United States Attorney
Northern District of California
September 17, 2010
San Francisco Man Charged with $25 Million Dollar Ponzi Scheme
SAN FRANCISCO – Maher Talal Muhawieh was charged today for perpetrating a Ponzi scheme over the course of almost three years, United States Attorney Melinda Haag announced. According to court documents, Muhawieh allegedly took in more than $25 million from a total of at least 80 victims.
According to information in the Indictment, which was filed yesterday, Muhawieh 31, of San Francisco , told potential victims various lies to get them to lend him money. For example, Muhawieh represented to victims that their funds would be used to purchase and to renovate specific residential properties in San Francisco that would then be sold at a profit. Muhawieh claimed he would make regular and high rates of return for the lenders with limited risk. Muhawieh also represented to victims that their funds were secured by deeds of trust on the residential properties that he represented would be purchased and renovated with the lenders’ funds.
The indictment alleges that Muhawieh operated a Ponzi scheme whereby he used the lenders’ funds to reimburse earlier lenders. In addition, Muhawieh allegedly used the lenders’ funds for a variety of unauthorized activities such as personal expenses and investing in retail businesses located in San Francisco. Unbeknownst to the victims, Muhawieh provided multiple deeds of trust for the properties that purportedly served as collateral for the lenders’ funds; as a result, the deeds of trust did not provide the lenders with adequate security.
Muhawieh is charged in the Indictment with 12 counts of wire fraud, in violation of Title 18, United States Code, Section 1343. The maximum statutory penalty for each count of wire fraud is 20 years imprisonment, a fine of $250,000 or twice the gain or loss, supervised release of three years, and restitution to victims of the alleged scheme. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Muhawieh made his initial appearance in federal court in San Francisco this morning. The defendant was released to a half-way house pursuant to a $375,000 secured bond. The defendant's next scheduled appearance is at 9:30 a.m. on Sept. 21 for a bail hearing before Magistrate Judge Bernard Zimmerman. The defendant is also scheduled to appear before United States District Court Judge Charles R. Breyer at 2:15 p.m. on Sept. 29 for an initial status conference.
Jeff Rabkin is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Helen Yee and M. Elizabeth Garcia. The prosecution is the result of a 15 month investigation by the Federal Bureau of Investigation.
Please note: An Indictment contains only allegations against an individual and, as wit all defendants, Mr. Muhawieh must be presumed innocent unless and until proven guilty.
This law enforcement action is part of the work being done by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit StopFraud.gov.
Case #: CR 10-678 CRB
A copy of this press release may be found on the U.S. Attorney's Office's website at www.usdoj.gov/usao/can.
Electronic court filings and further procedural and docket information are available at https://ecf.cand.uscourts.gov/cgi-bin/login.pl.
Judges' calendars with schedules for upcoming court hearings can be viewed on the court's website at www.cand.uscourts.gov.
All press inquiries to the U.S. Attorney's Office should be directed to Jack Gillund at (415) 436-6599 or by e-mail at Jack.Gillund@usdoj.gov.