Federal grand jury indicts Modesto bail agent, 6 others in alleged mortgage fraud

Federal investigators on Friday arrested a Modesto bail agent and his girlfriend, who are among seven indicted in an alleged mortgage fraud scheme that resulted in a $3 million loss for lenders.

Praveen Singh, 36, and his girlfriend, Jyoteshna Karan, 43, were arrested Friday morning at their Modesto home. Singh, who has filed a civil rights lawsuit against local law enforcement officials, also faces local criminal charges for allegedly asking inmates to commit crimes for him.

A federal grand jury on Thursday returned with a 15-count indictment against the seven defendants, charging them with conspiracy to commit mail and bank fraud, aiding and abetting, and making false statements to a bank, according to the U.S. attorney’s office in Sacramento.

Federal prosecutors said the conspiracy involved at least 25 properties from Modesto to Sacramento. If convicted, each defendant faces a maximum sentence of 30 years in federal prison and a $1 million fine for each count. Assistant U.S. Attorneys Mark Cullers and Patrick Delahunty are prosecuting the case.

The others indicted were Mahendra Prasad, 53; Phul Singh, 79; Sunita Singh, 60; Nani Isaac, 69; and Martin Bahrami, 42. Prasad also was arrested Friday morning at his Fremont home. Phul and Sunita Singh, both of Modesto; Isaac of Ceres; and Bahrami of Turlock have each received a summons to appear in court, according to authorities.

The prosecutors say the defendants conspired to defraud lenders by making false statements on loan applications and short-sale applications to acquire properties under their names and others. Those alleged false statements included information about the defendants’ employment, their familial relationship, income and their intent to live in the home as their primary residence.

The case is the result of an investigation by the Stanislaus County District Attorney’s Office, along with the FBI, Federal Housing Finance Agency Office of the Inspector General and other federal agencies. District Attorney Birgit Fladager said in a news release that a partnership with federal authorities allows local prosecutors to investigate the most complex real estate fraud cases at the local level and prosecute them at the federal level.

Praveen Singh and Karan in late April filed a federal lawsuit against Fladager, Chief Deputy District Attorney Dave Harris, Stanislaus County Sheriff Adam Christianson, and investigators Kirk Bunch, Jon Evers and Frank Navarro. The civil case was scheduled for a status conference for the attorneys via a conference call. It’s unclear if Singh was expected to participate in the conference call.

Singh said he has been, since early 2013, the subject of an erroneous and malicious investigation into the murder of Korey Kauffman, according to the lawsuit filed by Singh’s Southern California-based attorney, Alex Herrera. The lawsuit alleges that investigators have abused their power, arresting Singh three times, and none of the charges are linked to the murder investigation.

An attorney representing the law enforcement officials argued that the lawsuit should be thrown out. Sacramento attorney John Whitefleet said the plaintiffs’ claims of a law enforcement conspiracy are vague, lack legal standing and are based on pending criminal cases against Singh, according to a filed motion to dismiss the lawsuit. The attorney argued that Singh is trying to sue people who are investigating and prosecuting him.

Herrera argued that investigators claim he still is a person of interest in the murder investigation while ruining Singh’s reputation, threatening his family and “deliberately and tortuously” interfering with his business and ability to provide for his family. The attorney said Singh’s family and close circle of friends have been investigated, harmed and bullied by the District Attorney’s Office and the investigators.

Kauffman, 26, of Turlock was found dead in Mariposa County. Robert Lee Woody, however, is the only person who has been charged with murder in Kauffman’s death. Local prosecutors have not announced they have charged anyone else, and they have not publicly identified three alleged co-conspirators.

Herrera argued that it appears an “all-out bully campaign” against Singh is politically motivated or simply another personal vendetta. Singh has no criminal record, his attorney said, and he has an extensive background in law enforcement education and professional investigative services.

Singh alleged that local investigators tried to pressure him into providing information that links prominent Modesto defense attorney Frank Carson to Kauffman’s death. Carson has emphatically denied any involvement in an alleged criminal conspiracy linked to Kauffman’s death.

During an unsuccessful run for district attorney against Fladager last year, Carson said he would like to speak more openly to dispel any rumors and prove he is not involved but is bound by attorney-client privilege not to discuss any details he might have learned while representing defendants in criminal cases. Carson in January 2012 represented Woody in an unrelated case.

Kauffman went missing in late March 2012. His body was discovered by hunters in an isolated area of Mariposa County in August 2013.

Singh’s local criminal case is scheduled to return to Stanislaus Superior Court on Aug. 5 for a law and motion hearing. Singh, then an agent for Singh’s Bail Bonds, was arrested in late November 2013 on suspicion of asking gang members to carry out a drive-by shooting and a home-invasion robbery where marijuana was being grown.

Singh maintains his innocence. He has told The Modesto Bee that many of his clients are gang members because that is the nature of the bail industry, but that he is not involved in illegal activity with any of them.

He also faces charges in two other pending criminal cases, in which he is accused of violating state insurance regulations and committing welfare fraud. Those Stanislaus County cases were filed in October 2013 and February 2014.

This story was originally published June 26, 2015 at 3:03 PM with the headline "Federal grand jury indicts Modesto bail agent, 6 others in alleged mortgage fraud."