Six defendants have been charged previously, including Syed A. Babar, 28, New London, Connecticut, with various mortgage fraud offenses stemming from the alleged scheme. The second superseding indictment charges four additional defendants, Marshall Asmar, 40, Milford, Connecticut; Wendy Werner, 45, Sarasota, Florida; Rehan Qamer, 38, formerly of Ashtabula, Ohio, and Mohammad Saleem, 39, formerly of Flushing, New York.
The indictment alleges that, between August 2006 and May 2010, Syed A. Babar, also known as “Ali” and “Asad,” was the de facto leader and organizer of a conspiracy to obtain millions of dollars in residential real estate loans, including loans insured by the Federal Housing Administration, through the use of sham sales contracts, false loan applications and fraudulent property appraisals. The indictment alleges that Asmar and Werner entered into sales contracts with straw purchasers to sell homes for a price higher than the actual price that Asmar and Werner, as the sellers, would receive. Members of the conspiracy – which included a mortgage broker, two attorneys and a real estate appraiser – submitted false documentation in connection with loan applications that were submitted, including fraudulent appraisals of the properties being purchased in order to justify the inflated sales price and the loan amount being sought to fund each purchase. The indictment further alleges that members of the conspiracy created a fictitious construction company called “Sheda Telle Construction, LLC,” in order to divert fraud proceeds to it and, in some cases, to falsely justify the artificially inflated sales price of houses based on renovations purportedly made to the property that, in fact, did not occur. The co-conspirators then split the fraud proceeds.
It is alleged that, in August 2006, Werner, through her company, Marbo Restorations, LLC, sold three houses: 35, 37 and 41 Lake Street, Norwich, Connecticut, to Qamer, a straw purchaser working with Babar. The fraudulently inflated sales prices for 35, 37 and 41 Lake Street were $260,000, $270,000 and $270,000, respectively, and Qamer obtained residential real estate loans to purchase homes for those amounts. Werner provided Babar with approximately $283,000 of the proceeds generated from the sale of the three houses. Babar then wrote 10 checks totaling approximately $179,000 to Qamer.
Saleem also is alleged to have served as a straw purchaser during the conspiracy. Babar is alleged to have recruited and paid straw purchasers up to $20,000 to nominally purchase homes.
Contrary to the representations made on the loan applications, it is alleged that the straw purchasers never occupied the houses as their primary residences, failed to make payments on the loans and the properties went into foreclosure, including the three Lake Street properties that Qamer purchased from Werner.
The alleged mortgage fraud scheme involved approximately 35 properties and loans obtained in the amount of approximately $10 million. Current losses from the scheme are estimated to be at least $2.5 million.
The indictment charges Asmar, Werner, Qamer and Saleem with one count of conspiracy to commit wire fraud, which carries a maximum term of imprisonment of five years. Asmar and Werner also are charged with eight counts of wire fraud, which carries a maximum term of imprisonment of 20 years on each count. The indictment also charges Asmar with four counts of making false statements, which carries a maximum term of imprisonment of five years on each count. Finally, the indictment charges Werner and Qamer with one count of mail fraud, which carries a maximum term of imprisonment of 20 years.
The second superseding indictment was returned on July 29, 2010, and unsealed on September 15, 2010. Asmar was arrested on August 20, 2010. He entered a plea of not guilty to the charges and is released on a bond in the amount of $250,000, fully secured by real property. Werner was arrested in Florida on September 10, 2010. On September 21, 2010, she appeared before United States Magistrate Judge Donna F. Martinez in Hartford and entered a plea of not guilty to the charges. She is released on a bond in the amount of $85,000, fully secured by real property.
Qamer and Saleem are currently being sought by law enforcement.
David B. Fein, United States Attorney for the District of Connecticut, announced the second superseding indictment charging the total of 10 individuals with various offenses related to their alleged participation in a mortgage fraud conspiracy.
U.S. Attorney Fein stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
U.S. Attorney Fein stated that the investigation is ongoing.
This case is being investigated by the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development – Office of Inspector General, and is being prosecuted by Assistant United States Attorneys Eric J. Glover and Susan Wines.
In July 2009, the U.S. Attorney’s Office and the Federal Bureau of Investigation announced the formation of the Connecticut Mortgage Fraud Task Force to investigate and prosecute mortgage fraud cases and related financial crimes occurring in Connecticut. In addition to investigating past mortgage fraud schemes, the Task Force will focus on emerging crime trends that are associated with the growing tide of foreclosures, including foreclosure rescue schemes, and short sale schemes. Citizens are encouraged to report any suspected mortgage fraud activity by calling 203-333-3512 and requesting the Connecticut Mortgage Fraud Task Force, or by sending an email to firstname.lastname@example.org.
The Connecticut Mortgage Fraud Task Force includes representatives from the U.S. Attorney’s Office; Federal Bureau of Investigation; Internal Revenue Service – Criminal Investigation; U.S. Postal Inspection Service; U.S. Department of Housing and Urban Development, Office of Inspector General; Federal Deposit Insurance Corporation, Office of Inspector General, and State of Connecticut Department of Banking.
To report financial fraud crimes, and to learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.