February 11, 2015
On January 23, 2015, Wasseem Shamoun was sentenced to 15 months in prison for his role in defrauding banks as part of a straw-buyer scheme. The indictment alleged the scheme took place from approximately January 2006 through December 2008, so this prosecution falls within the DOJ’s emphasis on going after people it believes had some hand in the collective mayhem leading to the financial crisis. As stated in the press release:
According to court documents, the defendants devised a scheme to purchase single-family homes for approximately $5,000 to $40,000 each, and then recruited straw buyers to submit fraudulent loan applications for home mortgages substantially above the original purchase price. The loan applications falsified the straw buyers’ assets, income and down payment, among other things. The straw buyers were paid fees for their participation, which were sometimes falsely disguised as “landscaping” or “construction” fees. The conspirators made a substantial profit and paid themselves commissions on the sales. Every home purchased and sold as part of the scheme went into foreclosure. According to court documents, Shamoun’s role in the conspiracy was to sell properties to the straw buyers. He was directly responsible for a criminal loss of approximately $394,000.
This type of scheme was very common in Southern California as well. Because they relied heavily on the lower loan qualification and proof requirements the lenders had pre-2009, these scams are likely a lot less of a problem now.
The full press release, for those who want to read it, can be found by clicking here.