David Saks: November 2013

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Nine Indicted, Including Title Company Owners and Lawyers for Fraud

Nine Defendants, Including Title Company Owners and Lawyers, Indicted in Two Separate Mortgage Fraud Schemes

U.S. Attorney’s Office November 27, 2013
  • Northern District of Illinois (312) 353-5300

CHICAGO—A couple who owned a now-defunct suburban title company, a disbarred attorney, and an attorney are among nine defendants who have been indicted in two separate mortgage fraud cases, federal law enforcement officials announced today.

Seven defendants were charged together in one case, and two in the second case, together alleging schemes to fraudulently obtain at least four residential mortgage loans totaling more than $1 million from lenders.

Both indictments allege that the mortgages were obtained to finance the purchase of properties on Chicago’s South Side, using fraudulent means such as straw purchasers, short sales, inflated prices, and unqualified buyers, while the defendants allegedly profited. As a result, the lenders incurred losses because the mortgages were not fully recovered through subsequent sale or foreclosure.

Seven defendants were charged in an indictment that was unsealed on Monday following the arrest of HARVEY WRIGHT, 46, of Chicago, a disbarred South Holland attorney; and PRECIOUS HOUSE, 47, of Chicago. Also indicted, but not arrested, were DAVID GUEL, 60, and his wife, MARY GLEASON, 48, both of Blue Island; MUNTAZER ALI SAIYED, also known as “Monty Saiyed,” 37, of Bartlett; SAGED ANSARI, 32, of Hanover Park; and AZEEM SYED, 30, of Bolingbrook. All seven were charged with two counts of wire fraud and House, Syed, Saiyed, and Ansari were also charged with one count each of identity theft. The indictment seeks forfeiture of more than $800,000.

Guel and Gleason owned and operated the former U.S. Worldwide Title Services LLC, a title company located in Downers Grove.

All seven defendants pleaded not guilty yesterday or Monday in U.S. District Court and were released on bond. A status hearing was scheduled for January 13.

According to the indictment, between September 2008 and March 2009, the defendants caused two fraudulent mortgage loans to be issued by lenders for properties at 4823 South Racine Avenue and 6738 South Marshfield Avenue. The alleged fraud involved false representations in documents, including real estate contracts, loan applications, title commitments, and HUD-1 settlement statements concerning sales prices, the true disbursement of the loan proceeds at closing, the buyer’s assets, employment, and income.

The defendants allegedly used straw buyers who had no intention of residing in the property and making mortgage payments, as well as stolen identities of individuals who did not know that their identities were being used to purchase property. Guel, Gleason, Wright, and House allegedly conducted “double closings” at Worldwide Title in which a single property was sold twice through a short sale of the property from an owner to a buyer, who only temporarily took ownership before immediately re-selling to a second buyer at an inflated sales price using a fraudulently obtained mortgage to finance the purchase.

House allegedly facilitated the double closings by recruiting individuals to pose as the first and second buyers and arranging for them to use stolen identities provided by Syed, Saiyed, and Ansari, in connection with the transactions, the indictment alleges.

Guel, Gleason, and Wright allegedly prepared fraudulent documents stating that the properties had been transferred into a trust approximately a year before the double closing to conceal from the lender that the property was being sold twice, including on the same day. These three defendants and House allegedly obtained loan proceeds for their own personal benefit.

This case is part of Operation Mad House, an undercover investigation designed to combat mortgage and real estate fraud in the Chicago area with a focus on professionals in the real estate industry. Since 2009, more than 50 defendants have been convicted, including title company operators, mortgage brokers, licensed appraisers, and attorneys.

The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation; Barry McLaughlin, Special Agent in Charge of the U.S. Department of Housing and Urban Development Office of Inspector General in Chicago; and James C. Lee, Special Agent in Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.

The government is being represented by Assistant U.S. Attorneys Sunil Harjani and Kathryn Malizia.

In an unrelated case, GEORGE KOUVELIS, 39, of Bloomingdale, who bought and sold residential properties, and KARIM DURE, 39, of Chicago, an Evanston attorney, were each charged with two counts of wire fraud in an indictment that was unsealed on November 14 after Kouvelis was arrested. Kouvelis and Dure, who was not arrested, both pleaded not guilty and were released on bond. Their next court date is January 6. The indictment seeks forfeiture of $521,250.

According to the indictment, between November 2008 and March 2009, Kouvelis and Dure caused a buyer to obtain two fraudulent mortgage loans to purchase Kouvelis’ properties at 5804 South Princeton Avenue and 5563 South Shields Avenue. The defendants allegedly made false representations in documents, including real estate contracts, loan applications, and HUD-1 settlement statements concerning inflated sales prices, money paid to the buyer for purchasing the properties, the buyer’s assets, liabilities, and source of down payment.

The indictment alleges that Kouvelis fraudulently obtained mortgage loan proceeds through false closing documents, which concealed that the buyer was being paid to purchase the properties; concealed that the funds being used for down payments were provided by another individual; inflated purchase prices; and concealed that the buyer was contributing little or no equity to the transactions. Dure allegedly represented the buyer knowing that the loans were being funded based on false information about the buyer’s qualifications, including a will submitted by the buyer and a letter that Dure submitted to the lender verifying that the buyer had received $200,000 from his grandfather’s estate.

Mr. Fardon announced the Kouvelis/Dure charges with Mr. McLaughlin, Mr. Holley, and Tony Gómez, Inspector in Charge of the U.S. Postal Inspection Service in Chicago. The government is being represented by Assistant U.S. Attorney Jason Yonan.

Each count of wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, and restitution is mandatory. The identity theft count against defendants House, Syed, Saiyed, and Ansari carries a maximum of 15 years in prison and a $250,000 fine. If convicted, the court may impose an alternate fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater. The court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

The public is reminded that indictments contain only charges and are not evidence of guilt.

The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Since 2008, several hundred defendants have been charged in federal court in Chicago and Rockford with engaging in various mortgage fraud schemes involving more than 1,000 properties and more than $300 million in potential losses, signifying the high priority that federal law enforcement officials give mortgage fraud in an effort to deter others from engaging in crimes relating to residential and commercial real estate.

Today’s announcement is part of efforts underway by the Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has facilitated increased investigation and prosecution of financial crimes; enhanced coordination and cooperation among federal, state, and local authorities; addressed discrimination in the lending and financial markets; and conducted outreach to the public, victims, financial institutions, and other organizations.

Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

source: FBI



David Saks

Time&Temp Memphis

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