Mortgage fraud gets California native prison sentence and $10 million fine.
A man from Huntington Beach, California was found guilty of conspiracy and wire fraud. As a result he was sentenced to six years and six months in prison. He also was ordered to pay $10 million in restitution. The perpetraitor’s name is Maher Obagi. He was found guilty of these charges for playing a role in a giant mortgage fraud scheme in 2008.
Obagi’s co-conspirator was also convicted of conspiracy in the scheme. The co-conspirator’s name is Mohamed Salah. Salah was sentenced to 57 months in prison and ordered to pay $7 million in restitution.
The scheme occurred during the 2008 financial crisis. Prosecutors deemed it a “builder bailout” mortgage fraud scheme. This was because the perpetraitors targeted condominium owners who were having trouble with sales. Obagi and Salah convinced condominium owners in California, Florida, and Arizona to sell to them at a discounted rate. After purchasing the condos at a discounted rate, the perpetraitors recruited buyers with good credit scores to be a part of the scheme. The US attorney’s office said “the builders benefited by making it appear that their condos were selling and maintaining their value…”
As a part of the scheme, Obagi and Salah obtained mortgage loans for the condos. They did this by providing fake employment and income information to mortgage lenders. They also created fake pay stubs, W2 forms, and bank statements. Mortgage lenders lost over $10 million because these loans went into default. The Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae) lost about $1.3 million in the scheme. About 100 condos were fraudulently purchased during this scheme.
These fraudsters sought to cash in on a crisis. Now, ten years later, these opportunists are in a crisis of their own that isn’t going away anytime soon.