An Aliso Viejo man has been indicted in connection with a multimillion-dollar “builder bailout” scheme targeting large condominium projects around the nation.
Indicted by a federal grand jury on Friday, Aref Abaji, 31, faces 50 years in prison if convicted for the conspiracy. Abaji pleaded not guilty to the charges in federal court on Wednesday.
Abaji is one of six defendants names in the indictment. Prosecutors accuse the six of conspiring to bail out the builders of struggling condominium projects by recruiting “straw buyers” to purchase the units with fraudulently obtained mortgage loans. They subsequently defaulted on the loans leaving the banks, Freddie Mac and Fannie Mae on the hook for nearly $10 million, according to the Department of Justice.
“The scheme, which was operated out of Excel Investments and related companies that were based in Irvine and then Santa Ana, allegedly identified new condominium developments in which the builder-owners were struggling to sell units, and arranged with the builders to sell the units in return for large commissions,” the Department of Justice claimed in a written release. “The builders benefited by making it appear that their condos were selling and maintaining their value, while those involved with the fraudulent sale of the units financially benefited from the hefty commissions that were concealed from the mortgage lenders. The defendants recruited a number of straw buyers to purchase the properties as “investors,” and ensured that they qualified for financing by fabricating important aspects of their loan applications.”
Also arrested were
- Mohamed Salah, 37, of Mission Viejo;
- Maher Obagi, 26, of Huntington Beach, the brother of Aref Abaji;
- Jacqueline Burchell, 52, of Orange, an escrow agent;
- Mohamed El Tahir, 35, of Glen Burnie, Maryland.
Each has already pleaded not guilty to the charges. A sixth defendant named in the indictment – mortgage loan officer Wajieh Tbakhi, 48, of Corona – is being sought by federal authorities.
In each of the transactions – the indictment alleges there were more than 100 of them – the defendants earned commissions of $50,000 to $100,000, and sometimes more, according to the justice department. The defendants bought units for themselves, their relatives, and on behalf of “investors” with good credit scores who served as “straw buyers,” the indictment alleges. They allegedly recruited the straw buyers by presenting the scheme as an investment opportunity, which required no down payment and would generate income through rental payments.