A federal jury has convicted three people of participating in a mortgage fraud scheme involving 14 Northern California homes, including properties in Modesto, Patterson and Stockton.
Surjit Singh, 71, of Dublin, and his son, Rajeshwar Singh, 43, of Pleasanton, each were found guilty of four counts of mail fraud, four counts of bank fraud, and four counts of false statements on loan and credit applications, according to the U.S. Attorney's Office in Sacramento.
Anita Sharma, 55, of Gilroy, was found guilty of two counts of mail fraud, two counts of bank fraud, and two counts of making false statements on loan and credit applications.
The jury in Sacramento returned with the guilty verdicts on Wednesday after a seven-day trial. Prosecution evidence presented in the trial indicated the defendants fraudulently obtained more than $9.3 million in residential mortgage loans.
The prosecutors said Surjit Singh recruited people with good credit to act as "straw buyers" for residential properties owned by his relatives and associates. The straw buyers were the people who lied in their loan applications included about their income, employment, liabilities and intent to live in the homes as their primary residences.
Rajeshwar Singh, a licensed real estate agent, submitted loan applications for the straw buyers, according to prosecutors. Anita Sharma, a dental assistant at the time, was one of the straw buyers.
Prosecutors said Sharma and the other straw buyers could not afford the homes based on their real incomes, so the Singhs submitted fraudulent loan applications and other documents to lending institutions. The applications included false statements about the straw buyers’ income, employment, liabilities and intent to live in the homes as their primary residences.
Sharma purchased five homes in Modesto, San Jose, San Ramon, Elk Grove and Sacramento. Prosecutors said the other straw buyers purchased or refinanced properties in Modesto, Stockton, Patterson, Lathrop and Tracy.
The homes were either foreclosed upon or sold in a short sale in which the bank let the homeowner sell the property for less than what was owed on the mortgage.
Prosecutors said Sharma was paid for her involvement in the scheme. Rajeshwar Singh received financial benefits through broker commissions for the transactions and as the seller of seven of the properties. He also continued to live in the San Ramon home, when Sharma should have been living there.
Surjit Singh benefitted through payments out of escrow directed to shell companies associated with his daughter and from rent payments from people actually living in the homes, according to prosecutors. These payments were purportedly for contracting services, which did not occur.
The defendants are scheduled to be sentenced on Jan. 26. Prosecutors said they each face a maximum sentence of 30 years in federal prison and a $1 million fine.