Feds raid Merced auto dealership, arrest 4 men in bank fraud investigation
Federal agents descended upon a used auto dealer in Merced early Wednesday, making arrests and serving a search warrant linked to a bank fraud investigation.
A combined force of nearly a dozen FBI and Immigration and Custom Enforcement agents raided Auto Expo USA at 1590 W. 16th St. around 6 a.m., said FBI Special Agent Steven Dupre.
Agents arrested Abdel "Fred" Baset Jawad, Abdul "Manny" Muniem Mohamad Jawad, Najeh "Alex" Kamal Jawad and Armando Fathic Abdallah, also known as Armando Souza, according to a five-page federal indictment.
Most of the suspects were part owners of The Auto Store of Merced, a California corporation, according to the federal indictment, while Abdallah was an employee.
According to the indictment, the suspects operated a scheme to enable customers to obtain financing, even if they didn't qualify, by preparing false financial documents and forwarding them to Valley First Credit Union.
Federal investigators believe the suspects entered fictitious information on loan applications, including the names of employers for whom the customers didn't work. The men also inflated the earning amounts of customers, in addition to creating fictitious earnings statements to reflect payments of wages by businesses that never employed the customers, according to the federal indictment.
Once the loan application and supporting documents were completed, they were submitted to Valley First by either the suspects or the customers, the indictment said. "Based on the incorrect, fraudulent and fictitious information included on the documents, VFCU granted financing to approximately 60 customers that they would not otherwise have provided had the true facts been known," it said.
Investigators believe VFCU sustained a loss of about $540,000, because many customers didn't have the ability to meet the terms of the loans.
Lauren Horwood, spokeswoman for Sacramento-based U.S. Attorney McGregor W. Scott, said the suspects lived in Merced, Madera, Fresno and other areas.
The suspects are naturalized U.S. citizens, she said.
The agents also raided a business in Fresno on Wednesday, Horwood said.
Although the owners of Auto Expo USA were not available for comment, a man who identified himself as Mohamad Jawad, the son of one of the owners, stood by the building as federal investigators loaded boxes onto a rental truck.
Jawad said his family had no knowledge of why the investigators were at the business, saying they had done nothing wrong. Jawad also said the investigators wouldn't tell his family why they were there.
The suspects are scheduled to be arraigned in federal court today.
This story was originally published December 4, 2008 at 7:46 AM with the headline "Feds raid Merced auto dealership, arrest 4 men in bank fraud investigation."