Mortgage Fraud

San Francisco Man Sentenced to 21 Months for Role in Mortgage Fraud Scheme


March 22, 2010 - SAN FRANCISCO—Michael Chou was sentenced today to 21 months in prison and ordered to pay $360,800 in forfeiture as a result of his conviction for conspiring to commit wire fraud, United States Attorney Joseph P. Russoniello announced.

Mr. Chou pleaded guilty to the wire fraud conspiracy charge on October 30, 2009. In pleading guilty, Chou admitted that from in or before 2003 until approximately April 2009, he participated in a scheme to defraud mortgage lenders and financial institutions by providing false and fraudulent information in support of mortgage loan applications. Working for San Francisco, Calif., based company known as “United Investments,” Chou and his co-conspirators assisted individuals who wanted to obtain mortgages from mortgage lenders so they could purchase residential properties in the Northern District of California and elsewhere. As a part of this scheme, Chou routinely transmitted fraudulent loan applications to mortgage lenders that contained false employment information and false and inflated income and bank account information. The information was intended to inflate the borrowers’ creditworthiness. In addition, the loan applications were supported by false and forged documents that purported to verify the borrowers’ employment, income, and assets. Chou and other members of the scheme used a network of co-conspirators who agreed to pose as the borrowers’ employers and to falsely verify to the mortgage lenders the accuracy of the employment and income information listed on the loan applications. As a result of Chou’s participation in this conspiracy, he illegally earned at least $360,800.

The sentence was handed down by U.S. District Court Judge Susan Illston. Judge Illston also sentenced the defendant to a five-year period of supervised release. The defendant will begin serving the sentence on July 30, 2010.

Twelve other defendants have been charged in connection with the mortgage fraud scheme related to United Investments. Jeffrey Rabkin and Jeffrey Finigan are the Assistant U.S. Attorneys who are prosecuting these cases with the assistance of Elizabeth Garcia and Rayneisha Booth. The prosecutions are the result of an investigation by the Federal Bureau of Investigation