Haider Zafar, 35, formerly of Dublin, Ohio, has been arrested in connection with a $10 million fraud scheme involving false representations about investments in Pakistani real estate.
The indictment charges Zafar, who now lives in south Florida, with 118 counts of wire fraud, 13 counts of money laundering, one count of filing a false federal income tax return, and three counts of willfully failing to file a federal income tax return with the IRS.
The indictment alleges that Zafar made representations that his mother’s brother was a high ranking official in the Pakistani government, and that he and members of his family in Pakistan had knowledge of real estate that the government of Pakistan planned to acquire from private citizen-owners for purposes of building infrastructure and military facilities. Zafar stated he could purchase the real estate and sell it to the government of Pakistan for a significant profit. Individuals could invest money towards the purchase of the real estate, and would share the profits from such transactions.
Zafar allegedly instructed an individual to wire transfer money to an Ohio bank account in his name for the purchase real estate.
Zafar allegedly told that individual that he would receive the return of his money and a profit by wire transfer. Zafar subsequently then told this individual that the proceeds of the Pakistani real estate transaction totaled approximately $90,000,000, that this money was being held in Pakistan, and that the proceeds could not be transferred by wire to a bank account in the United States because Zafar was prohibited from transferring funds to the United States.
Between January 4, 2008 and February 25, 2010, Zafar allegedly caused this individual and two businesses owned by this individual and/or relatives and associates of this individual to wire transfer $10,115,000 to Zafar.
Instead of buying real estate in Pakistan, Zafar allegedly used the funds from the fraud scheme to buy multiple luxury automobiles, including a 2009 Mercedes-Benz roadster, three 2009 Mercedes-Benz sedans, a 2009 Aston-Martin DB9 convertible, a 2009 Maserati Gran Turismo, a 2009 Aston-Martin Vantage roadster, a 2010 Lamborghini LP560 Spyder, a 2009 Rolls Royce Phantom convertible, two Rolex watches, a Cartier watch, a Bulgari watch band, and several pieces of jewelry, including a loose diamond and two rings, among other items.
In addition, Zafar allegedly filed a fraudulent 2007 federal income tax return with the IRS which reported taxable income of zero, whereas Zafar allegedly omitted reporting approximately $221,500 in taxable income. Also, for each of the 2008 through 2010 income tax years, Zafar willfully failed to file a federal income tax return with the IRS. Zafar allegedly received $4,976,000 in gross income in 2008, $4,519,000 in gross income in 2009 and $620,000 in gross income in 2010.
IRS Special Agents arrested Zafar at Port Columbus Airport on May 25, 2013. He has been in custody since his arrest.
Wire fraud is punishable by up to 20 years in prison and a fine of $250,000. Money laundering is punishable by up to 10 years in prison and a fine of $250,000. Filing a false income tax return with the IRS is punishable by up to three years in prison and a fine of $250,000. Willfully failing to file an income tax return with the IRS is punishable by up to one year in prison and a fine of $25,000.
The indictment also contains a forfeiture allegation which calls for a money judgment in the amount of $10,115,000 and the forfeiture of numerous pieces of jewelry.
Carter M. Stewart, United States Attorney for the Southern District of Ohio and Kathy A. Enstrom, Acting Special Agent in Charge, Internal Revenue Service (IRS), Criminal Investigation, Cincinnati Field Office announced the indictment.
U.S. Attorney Stewart acknowledged the investigation by special agents of IRS-Criminal Investigation and the assistance of the FBI office in Miami, Florida as well as Assistant United States Attorney Dale Williams who is representing the United States in this case.
“Real estate investment fraud is like a ‘house of cards.’ The underlying structure can fall apart at any time and leave many investors in financial ruin,” said Kathy A. Enstrom, Acting Special Agent in Charge, IRS, Criminal Investigation.