United States Attorney
Southern District of California
Friday, July 20, 2012
Operators of Mortgage Loan Modification Business Sentenced in California for Conspiracy to Commit Fraud
SAN DIEGO, CA B Three individuals charged with conspiracy to commit wire fraud and mail fraud for their roles in operating a fraudulent mortgage loan modification business were sentenced today in federal court in San Diego, announced U.S. Attorney for the Southern District of California Laura E. Duffy. U.S. District Court Judge Anthony J. Battaglia sentenced Ziad Nabil Mohammed Al Saffar to serve 21 months in federal prison and Sara Beth Bushore Rosengrant to serve 12 months home detention as a part of a three-year term of probation. In their guilty pleas, each admitted that they operated the fraudulent loan audit and modification business, located in San Diego, under the names ACompliance Audit Solutions Inc.@ (CAS) and CAS Group, Inc., (CAS Group). Daniel Al Saffar admitted that he worked as a sales representative in connection with the operation and was sentenced to serve 6 months home detention as a part of a three-year term of probation. The court also ordered the defendants to pay restitution to the victims of their criminal conduct. Each defendant made a restitution payment in an amount of $30,000 prior to today’s sentencing hearing. As a part of his plea agreement, Ziad Nabil Mohammed Al Saffar, who is not a citizen of the United States, stipulated to being deported following the completion of his sentence.
According to court documents, the defendants targeted homeowners who were unable to afford their mortgage payments and falsely advertised to them that CAS and CAS Group were affiliated with the federal government. The defendants admitted to using false and fraudulent statements and representations to induce customers to purchase an Aaudit@ of their home mortgage loans, supposedly to identify Aviolations@ in the loan documents that could then be used to force banks to renegotiate their loans. The audit fees ranged from $995 to $3,500.
U.S. Attorney Duffy praised the coordinated efforts of investigators, prosecutors and regulators to combat the problem of loan modification fraud.
According to court records, among the misrepresentations made to customers were claims that CAS and CAS Group were affiliated with the U.S. Department of Housing and Urban Development (HUD), that they were participating in a federal program called AHope for Homeowners,@ that the audit fees were tax deductible, and that CAS and CAS Group had an Aattorney@ on staff who could finalize negotiations with banks on behalf of homeowners. The indictment further alleged that, as part of the conspiracy, the defendants fraudulently induced certain homeowners to make payments to CAS or CAS Group by falsely promising that such Agood faith@ payments were necessary to reduce their loan balance and interest rate, and that those payments would be kept in an Aescrow account@ by CAS or CAS Group. The false representations also included telling homeowners that banks demanded a Asettlement fee@ in order to modify a first mortgage and eliminate a second mortgage; that a one-time payment to cover taxes and insurance on the property was needed; and that the homeowners should make their monthly mortgage payments to CAS or CAS Group, instead of to their lender, and that the funds would be held in an escrow account for the benefit of a new lender.
This case is the product of an investigation by agents of the FBI and the Office of the Special Inspector General - Troubled Asset Relief Program (SIGTARP) and is being prosecuted in San Diego federal court by Assistant U.S. Attorney Joseph S. Green.
Local victims of mortgage fraud may report it at the Internet Crime Complaint Center, ic3.gov or call the FBI at (858) 565-1255.
“Today's sentencings are the result of a fraud scheme that specifically targeted the most vulnerable homeowners struggling to cope with the collapse in the housing market,” said Christy Romero, Special Inspector General at SIGTARP. “Ziad al Saffar, Sara Beth Rosengrant and Daniel al Saffar mass marketed their scam with Web sites such as www.HAMPnow.org as if it were affiliated with HAMP and other federal mortgage aid programs. That reassurance was nothing more than a lie to dupe victims out of what little money they had left and is evident of a profound disrespect for those suffering through and bearing the brunt of the housing crisis. SIGTARP and its law enforcement partners will continue to pursue TARP-related fraud and bring accountability to American taxpayers.”
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.