OAKLAND – An Indictment by a federal grand jury, unsealed here today, charges Ayman Shahid with conspiracy to commit bank fraud and seventeen individual counts of bank fraud, announced United States Attorney Melinda Haag, FBI Special Agent in Charge David J. Johnson, and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.
According to the indictment, Shahid, 38, of Danville, Calif., is alleged to have masterminded a scheme to cause banks to approve mortgage loans for unqualified buyers at the height of the financial crisis. Shahid managed Discovery Sales, Inc., which was the sales arm of affiliated residential construction companies, including Discovery Home Builders and Albert D. Seeno Construction Co. According to the indictment, Shahid devised and managed a scheme to provide undisclosed incentives to unqualified home buyers, which allowed Discovery to continue selling houses during the financial crisis. Shahid intentionally hid the scheme from appraisers and bank underwriters so that loans to unqualified buyers would be approved. According to the Indictment, the aggregate sales price of the homes affected by the scheme was almost $230 million and loans having a value of $150 million went into foreclosure or short sale proceedings.
Shahid was arrested in Concord, Calif., this morning at approximately 8:45 a.m. and his initial appearance is scheduled for today at 11:30 a.m. in federal court before the Honorable Donna M. Ryu, United States Magistrate Court Judge in Oakland.
An Indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant could face a maximum sentence of 30 years in prison, and a fine of $1,000,000, plus restitution if appropriate, for each of the eighteen violations of 18 U.S.C. § 1344 alleged in the indictment. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being prosecuted by Assistant United States Attorneys John Hemann and Randy Luskey and was investigated by the FBI, IRS – Criminal Investigative Division, and Federal Housing Finance Agency, Office of Inspector General.
(Shahid indictment )