In a report in today’s edition, the New York Times said that scores of Guyanese, if not more, face financial ruin because of loans brokered by real estate magnate Ed Ahmad who has been charged over a US$50M mortgage fraud.
The NYT said that for years Ahmad personified the collective aspirations of Richmond Hill, Queens, with many immigrants from Guyana.
“Mr. Ahmad drove a yellow Lamborghini, sponsored a cricket team and held white-glove parties at a lavish banquet hall that he owned.
“At a prominent intersection near the border of Richmond Hill and South Ozone Park, his smiling face looked down from a large billboard that promoted his real estate services. Many residents responded, taking out high-risk mortgages that they were told they could readily afford”, the NYT said.
It noted that in July, it all collapsed when agents from the Federal Bureau of Investigation arrested Ahmad and charging him with being the linchpin of a US$50 million mortgage fraud.
“Now, scores, if not hundreds, of Guyanese immigrants are facing financial ruin because of loans said to have been arranged by Mr. Ahmad, and the repercussions from the case have extended from Queens to Washington to Guyana”, the NYT said.
Noting that Ahmad is currently locked in intensive plea-bargain negotiations with federal prosecutors, the NYT said it appears that the impact of the loans will last for years. It reported that Richmond Hill has been hit harder by the mortgage crisis than most other neighbourhoods in the city. It sourced this information to officials and analysts.
Ahmad’s plight has also entangled two politicians whom he considered friends: United States Representative Gregory W. Meeks, a Queens Democrat, and John L. Sampson of Brooklyn, the Democratic leader of the State Senate.
A House ethics panel is probing Meeks for failing to disclose that he received US$40,000 from Ahmad and Sampson – who has Guyanese connections – worked as Ahmad’s attorney and was censured by the New York secretary of state for notarizing a document for Ahmad without a licencee.
Noting the repercussions in Georgetown, the NYT said that after Ahmad’s arrest, the PPP/C had to explain why his contact information appeared on a flier promoting a fund-raising dinner with the president at the time, Bharrat Jagdeo. The NYT noted the PPP/C’s explanation that Ahmad was a friend of Jagdeo’s, but not a campaign donor. The dispatch of a container of goods by Ahmad to Jagdeo had also raised questions in Georgetown.
Ahmad has been charged with luring buyers into subprime mortgages, inflating the values of their properties and hiding his involvement by employing straw buyers, like his wife. The NYT said that reached by telephone recently, Ahmad would not comment.
The report said that since 2009, more foreclosures have been filed in Queens than in any other borough, according to the Neighborhood Economic Development Advocacy Project.
“Five of the hardest hit ZIP codes in Queens are within a 15-minute drive of the office of Mr. Ahmad, who community leaders say once held about 75 percent of local real estate listings.
The report cited the case of Paban Saha and Syed Husain, friends and former business partners. They said they contacted him in 2006 after seeing his newspaper advertisements. They said he gained their confidence at their first meeting, when they watched him write a cheque to a charity.
Ahmad and one of his brokers, according to the report offered Husain and Saha a three-family house for US$880,000 but warned of another bid, Husain said. They related that Ahmad demanded that they close the deal within a week and insisted that they use his lawyer, his appraiser and his mortgage officer. The latter pushed to finance 95 percent of their home at a 12.5 percent rate.
“Within two years, their finances were devastated, they said. The property was on the brink of foreclosure, the souvenir store that their families owned together went bankrupt, and they depleted savings they had accumulated since emigrating from Bangladesh in the 1990s.”
Husain has since filed has filed a civil lawsuit against Ahmad.
The NYT said that some Guyanese relating their foreclosure arrangements with Ahmad’s services said they were so scared of his powerful ties that they did not want their names publicized.
The NYT said that a private portion of his Facebook profile, accessible by more than 250 of his friends on the Web site, states that Ahmad earned degrees from Baruch College in Manhattan. “However, the college has no record of him”, the NYT said.
The NYT said that Ahmad created a public brand and residents flocked to him.
It said that when Ahmad opened a new office, the police blocked traffic as about 300 people, including Representative Meeks and Senator Sampson, attended a ceremony and listened to a calypso singer offer a tribute: “Ed Ahmad! Ed Ahmad! That dynamite businessman. Ed Ahmad! Ed Ahmad! A sexy, handsome young man.”
As he gathered wealth — the NYT said that one former friend said he was worth at least US$20 million in liquid assets and poured money into charitable and other causes. He also raised money for politicians like Meeks and Sampson.
“Ed used to go around saying he’s befriended politicians, and if he’s ever caught, they’ll help him get off,” said Chuck Mohan, who is the president of a Guyanese civic group in Queens and a friend of Sampson’s.
The NYT said that in Queens, many people who once jockeyed for Ahmad’s attention, like radio and television talk show hosts, are keeping their distance. His defenders still question, however, why the government was prosecuting immigrant brokers even as it rescued banks.
“We are innocent victims of the economic frenzy and implosion that America is going through,” Kawal Totaram, a real estate lawyer and friend of Ahmad’s told the NYT.
Some housing advocates disagreed that Ahmad was in hot water because of forces outside his control. Mamta Gurung, a manager at Chhaya, a Queens-based housing organization that caters to South Asians, told the NYT that half of her foreclosure clients were Guyanese, including some who had loans from Ahmad.
She said most of her clients could not identify their mortgage documents and some could not even spell their names.