Man Admits Role in Mortgage Fraud Conspiracy

Allison Tussey —  February 8, 2011 — 2 Comments

Wilson Nicholas, 28, Groton, Connecticut, pleaded guilty before Chief United States District Judge Alvin W. Thompson in Hartford, Connecticut, to one count of conspiracy to commit wire fraud stemming from his participation in a mortgage fraud conspiracy.

According to court documents and statements made in court, Nicholas, Syed Babar and others engaged in a scheme to obtain residential real estate loans, including loans insured by the Federal Housing Administration (“FHA”), through the use of sham sales contracts, false loan applications and fraudulent property appraisals.

As part of the scheme, Nicholas acted as a straw buyer who allowed his name and identifying information to be used to obtain mortgage loans to purchase two properties in New Haven at fraudulently inflated prices. Specifically, in 2008, Nicholas worked with Babar and others to obtain FHA-insured loans to buy a house at 243 Starr Street, New Haven, Connecticut, at the fraudulently inflated price of $175,000, and a house at 88 Hazel Street, New Haven, Connecticut, for the fraudulently inflated price of $180,000.

Babar had instructed Nicholas to open a joint bank account with an individual whom Nicholas did not know in order to give the appearance Nicholas had access to more money than he actually had. The loan applications also falsely represented where the defendant worked.

After the closings, Nicholas received $40,000 in cash from a co-conspirator and later returned $8,000 to the co-conspirator to be used in another real estate transaction. Nicholas never occupied either of the two houses on which he served as a buyer, and he defaulted on both of them.

The lenders suffered losses of more than $120,000 as a result of these fraudulent transactions.

Judge Thompson has scheduled sentencing for May 6, 2011, at which time Nicholas faces a maximum term of imprisonment of five years and a fine of up to $250,000.

On February 1, 2011, Babar pleaded guilty to multiple federal charges related to his leadership of this extensive mortgage fraud scheme, which has caused losses in excess of $3.2 million to lenders. He awaits sentencing.

David B. Fein, United States Attorney for the District of Connecticut, announced the guilty plea.

This case is being investigated by the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development – Office of Inspector General, and is being prosecuted by Assistant United States Attorneys Eric J. Glover and Susan Wines.

In July 2009, the U.S. Attorney’s Office and the Federal Bureau of Investigation announced the formation of the Connecticut Mortgage Fraud Task Force to investigate and prosecute mortgage fraud cases and related financial crimes occurring in Connecticut. In addition to investigating past mortgage fraud schemes, the Task Force will focus on emerging crime trends that are associated with the growing tide of foreclosures, including foreclosure rescue schemes, and short sale schemes. Citizens are encouraged to report any suspected mortgage fraud activity by calling 203-333-3512 and requesting the Connecticut Mortgage Fraud Task Force, or by sending an email to ctmortgagefraud@ic.fbi.gov.

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.

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Allison Tussey

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2 responses to Man Admits Role in Mortgage Fraud Conspiracy

  1. Guarding against fraud is one of the many reasons why the agencies are requiring lenders to perform quality control audits. Not only that, but quality control also helps protect the lender and the agency from unacceptable risk.

  2. office space in soho February 9, 2011 at 12:43 pm

    Nice information. Its usefulness and significance is overwhelming the way you covered all the basic necessary information is really impressive, good work keep it up.

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