Eitan Maximov, 39, a citizen of Israel and lawful permanent resident of the United States, was convicted after a six-day jury trial on one count of conspiracy to commit wire and bank fraud and one count of wire fraud as a result of his leadership in a cash-back mortgage fraud scheme that took place during 2006-2008. The defendant was taken into custody following the jury verdict and his sentencing is set before U.S. District Judge David G. Campbell on February 27, 2012.
The defendant played a leadership role in the underlying conspiracy which involved at least nine residential properties in the Scottsdale, Arizona, area. The objective of the conspiracy was to recruit unqualified borrowers as straw buyers, submit fraudulent loan applications on their behalf and on his own behalf, obtain mortgage loans in excess of the selling price of the property and then take the excess amount of the loans out through escrow in what is known as a “cash back” scheme.
The defendant recruited straw buyers and worked with an escrow officer in the scheme to defraud and then benefitted from their involvement in the scheme. Most of the properties were purchased or attempted to be purchased for in excess of a million dollars. Following the funding of the loans, the defendant received “cash back” or proceeds that he used to live a lavish lifestyle and further perpetuate the scheme.
All of the homes purchased through the conspiracy have been foreclosed or sold at a loss to the lending institutions. The conspiracy resulted in approximately $5,000,000 in loans obtained by fraud and an actual and intended loss to lending institutions of nearly $6,500,000.
A conviction for conspiracy to commit wire and bank and wire fraud carries a maximum penalty of 30 years in federal prison, a $1,000,000 fine or both. In determining an actual sentence, Judge Campbell will consult the U.S. Sentencing Guidelines, which provide appropriate sentencing ranges. The judge, however, is not bound by those guidelines in determining a sentence.
The investigation in this case was conducted by the Federal Bureau of Investigation. The prosecution was handled by Kevin M. Rapp and Monica B. Klapper, Assistant U.S. Attorneys, District of Arizona, Phoenix.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force 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 who, working together, bring to bear 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. For more information about the task force visit: www.stopfraud.gov.
Acting U.S. Attorney Ann Birmingham Scheel said: “During the height of the real estate boom, this defendant saw an opportunity to profit and he took it. He furthered his scam by creating fictitious companies and billed himself as an investor. However, the only investment he made was in his lavish lifestyle that eventually crashed down on him.”
“Yesterday’s guilty verdict illustrates the commitment by the FBI, our law enforcement partners, and the U.S. Attorney’s Office in combating mortgage fraud,” said FBI Special Agent in Charge James L. Turgal. “When individuals use the housing market to intentionally defraud the public for their own personal financial gain, using other people’s money and dreams to live lavish lifestyles, it damages our economy and further exacerbates the mortgage crisis. The FBI’s Mortgage Fraud Task Force will continue to investigate those who orchestrate and participate in various mortgage fraud schemes in order to protect the public against those who would seek to further damage our local and national economy.”