Isaak Khafizov, 27, Queens, New York, a former owner of American Home Recovery (AHR), a mortgage loan modification business, was sentenced in Manhattan federal court to nine years in prison in connection with a scheme to defraud distressed homeowners and lenders.
Khafizov was convicted in May 2012 of one count of conspiracy to commit mail and wire fraud, one count of mail fraud, and two counts of wire fraud, after a ten-day jury trial presided over by U.S. District Judge George B. Daniels, who also imposed the sentence.
According to the Superseding Indictment filed in Manhattan federal court, other court documents, and statements made during court proceedings:
In the spring of 2008, Khafizov, Jaime Cassuto, and David Cassuto founded AHR, a mortgage modification business that operated in Manhattan. From the spring of 2008 through the summer of 2009, Khafizov used AHR to commit a systematic fraud that preyed on distressed homeowners. Khafizov and AHR’s salespeople fraudulently induced distressed homeowners all over the United States to pay AHR thousands of dollars in up-front fees, by falsely promising the homeowners that: (1) AHR could get them better interest rates and lower monthly fees, all within a short timeframe; (2) AHR would return the up-front fees if it did not succeed in getting the homeowners the mortgage modifications they desired; (3) the homeowners had been “pre-approved” for mortgage modifications by their lenders; (4) AHR was affiliated with government agencies and programs established by the Economic Stimulus Act of 2008; (5) AHR possessed special expertise in mortgage modifications, and (6) AHR had special relationships with lenders. After receiving up-front fees from the distressed homeowners, Khafizov and AHR did little or no work to try to renegotiate the homeowners’ mortgages. And on those rare occasions when Khafizov succeeded in getting a homeowner a mortgage modification, he typically did so by coaching the homeowner to lie about his or her income and assets on forms submitted to the mortgage lender.
All told, Khafizov and AHR defrauded financially struggling customers across the country out of over half a million dollars in fees. Furthermore, because Khafizov and AHR did not do the work they had promised, and because Khafizov specifically directed the distressed homeowners to stop paying their mortgages and to pay AHR its fees instead, many of AHR’s customers wound up in foreclosure as a result of the scheme.
In addition to his prison term, Khafizov was sentenced to three years of supervised release.
In sentencing Khafizov, Judge Daniels remarked that victims who feared “being thrown out of their homes” were “desperately seeking help” from Khafizov because he “promised to solve what, for most of these people, was the most serious problem that they had ever encountered in their lives.” But Khafizov “took advantage of every one” of them, and “… showed a callous disregard for the consequences of his criminal conduct on the victims he swindled.”
Jaime Cassuto and David Cassuto each pled guilty to multiple counts of fraud in April 2012. They await sentencing.
Preet Bharara, the United States Attorney for the Southern District of New York, announced the sentence.
Mr. Bharara praised the Federal Bureau of Investigation and the Special Inspector General of the Troubled Asset Relief Program for their work on this case.
This case is being prosecuted by the Office’s Complex Frauds Unit. Assistant U.S. Attorneys Niketh Velamoor and Nicole Friedlander are in charge of this prosecution.
Manhattan U.S. Attorney Preet Bharara said: “Isaak Khafizov victimized desperate homeowners who were struggling to make their mortgage payments. He preyed on their fears of losing their homes by lying about miracle cures for their financial problems. Khafizov pretended it was all made possible by government programs that did not exist, by special, powerful relationships with banks that he did not have, and by expertise and experience that he never possessed.”