Mohammed Gharbi, Austin, Texas, recently appealed his mortgage fraud conviction and one year sentence arguing that his Constitutional right to counsel was violated. On December 17, 2007, the 5th Circuit Court of Appeals affirmed the conviction, however vacated the sentence and remanded the case for re-sentencing. As of January 1, 2008, Gharbi has not yet been resentenced.

As previously reported by Mortgage Fraud Blog, a federal grand jury in Texas returned a 16-count indictment against 20 Austin-area residents, charging them with participating in a fraud and money laundering scheme that defrauded federally insured financial institutions and mortgage lenders of more than $15 million.

According to the indictment, from March 27, 2001 to January 23, 2004, the defendants participated in a real estate flip-for-profit scheme where properties in Central Texas were purchased at or near market value, then sold to unqualified buyers at artificially inflated prices. The defendants collected large sums of cash while fraudulently inducing lenders to fund the real estate loans based upon materially false statements, representations and promises provided by the defendants.

Mohammad H. Gharbi was convicted of Conspiracy to Commit Mail Fraud, Wire Fraud and Bank Fraud. Of the twenty-five individuals indicted, nineteen pleaded guilty, Firooz Deljavan, his wife and brother remained fugitives, one defendant was deceased and one defendant was dismissed from the case. Firooz Deljavan was the owner and operator of Austin Realtors Network, Inc.