New York-based Guyanese businessman Edul Ahmad was today sentenced to two years in jail for attempting and conspiracy to commit mail fraud.
The judgment handed down by Justice Dora Irizarry also came with a series of other stipulations.
Ahmad will have 5 years of supervised release with special conditions.
He must also comply with an earlier forfeiture order; comply with an earlier restitution order and make a full financial disclosure. Employment is prohibited in the mortgage industry. He may not possess a firearm, ammunition or any destructive device and must maintain lawful and verifiable employment.
Restitution to the tune of US$2,607,854.10 must be made –jointly and severally with Glen Hirsch and Radhika Dhori.
No fine was imposed due to priority of the restitution. The court’s recommendation to the Bureau of Prisons was that he be incarcerated at a facility in or near New York City.
Ahmad will be permitted to self-surrender to the facility to be designated by the Bureau of Prisons on June 30, 2017 at 9:30 AM. He has also been advised of appellate rights.
Ahmad had entered a guilty plea in October, 2012 to mortgage fraud conspiracy in New York and at that point faced up to 10 years in jail and US$15m in fines and restitution. However, his co-operating testimony on behalf of the US government, in particular, his court testimony against former New York state senator John Sampson resulted in a much lower sentence.
Ahmad had ties to former President Bharrat Jagdeo and opened up a business at the Industrial Site estate where the PPP-aligned Mirror newspaper was previously printed.
Following his arrest on July 21, 2011 in New York on a range of charges, Ahmed entered a plea agreement with the government and on October 13, 2012 pleaded guilty to bank and wire fraud conspiracy before Judge Irizarry.
In its sentencing letter tendered to the judge on March 30, 2017, the US that the jury ultimately credited the government’s evidence in finding Sampson guilty on three charges and the same Judge Irizarry sentenced Sampson to five years of incarceration for each charge to run concurrently.
“…the defendant (Ahmad) provided substantial assistance to the government. For these reasons, the government respectfully moves pursuant to Section 5K1.1 of the United States Sentencing Guidelines to permit the Court, in its discretion, to sentence the defendant below the applicable Guidelines range”, the sentencing letter said.
Falsifying
The US sentencing letter provided detailed information on the mortgage fraud scheme which ensnared Ahmad.
It said that beginning in 2000, Ahmad and other co-conspirators defrauded various lending institutions by acquiring mortgages on properties in the Eastern District of New York and elsewhere through fraudulent means, including by falsifying mortgage loan applications. That bogus information made the borrowers appear to be more creditworthy. As a result, the financial institutions were fraudulently induced to issue mortgages secured by the properties. “In some instances, the co-conspirators recruited individuals (the “Straw Buyers”) to conceal the true ownership of the Properties. The Straw Buyers posed as the purchasers of Properties, which, in reality, were controlled by other co-conspirators. In other instances, the co-conspirators recruited prospective home purchasers with good credit scores but with income and assets that were insufficient to secure mortgage loans (the “Purchasers”) to purchase Properties. Though the Purchasers intended to purchase and take possession of the Properties, the co-conspirators arranged for some of the Purchasers to enter into mortgage loans that the Purchasers could not afford.
“Once Straw Buyers or Purchasers were recruited, the coconspirators prepared mortgage applications for the Properties that contained numerous misrepresentations and falsehoods designed to make the Straw Buyers or Purchasers appear to be more creditworthy. Among other things, the mortgage applications falsely inflated bank account balances and income for Straw Buyers and Purchasers. In addition, the mortgage applications for the Straw Buyers falsely stated that the Straw Buyers would live at the Properties”, the US sentencing letter related. As a condition for issuing the mortgages, the financial institutions required Straw Buyers and Purchasers to make down payments on the purchase of the properties, and limited the amount that the co-conspirators could receive as real estate commissions and fees. Notwith-standing the requirements, the Straw Buyers and Purchasers often did not make any down payments, and the co-conspirators kept commissions and fees in excess of those permitted by the financial institutions.
“To conceal these facts from the lenders, members of the conspiracy falsified Department of Housing and Urban Development (HUD) forms in order to deceive the lenders about disbursements at closings. For example, the Falsified HUD Forms represented that some of the Purchasers or Straw Buyers had made a down payment or other cash payment to the sellers when, in fact, none had been made. The Falsified HUD Forms also understated the co-conspirators’ true loan fees and real estate commissions, which, unbeknownst to the Lenders, exceeded the thresholds they permitted”, the US sentencing letter stated.
“The defendant was the leader of this extensive mortgage fraud scheme. At all relevant times, the defendant owned and operated a real estate business and a mortgage brokerage, through which businesses mortgage loans were disbursed on the basis of materially false information. In furtherance of the scheme, the defendant directed his employees to inflate the Purchasers’ income information on mortgage applications to increase the likelihood of approval by the Lenders. The defendant also directed his employees to falsify employment information regarding the Purchasers by listing local businesses as employers on the loan applications. The defendant paid local businesses to verify the Purchasers’ employment with the Lenders. Additionally, the defendant himself purchased Properties through the use of Straw Buyers, including his own wife, for investment purposes. Finally, the defendant charged mortgage commissions well in excess of rates allowed by the Lenders. He caused closing attorneys, who were coconspirators in the mortgage fraud scheme, to conceal the excessive commissions through Falsified HUD Forms that were submitted to the Lenders”, the US sentencing letter stated.
Ahmad participated in or caused numerous closings involving properties. The US sentencing letter cited 163 properties in 2006 and 2007 alone—many of which resulted in losses suffered by the lenders. The total loss amount to financial institutions is US$3,007,573.
“The defendant’s criminal activity had a particularly pernicious effect on families who lost their homes to foreclosure and the community at large which was blighted by foreclosed properties”, the sentencing letter stated..
The US sentencing letter attached a proposed restitution form for the defendant’s sentencing saying that he has joint and several liability for the US$3.007m lost by various financial institutions.
These are Countrywide Home Loans/Bank of America to the tune of US$1.043m, Freemont Investment for US$778,841, Option One Mortgage Corporation US$169,719, Wells Fargo Home Mortgage, US$253,020, Decision One Mortgage/HSBC Mortgage, US$112,360, Ocwen, US$190,290, Argent Mortgage/Citibank, US$230,000 and New Century/Deutsche Bank, US$230,000.
The US sentencing letter further pointed out that as part of the defendant’s cooperation agreement, he agreed to pay US$500,000 before the date of his sentencing. To date, the defendant has made a partial payment of US$29,662.18.
Sentencing of Ahmad was deferred 10 times. He was originally supposed to be sentenced on January 15th, 2016.
