Seven Suspects Arrested in $6.2 Million Mortgage Fraud Scheme
In a press release from California Attorney General Kamala Harris, seven suspects have been arrested for their involvement in a mortgage fraud scheme that defrauded more than 1,550 homeowners across the state, who sought loan modification services during the foreclosure crisis.
The felony mortgage fraud complaint alleges that ringleader Nehad “Nick” Ayyoub Ayyoub, 57, was the president of fraudulent companies Firm Loans, Insurance and Investments Inc. and First Choice Debt Solutions Inc. He, along with his six colleagues – Ghydan Ayyoub Rabadi, 38, of Los Angeles, Zaid Rabadi, 49, of Los Angeles, James Clemons, 55, of Riverside County, Wissam Ismail, 32, of Riverside County, Eddie Mercado, 57, of San Bernardino, and Majid Safaie, 60, of Orange County – illegally charged up-front payments for loan modification services, and lied about the services they actually provided.
“These individuals profited from the fear and desperation of hard working Californians who were simply fighting to keep their homes during the height of our state’s foreclosure crisis,” says Ms. Harris. “This kind of predatory activity is reprehensible.”
Reportedly, Mr. Ayyoub and his colleagues told their desperate clients that their company had attorneys who would negotiate mortgage adjustments for them, that their loan modifications had no risk of failure, and they would receive a refund of the illegal up-front payment if they were dissatisfied. They also said they had special contacts with lenders, which gave them an advantage for getting a lower monthly payment for their clients.
Mr. Ayyoub and his colleagues told home owners to stop paying their mortgages and instead give the mortgage payments to the businesses while the business obtained lower mortgage payments. Instead, victims defaulted on their mortgages, according to court documents.
The indictment against the seven mortgage fraud suspects alleges they engaged in 24 counts of felony grand theft, personal and corporate income tax evasion, and conspiracy.
Mortgage Fraud in South Carolina
Mortgage fraud is the misrepresentation of information or the omission of information on a mortgage application in order to obtain a loan or obtain a higher loan offered by the lender had they known the truth.
The two main schemes used to commit mortgage fraud include “flipping properties” and inflating appraisals. While “flipping” properties is legal, it becomes illegal when a nominee or straw buyer buys the property. A nominee/straw buyer is one who buys the property for another person because the other person already has loans out on other property. If the nominee/straw buyer defaults on the mortgage, which was the case for many with the downturn of the economy, the investor may face charges of fraud for using deception to obtain the loan.
The Strom Law Firm Protects Mortgage Fraud Whistleblowers in South Carolina
If you have direct knowledge of fraud against the government and believe you have a qui tam or whistleblower case, whether it is against a for-profit long term care facility, a technology corporation, or mortgage fraud case, the attorneys at the Strom Law Firm can help. We offer free, confidential consultations so you can discuss the facts of your case with impunity. Contact us today. 803.252.4800