A Northville, Michigan, resident was sentenced today in U.S. District Court for the Eastern District of Michigan to serve 15 months in prison, five years of supervised released and was ordered to pay $394,000 in restitution to five defrauded banks for committing bank fraud, the Department of Justice announced.
Wasseem Shamoun pleaded guilty on Aug. 12, 2014, to conspiracy to commit bank fraud. The superseding indictment alleged that from approximately January 2006 to December 2008, Shamoun and his six other co-defendants conspired to defraud financial lending institutions to obtain residential mortgage loans by providing fraudulent information on loan applications. 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.
In addition to the seven individuals indicted in the case, two others connected to the scheme have pleaded guilty. One individual is a straw buyer of multiple properties who received substantial fees as part of the scheme. The other individual is a mortgage broker who assisted in the preparation of the false mortgage loan applications. Both are awaiting sentencing in their cases.
This case was investigated by the FBI, IRS-Criminal Investigation and the Drug Enforcement Administration. Senior Litigation Counsel Corey Smith and Trial Attorney Mark S. McDonald of the Justice Department’s Tax Division prosecuted the case.
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