Hussein “Sam” Nazzal, 58, Dearborn, Michigan, a businessman, and Edward A. Schneider, 59, Dearborn, an attorney, were found guilty of multiple counts of fraud and commercial bribery after a three-week trial before U.S. District Judge David M. Lawson.
As part of the same prosecution, guilty pleas were entered by Eric Morton, 41 Wixom, a former assistant vice president of Fifth Third Bank, Ross Carey, 49, Farmington, a former vice president of Minnesota Title Agency, Majed Tawbe, 43, Dearborn, a former owner of several local gas stations and Mounif Zeaiter, 47, Detroit.
The evidence at trial showed that from 2003 to 2007, Nazzal and Schneider conspired to defraud Fifth Third Bank by using straw buyers, false tax returns, inflated financial statements, and phantom down payments in a series of commercial loan transactions involving Detroit area businesses and gas stations. Nazzal then submitted false and fraudulent payoff letters for mortgages and pre-existing liens when, in fact, none existed, so that he or one of his companies could obtain payouts at the respective closings. Schneider, the treasurer of record for two of Nazzal‘s companies, separately obtained closing funds by submitting fraudulent invoices for attorneys’ fees. Nazzal and Schneider were also convicted of paying bribes to Morton, a former vice president at the bank, in connection with the fraudulent loans. Nazzal was also convicted of obstruction of justice by falsifying records in a federal investigation; the evidence showed that at Nazzal‘s direction, Morton prepared a series of false documents exonerating Nazzal from any wrongdoing. These fraudulent documents were recovered by federal investigators in a safe at Nazzal‘s house during an April 2010 search warrant.
Nazzal and Schneider were also convicted of conspiring to defraud Standard Federal Bank (now Bank of America) by preparing false documents relating to $750,000 in fraudulent mortgages and then recording them ahead of the bank to effectively jump the bank’s lien on the collateral. The evidence showed that Nazzal had arranged for Carey and another associate to provide false testimony in a suit to quiet title in Oakland County Circuit Court so that Nazzal would win the case and pocket $750,000.
Nazzal was also convicted of a similar lien jumping conspiracy involving Comerica Bank and a false $500,000 mortgage.
Schneider‘s law license was revoked by the State Bar of Michigan in August 2011 in connection with an unrelated matter.
Sentencing has been set for August 5, 2013. Bond was continued as to defendant Nazzal over the government’s objection. Schneider‘s bond was also continued.
United States Attorney Barbara L. McQuade, Robert D. Foley, III, Special Agent in Charge of the Detroit, Detroit Field Office of the Federal Bureau of Investigation; Giovanni Tiano, Special Agent in Charge of the Dearborn, Michigan Office of the Department of Homeland Security-Office of Inspector General; and Jeffrey Frost, Special Agent in Charge of the Detroit, Michigan Office of U.S. Secret Service, announced the verdict.
The case was prosecuted by Assistant United States Attorneys Bruce Judge and Erin Shaw. The case was investigated by the FBI, DHS-OIG, DHS-ICE, and USSS.
“White-collar criminals may use sophisticated methods, but their crime is nothing more than stealing other people’s money,” McQuade said. “While banks suffered the direct loss here, when banks are victimized, we all pay the price in the form of higher rates and damage to our banking system and economy.”
FBI Special Agent in Charge Foley stated, “Individuals in positions of trust who engage in acts of bribery and bank fraud will be pursued and prosecuted. The FBI is dedicated to ensuring these criminals face severe penalties for their illegal acts.”
“Fraudulent loan schemes such as this have evolved significantly over the last several years in our area,” said Jeff Frost, Special Agent in Charge of the U.S. Secret Service Detroit Field Office. “Cooperation between law enforcement has allowed us to focus our resources and respond quickly to uncover criminal activity such as this type of financial fraud.”
Special Agent in Charge Giovanni Tiano stated, “Let these convictions stand as an example that the Department of Homeland Security, Office of Inspector General, will not tolerate individuals that attempt to corrupt our nation’s financial institutions. These types of despicable acts adversely affect our economy and ultimately harm honest citizens.”