United States Attorney Laura E. Duffy announced that Simon Saed Alizadeh was arraigned in federal court in San Diego today on an indictment charging Alizadeh and Kian Ashkanizadeh with conspiracy, wire fraud, mail fraud, and money laundering in connection with a mortgage fraud scheme involving four expensive homes on Triton Street in Carlsbad, California. The charges were returned by a federal grand jury on February 2, 2012. Co-defendant Ashkanizadeh was arraigned on the charges last week.

According to the indictment, the defendants, who worked at a mortgage company called Southern California Finance, recruited family members and friends to supply their names and signatures on mortgage loan applications as the purported buyers for these million-dollar homes. The defendants then fabricated the job titles, income, and assets of the purported buyers, so they could qualify for approximately $1 million in mortgage funding on each of the properties. The defendants arranged for $200,000 in sham “consulting fees” to come out of each transaction, and another $45,000 in fees for “construction fees”—but no consulting or construction was ever performed, according to the charges. Instead, the defendants took for themselves most of the extra $245,000 in fees paid out from each of the four transactions. According to the indictment, the defendants disguised the funds by first funneling the payments through bank accounts owned by friends and relatives, and then causing the funds to be withdrawn or transferred to their own bank accounts.

The defendants will next appear before United States District Judge Irma E. Gonzalez for a motion hearing on April 3, 2012, at 2:00 p.m.

Criminal Case No. 12CR0403-IEG

DEFENDANTS

Simon Saed Alizadeh Kian Ashkanizadeh

SUMMARY OF CHARGES

Count 1: Title 18, United States Code, Section 371—Conspiracy Maximum penalties: five years’ imprisonment, $250,000 fine or twice the gross pecuniary gain or twice the gross pecuniary loss (whichever is greatest), $100 special assessment, three years of supervised release

Count 2: Title 18, United States Code, Section 1341—Mail Fraud Maximum penalties: 20 years’ imprisonment, $250,000 fine or twice the gross pecuniary gain or twice the gross pecuniary loss (whichever is greatest), $100 special assessment, three years of supervised release

Counts 3-4: Title 18, United States Code, Section 1341—Wire Fraud Maximum penalties: 20 years’ imprisonment, $250,000 fine or twice the gross pecuniary gain or twice the gross pecuniary loss (whichever is greatest), $100 special assessment, three years of supervised release

Counts 5-8: Title 18, United States Code, Section 1956(a)(1)(B)(i)—Money Laundering Maximum penalties: 20 years’ imprisonment, $500,000 fine or twice the value of the property involved in the transaction (whichever is greatest), $100 special assessment, three years of supervised release

INVESTIGATING AGENCY

Federal Bureau of Investigation

An indictment itself is not evidence that the defendants committed the crimes charged. The defendants are presumed innocent until the government meets its burden in court of proving guilt beyond a reasonable doubt.

SAN DIEGO, CA—Three individuals charged with conspiracy to commit wire fraud and mail fraud for their roles in operating a fraudulent mortgage loan modification business pled guilty today in federal court in San Diego, announced United States Attorney for the Southern District of California Laura E. Duffy. According to the plea agreements, Ziad Nabil Mohammed Al Saffar and Sara Beth Bushore Rosengrant admitted that they operated the fraudulent loan audit and modification business, located in San Diego, California, under the names “Compliance 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.

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 “audit” of their home mortgage loans, supposedly to identify “violations” 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.

According to court records, among the misrepresentations made to customers were claims that CAS and CAS Group were affiliated with the United States Department of Housing and Urban Development (HUD), that they were participating in a federal program called “Hope for Homeowners,” that the audit fees were tax deductible, and that CAS and CAS Group had an “attorney” 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 “good faith” payments were necessary to reduce their loan balance and interest rate, and that those payments would be kept in an “escrow account” by CAS or CAS Group. The false representations also included telling homeowners that banks demanded a “settlement 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.

As part of their plea agreements, defendants agreed to pay restitution to the victims of their criminal conduct to be determined by the court. Each defendant also agreed to make a restitution payment in an amount of $30,000 prior to the sentencing hearing. Today’s guilty pleas are subject to final acceptance by United States District Court Judge Anthony J. Battaglia at or before sentencing. The sentencing hearing is scheduled on April 27, 2012 at 9:00 a.m., before Judge Battaglia.

This case is the product of an investigation by agents of the Federal Bureau of Investigation and the Office of the Special Inspector General-Troubled Asset Relief Program (TARP) 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. To read the latest FBI mortgage fraud report visit www.fbi.gov.

This case was brought in coordination with the Financial Fraud Enforcement Task Force, which was established 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 working together to launch 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.

The Special Inspector General for the Troubled Asset Relief Program co-chairs the task force’s Rescue Fraud Working Group. For more information on the task force, visit www.StopFraud.gov. Advice from federally approved housing counselors is free, as are mortgage modifications under Home Affordable Modification Program (HAMP). For more information, visit www.makinghomeaffordable.gov. SIGTARP investigates fraud, waste, and abuse in connection with TARP. To report suspected illicit activity involving TARP, dial the SIGTARP Hotline at 1-877-744-2009.

NEW BERN—United States Attorney Thomas G. Walker announced that in federal court yesterday GARY KEVIN COATS, pled guilty before United States Magistrate Judge David W. Daniel to bankruptcy fraud, in violation of Title 18, United States Code, Section 157(3).

According to the criminal information filed on December 20, 2011, COATS filed a voluntary petition for a Chapter 7 bankruptcy on February 10, 2009. A Chapter 7 Trustee was appointed and COATS, then a licensed realtor and operator of Featured Properties, LLC, was notified by an Order and Notice to Debtor that all property belonged to the Chapter 7 estate. This property included a Raleigh condominium to which COATS had declared he intended to surrender.

In March, 2009, COATS was contacted by a realtor who represented clients wishing to purchase the condo. In April, 2009, COATS, using the buyers’ assumed name and forged signatures and initials, submitted an offer to the Trustee to purchase the condo. Over the next couple of weeks, COATS, using the assumed name, through e-mails, encouraged the Trustee to take the buyers’ offer. In May, 2009, the Trustee filed a motion to approve the private sale with the United States Bankruptcy Court. Unbeknownst to the Trustee, the buyers’ realtor and COATS had negotiated a side agreement that the buyers would pay additional funds to COATS outside of closing that would not go to the Trustee. On June 5, 2009, the Trustee contacted the closing attorney and learned of the side agreement. On June 10, 2009, COATS, posing as an attorney, e-mailed the realtor regarding a cease and desist letter sent to COATS under his assumed name concerning the side agreement. Later that month, the attorney whose name had been used by COATS, contacted the Trustee notifying the Trustee that he did not e-mail the realtor nor did he know COATS.

COATS will be sentenced in 90 days.

Investigation of this case was conducted by the Federal Bureau of Investigation. Assistant United States Attorney S. Katherine Burnette is prosecuting the case.

Courtesy FBI