News

Danville man charged in mortgage fraud scheme

Authorities allege $154 million scam aimed to shield companies from effects of economic downturn

A Danville home sales executive was arrested in Concord Monday morning on federal charges of engaging in a $154 million mortgage fraud scheme.

Ayman Shahid, 38, the president of Concord-based Discovery Sales Inc., is charged in a federal indictment with one count of conspiracy to commit bank fraud and 17 counts of committing bank fraud between 2006 and 2008.

The indictment was issued under seal by a federal grand jury in Oakland on Thursday and unsealed after Shahid's arrest Monday.

U.S. Attorney Melinda Haag said Shahid was arrested in Concord at 8:45 a.m. Monday and was scheduled to be brought before a federal magistrate in Oakland for an initial appearance later that day.

Discovery Sales is a sales arm of Discovery Home Builders and Albert D. Seeno Construction Co., according to the indictment.

The indictment alleges that at the height of the nation's mortgage and banking crisis in 2007, Shahid organized a scheme to cause banks to approve mortgage loans for unqualified buyers on the basis of false and misleading applications and for inflated home prices.

The total sales price of the properties was more than $227 million and the scheme caused mortgage loans worth more than $154 million to go into foreclosure or short sale proceedings, according to the indictment.

The purpose of the scheme was to shield Discovery Home Builders and Seeno Construction from the effects of the economic downtown and the decline in East Bay housing prices, the indictment said.

The builders' bank lines of credit were partly based on home sales prices and the decline in the real estate market raised the prospect that the credit lines would be decreased or eliminated, according to the indictment.

Shahid is accused of encouraging the sale of multiple homes to single buyers, including Discovery Sales employees and ones who falsely represented that they would personally own and occupy each house. The multiple sales were hidden from the banks and other lenders that provided the mortgages for the homes, the indictment said.

Shahid also allegedly gave the buyers incentive gifts and assistance with down payments and mortgage payments while knowing that the lenders would not have approved the mortgages if they had been aware of the aid, according to the indictment.

The charges carry a potential sentence of up to 30 years in prison if Shahid is convicted.

— Bay City News Service

Comments

 +   Like this comment
Posted by LMP
a resident of Danville
on May 21, 2014 at 6:44 am

Book him, Danno.


 +   Like this comment
Posted by Ms. bunny
a resident of San Ramon
on May 21, 2014 at 8:22 am

Seeno's reputation in this valley has been "shot" for 40 years with one specious activity right after another (costing many a homeowner big time in the low quality of their housing and oversight failure as well) This is, of NO surprise. I hope this man does "time" for misleading so many.


 +   Like this comment
Posted by concerned for fraud
a resident of San Ramon
on May 21, 2014 at 8:44 am

A person intervenes, and this is the consequences. The government intervenes, and citizens pay the bill. Not sticking up for this Ayman Shahid. I hope he gets the chair (although we don't have the guts for that). But then, why can't our government get the chair?


 +   Like this comment
Posted by John
a resident of Danville
on May 22, 2014 at 7:59 am

Seeno is an egregiously criminal enterprise. To date the law's attitude has been see no evil. Could this be the beginning of a change?


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