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Press Release

Developers Sentenced For Role In Failed $39 Million Commercial/Residential Real Estate Project In Austin

For Immediate Release
U.S. Attorney's Office, Northern District of Texas

DALLAS — Late yesterday, two developers who admitted conspiring to defraud U.S. Bank and Texas Capital Bank in connection with a $39 million construction loan for a commercial/residential development in Austin, Texas, were sentenced. U.S. District Judge Barbara M. G. Lynn sentenced Anirdh Sarwal, 39, to 57 months in federal prison and Fred Alden Yeo, 51, to 42 months in federal prison. In addition, Judge Lynn ordered that the two men pay $13,461,604 in restitution, jointly and severally with each other. Sarwal and Yeo, both residents of Austin, must surrender to the Bureau of Prisons by 2:00 p.m. on June 4, 2013. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Each defendant pleaded guilty to one count of conspiracy to commit bank fraud, admitting that they conspired with each other from August/September 2008 until at least June 2010. Sarwal, the principal of East Avenue Office Holdings, LP, based in Austin, and Yeo, co-guarantor on the loan, entered into negotiations with the two banks to obtain $39 million in funding for the development of an eight-story office building located at 3300 North Interstate Highway 35 in Austin.

To obtain the $39 million loan, they knowingly submitted a fabricated bank statement to the banks that purported to show that Sarwal had more than $7 million in an investment account at Wells Fargo Bank. They submitted this statement knowing that both financial institutions wanted assurance that Sarwal and Yeo, as co-guarantors, collectively had at least $5 million in liquid assets at their disposal. In reality, however, no such Wells Fargo account existed, and the bank statement was a forgery. Sarwal and Yeo admitted that they submitted the false bank statement with the specific intent to defraud the banks.

Based in part on that fraudulent bank statement, U.S. Bank and Texas Capital Bank approved the $39 million construction loan and closed on the loan on December 30, 2008. Between January 2009 and June 2010, when the banks foreclosed on the loan, Sarwal and Yeo made more than $33 million in draws on that construction loan.

Evidence at sentencing also established that the fraud was more encompassing than the false bank statement on behalf of Sarwal. Among other things, in order to secure the loan, Sarwal and Yeo also falsely represented to the financial institutions that 53% of the office space had been leased when, in fact, only 12% had actually been leased to legitimate tenants. The fraud continued throughout the project, with both Sarwal and Yeo submitting fake invoices to justify large draws from the construction loan and by taking steps to obtain fake cell phone numbers for the nonexistent tenants.

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. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit

The case was investigated by the United States Secret Service. Assistant U.S. Attorneys Nick Bunch and Steve Fahey were in charge of the prosecution.

Updated June 22, 2015