Three Indian-origin persons sentenced for USD 9.3mn mortgage fraud scheme

Three Indian-origin persons, including a woman, in California have been sentenced for crimes relating to their involvement in a USD 9.3 million mortgage fraud scheme.

Surjit Singh, 72 was sentenced to 11 years and three months in prison, his son, Rajeshwar Singh, 44 was sentenced to 11 years and three months in prison on counts of mail fraud, bank fraud and false statements on loan and credit applications.

Surjit is in custody. Rajeshwar and Anita Sharma are scheduled to self-surrender on January 9, 2019.

According to court documents and evidence produced at trial, the defendants were responsible for the origination of more than USD 9.3 million in fraudulently procured residential mortgage loans.

Sharma, 56 was sentenced to three years and 10 months in prison on counts of mail fraud, bank fraud and false statements on loan and credit applications.

Surjit was ordered to pay a USD 2 million fine and another USD 1.5 million in restitution and forfeiture. Rajeshwar was ordered to pay a USD 1 million fine and about USD 1.7 million dollars in restitution and forfeiture. Sharma was ordered to pay USD 633,180 in restitution and forfeiture.

According to court documents, in 2006 and 2007, Surjit recruited individuals with good credit to act as straw buyers for residential properties owned by his family members and associates. Rajeshwar, a licensed real estate agent, assisted in the scheme by submitting loan applications for the straw buyers.

Sharma, a dental assistant at the time, was one of the straw buyers. Because Sharma and the other straw buyers could not afford the homes based on their true incomes, the Singhs submitted fraudulent loan applications and supporting material to lending institutions that included false statements about the straw buyers' income, employment, liabilities, and intent to occupy the homes as their primary residences.

At least 14 properties were involved in the scheme. Sharma alone purchased five homes in San Jose, San Ramon, Elk Grove, Sacramento, and Modesto in California. Other straw buyers purchased or refinanced properties in other parts of California. All of these homes were ultimately either foreclosed upon or sold in a short sale where the bank lets homeowners sell their homes for less than is owed on the mortgage.

Sharma was paid for her involvement in the scheme. Rajeshwar received financial benefits through broker commissions for the transactions and as the seller of seven of the properties.

Surjit benefitted through payments out of escrow directed to shell companies. In addition, many of his family members received money by selling properties and had money directed to them out of escrow.