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New Haven Man Sentenced to Five Years in Federal Prison for Role in Mortgage Fraud Scheme

U.S. Attorney’s Office September 26, 2011
  • District of Connecticut (203) 821-3700
David B. Fein, United States Attorney for the District of Connecticut, announced that MORRIS OLMER, 83, of New Haven, was sentenced today by Chief United States District Judge Alvin W. Thompson in New Haven to 60 months of imprisonment, followed by three years of supervised release, for his involvement in an extensive mortgage fraud conspiracy that defrauded lenders of more than $4.4 million.

On April 12, 2011, a jury found OLMER guilty of one count of conspiracy to defraud the United States, eight counts of wire fraud and four counts of making false statements.

According to court documents, statements made in court, and the evidence disclosed during the trial, between approximately August 2006 and May 2010, Syed Babar of New London led a mortgage fraud scheme during which participants obtained approximately $10 million in residential real estate loans, including loans insured by the FHA, through the use of sham sales contracts, false loan applications, and fraudulent property appraisals.

As part of the scheme, Babar arranged for straw buyers to purchase houses they did not intend to occupy at fraudulently inflated prices and to apply for loans in the amount of the fraudulently inflated prices. The loans were supported by fraudulent appraisals and a variety of fraudulent information about the buyer, including information about his or her occupation, income, assets, liabilities, and intention to occupy the house as a primary residence. Babar and his co-conspirators also created a fictitious construction company called “Sheda Telle Construction, LLC”—which trial testimony revealed means “ring the bell and run” in Babar’s native language—in order to divert fraud proceeds to it and, in some cases, to falsely justify the artificially inflated sales price of houses based on renovations purportedly made to the property that, in fact, did not occur. Babar and his co-conspirators then split the fraud proceeds generated from the scheme.

The scheme involved approximately 29 properties in New London, New Haven and other locations in Connecticut.

OLMER, a former attorney, was paid by Babar to conduct the closings for many of the fraudulent real estate transactions at OLMER’s New Haven office, which resulted in more than $1 million in fraudulent proceeds being sent by wire and check to Sheda Telle Construction, LLC. Prior to his participation in this conspiracy, OLMER had surrendered his law license because of his involvement in other fraudulent transactions. However, OLMER continued to maintain his law office in New Haven, which he shared with other practicing attorneys.

The investigation revealed that OLMER was involved in the execution or attempted execution of 17 fraudulent property transactions. In October 2009, after OLMER conducted a fraudulent closing on one of the properties, 211 Lloyd Street in New Haven, he failed to provide the keys to the straw purchaser of the property. Instead, OLMER rented out the property and instructed his tenant to send the rent payments to his New Haven office.

During the trial, the government called 20 witnesses, played numerous recorded conversations and presented hundreds of exhibits. Three other defendants, Rab Nawaz, of Waterford; Marshall Asmar, of Milford; and Wendy Werner, of Sarasota, Fla., also were convicted of various charges following the trial. And, on March 21, at the conclusion of the fourth day of trial, Thomas Gallagher pleaded guilty to one count of making a false statement to the government in connection with an FHA-insured loan. Gallagher, who operated Autumn Appraisals, LLC, in West Haven, created fraudulently inflated appraisals of residential real estate in exchange for payments.

On June 8, 2011, Gallagher was sentenced to 60 months of imprisonment. Last week, Nawaz, Asmar, and Werner were sentenced to 90 months, 52 months, and 48 months of imprisonment, respectively.

On February 1, 2011, Babar pleaded guilty to multiple federal charges related to his leadership of this extensive mortgage fraud scheme. He and seven other individuals who also have pleaded guilty to various charges stemming from their involvement in this scheme await sentencing.

This matter was investigated by the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development - Office of Inspector General. The case is being prosecuted by Assistant United States Attorneys Eric J. Glover and Susan Wines and Special Assistant United States Attorney Liam Brennan.

In July 2009, the U.S. Attorney’s Office and the Federal Bureau of Investigation announced the formation of the Connecticut Mortgage Fraud Task Force to investigate and prosecute mortgage fraud cases and related financial crimes occurring in Connecticut. Citizens are encouraged to report any suspected mortgage fraud activity by calling 203-333-3512 and requesting the Connecticut Mortgage Fraud Task Force, or by sending an e-mail to ctmortgagefraud@ic.fbi.gov.

The Connecticut Mortgage Fraud Task Force includes representatives from the U.S. Attorney’s Office; Federal Bureau of Investigation; Internal Revenue Service - Criminal Investigation; U.S. Postal Inspection Service; U.S. Department of Housing and Urban Development, Office of Inspector General; Federal Deposit Insurance Corporation, Office of Inspector General; and State of Connecticut Department of Banking.

This case was brought in coordination with the President’s Financial Fraud Enforcement Task Force, which was established to wage an aggressive and coordinated 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.

To report financial fraud crimes, and to learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.

Courtesy FBI

David Saks

Time&Temp Memphis

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Comment balloon 0 commentsDavid Saks • September 26 2011 04:59PM


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