Date: 01-05-2016

Case Style:

United States of America v. Mazen Alzoubi

Case Number: 14-cr-3325-BAS

Judge: Jan M. Alder

Court: United States District Court for the Southern District of California (San Diego County)

Plaintiff's Attorney: Emily Allen and Andrew J. Galvin

Defendant's Attorney: Shashi Kewalramani and Carlos Ruan

Description: San Diego, CA - Mastermind of Multi-Million Dollar Real Estate Fraud Pleads Guilty

Mazen Alzoubi, a real estate investor, admitted today that he orchestrated a scheme to steal title to Southern California homes and then sell the properties to unsuspecting buyers before the true owners could put a stop to the sale.

Alzoubi admitted that from May 2012 through August 2014, he and several co-conspirators fraudulently sold or attempted to sell at least 15 homes worth more than $3.6 million. On at least ten occasions, Alzoubi admitted, he was successful—earning illicit proceeds of nearly $2.2 million, which he then laundered and diverted to overseas bank accounts to ensure that the fraudulently-obtained proceeds could never be recovered.

Alzoubi and his co-conspirators, including Daniel Deaibes and Mohamed Daoud, would generate forged trust deeds, making it appear that the true owner had sold the home to a business Alzoubi controlled, when, in reality, the true owners were entirely unaware of Alzoubi’s actions. They would then record the fraudulent grant deeds at county recorder’s offices, so the deeds appeared legitimate. Once the fraudulent documents were recorded in the chain of title, Alzoubi would pose as the owner and immediately try to sell the properties. Alzoubi used a web of aliases (including “John Moran,” “Enrique Lopez,” “Dan Cox,” and “Zubu Wawa”) and a host of sham businesses (with names like “Land Investments 01”) to pose as the owner of properties he listed for sale. Alzoubi and his co-conspirators set up bank accounts for the sham companies, so that the proceeds could be diverted directly to them. In this way, Alzoubi collected all the sale proceeds, and the true owners were left with nothing.

In some cases, the real owners discovered the fraud, and made efforts to re-gain control of their property. In one instance, true owner Fannie Mae discovered that a fraudulent grant deed had been recorded relating to property it owned in Rowland Heights, California. Shortly after discovering the fraudulent deed, Fannie Mae filed a lawsuit to recover control over the property and recorded a lis pendens, notifying prospective buyers that Fannie Mae was challenging the fraudulent deed. Undeterred, Alzoubi and his co‑schemers created a fake “Withdrawal of Lis Pendens” in an effort to proceed with their fraudulent sale. When Fannie Mae won a judgment in its favor and obtained a court finding that the deed was fraudulent, Alzoubi and his co-schemers created a fake “Satisfaction of Judgment” and recorded that fraudulent document as well.

Alzoubi and his co-conspirators assumed the identities of others in order to keep the scheme going, and used the forged signatures and notary stamps of notaries to make fake documents look legitimate, and of lawyers to prepare and file fraudulent court documents. As a result, Alzoubi was charged with, and pleaded guilty to, aggravated identity theft, which carries a mandatory sentence of two years in prison in addition to his sentence for the fraud and money laundering.

Alzoubi’s co-conspirator Daniel Deaibes pleaded guilty in March 2015. As part of his plea, Deaibes admitted that he participated in the scheme according to Alzoubi’s directions. He used the alias “John Moran” to pose as the seller’s representative in several of the fraudulent sales. Deaibes went so far as to introduce himself as “Moran” and present a fake driver’s license to two notaries public in 2014. He admitted that he signed fraudulent documents using this alias in an effort to sell or encumber properties that belonged to unsuspecting owners.

Mohamed Daoud also pleaded guilty, in July 2015, admitting that he helped Alzoubi launder the proceeds of the scheme. Alzoubi used Daoud’s company, “Norway LLC,” to pretend to acquire title to some of the properties, by forging fake deeds and then recording the forgeries at county recorder’s offices. Daoud admitted that during his participation in the money laundering conspiracy, Alzoubi induced at least six different buyers to purchase properties he did not own, leaving them with worthless claims to title and generating at least $1.4 million in proceeds from the fraud. Daoud received approximately $270,000 of the proceeds.

Alzoubi, and his co-conspirators generated nearly $2.2 million in profits from the scheme. In each case, the unwitting third party buyer paid for homes Alzoubi and his co-schemers pretended to lawfully own. Most of these properties were post-foreclosure properties owned by banks or institutions such as Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac are government-sponsored enterprises with a mission to provide liquidity, stability, and affordability to the United States housing and mortgage markets. As part of this mission, Fannie Mae and Freddie Mac purchase residential mortgages in the secondary market, enabling lenders to replenish their funds to finance additional single family loans. Fannie Mae and Freddie Mac can become the property owners if they own the mortgage loan at the time a home is foreclosed.

“We are committed to protecting the recovering housing market and the public’s confidence in the security of their most important investment, their homes,” said U.S. Attorney Laura Duffy. “Prosecuting people who continue to prey on and profit from the devastating mortgage meltdown is a top priority because they play such a significant role in our nation’s financial turmoil, and because the economic damage to taxpayers is immense.”

Federal Housing Finance Agency – Office of Inspector General Special Agent in Charge Leslie DeMarco said, “We will not let individuals such as Mazen Alzoubi chip away at the housing market nor the taxpayers who ultimately bear the burden of such ludicrous schemes. The actions of Alzoubi and his co-conspirators were brazen and we are committed to finding justice for all who were harmed.”

“As admitted in court today, Mr. Alzoubi and his co-conspirators sold fraudulently obtained homes to unsuspecting buyers for their own personal gain while attempting to hide the profits in offshore bank accounts,” said IRS Criminal Investigation’s Special Agent in Charge Erick Martinez. “Our agency is committed to unraveling complex identity theft and money laundering schemes where individuals attempt to conceal the true source of their illicit funds.”

“Sophisticated financial fraud schemes cost American taxpayers millions of dollars each year,” commented FBI Special Agent in Charge, Eric S. Birnbaum. “The FBI is resolute in using our intelligence and investigative expertise to mitigate complex financial fraud schemes that threaten our financial system.”

Alzoubi’s guilty plea was taken before U.S. Magistrate Judge Jan M. Adler. Alzoubi is scheduled to be sentenced by U.S. District Judge Cynthia Bashant on March 21, 2016 at 9 a.m. Daoud’s sentencing is scheduled for the same date and time, and Deaibes’s sentencing is slated for May 23, 2016 at 9:00 am, both also before Judge Bashant.

U.S. Attorney Duffy explained that the American public is the very real victim of this type of destructive fraud that is impeding the country’s ability to recover from the economic collapse of 2008. She emphasized that her office would aggressively prosecute such crimes and urged anyone in the community who has information relating to these charges to contact the San Diego branch of the Federal Bureau of Investigation at (858) 320-1800 or the Federal Housing Finance Agency—Office of Inspector General hotline at (800) 793-7724.

The swift resolution of this case was the result of coordinated investigations by the FBI, FHFA-OIG, and the Internal Revenue Service, Criminal Investigation Division.

DEFENDANT PLEADING GUILTY:

Mazen Alzoubi, 14CR3325-BAS Age: 32 Rancho Cucamonga, CA

CHARGES

COUNT ONE: Conspiracy to commit mail fraud and wire fraud, in violation of 18 U.S.C. § 1349.

Maximum Penalties: 20 years’ imprisonment, $250,000 fine or twice the pecuniary gain or loss resulting from the offense, $100 special assessment, restitution, and forfeiture.

COUNT TWO: Mail fraud, in violation of 18 U.S.C. § 1341.

Maximum Penalties: 20 years’ imprisonment, $250,000 fine or twice the pecuniary gain or loss resulting from the offense, $100 special assessment, restitution.

COUNTS THREE AND FOUR: Aggravated identity theft, in violation of 18 U.S.C. § 1028A.

Maximum Penalties: mandatory 2 years’ imprisonment, consecutive to any other term of imprisonment, $250,000 fine, $100 special assessment, restitution.

COUNT FIVE: Conspiracy to launder money, in violation of 18 U.S.C. § 1956(h).

Maximum Penalties: 20 years’ imprisonment, $500,000 fine or twice the value of the property involved in the transaction, $100 special assessment, restitution, and forfeiture.

DEFENDANTS PREVIOUSLY CHARGED:

Daniel Deaibes, 14CR3325-BAS Age: 37 Rancho Cucamonga, CA

Mail fraud, 18 U.S.C. § 1341

Mohamed Daoud, 14CR3326-BAS Age: 50 Norway

Conspiracy to launder money, 18 U.S.C. § 1956(h)

AGENCIES

Federal Housing Finance Agency—Office of Inspector General

Federal Bureau of Investigation

Internal Revenue Service, Criminal Investigation

Outcome: Guilty

Plaintiff's Experts:

Defendant's Experts:

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