trust the government to ever help them. Meanwhile, the “beat goes on” everyday and the real estate industry has become the joke because the punchline was all too often “the people.”

  5. Whether it’s a big time crook or a pathetic little crook who cares? Whether his name is Bob or Mohamad..who gives a crap? Lock them up. These criminals have ruined many lives..and if you foolishly think that these THUGS have learnt a lesson think again.
    And remember that the real players are those well connected THUGS at AIG, Countrywide, GMAC and others, and those criminals are still roaming the fields…the sad part is that these THUGS are being rewarded…YES REWARDED by the administration for their THUGERY.

    Don’t forget the Kramers of the world!! you know that fool on Msnbc? What did he say a few months ago?
    OH..we have to bail out the banks…otherwise this is going to be the end as we know it he said…Now we all know what that bail out money did..don’t we?

    A truly sad state of affairs.

  6. This is soooooo stupid that they set up these people. That is entraptment 100%, they went after these little guys how about the big guys at the bank who approved all these loans for years. 3 years ago they were giving away loans to anyone without even verifying their income (stated) what did they think people were going to do, this is america and americans have it in their blood to work as little as possible and try to make as much money as possible. And as far as they all having wierd names, dont we find it odd that these people are all Arabs or middle eastern????? muslim????wow thats really strange dont you think??? maybe its a good case of prejeduce???? think about it, I think all the people arrested should counter sue the fbi!!!!!

  7. I think that it is a good point to note their common ethnicity to their names. But the real fact is that if this many Arabs, or whatever they may be, are doing this then how many other people are getting away with this BS. The banks just hand out money to shady real estate loans without the proper respas and employment verifications, fake appraisals, etc… What sort of world do we live in NOW where fraud perpetrators and con artists have more rights than their victims? After many people fall victim to them, they are the ones who are to blame. Obviously, this thing has been going on for a lot longer than anyone cares to research. The media doesn’t talk about the human aspect of this story. Just about the Wall Street swindlers. If you see many of the stories posted here, the names many times are ethnic instead of white bread.

  8. It doesn’t matter if they tried to entrap them.. They know right from wrong. No matter what their nationality.

    It is almost like the Dateline series to Catch a Predator… do you feel sorry for them? If they lie for you, they will lie to you…

    These brokers probably bullied anyone in their path that tried to stop them. They deserve to get caught and persecuted.

    As an underwriter, I had my fill of these types of brokers. Good riddance to bad rubbish.

  9. I got my loan through Abe Karn and many of the people listed with him were involved. They are all lieing a**es and are getting what they deserve HOPEFULLY!!!!!

  10. people like sandy, who get the loan from these people are just as aware of the fraud taking place. They need to be just as liable as mortgage people.
    and plus, IF your paperwork needs to be falsified for you to purchase a home, perhaps that could be a BIG AHA! SIGN that you can’t afford one and shouldn’t be buying in first place. (Sandy!)

Leave a Reply

*

Text formatting is available via select HTML.

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>