Waterford Man Charged with Participating in Mortgage Fraud Scheme, Obstructing Justice

June 2, 2010 - David B. Fein, United States Attorney for the District of Connecticut, today announced that RAB NAWAZ, 47, of Harbor View Avenue, Waterford, has been charged by federal criminal complaint with conspiracy to commit wire fraud and with obstruction of justice. NAWAZ was arrested this morning at his residence. He subsequently appeared before Senior United States District Judge Ellen Bree Burns in New Haven and was released on a $100,000 bond secured by property.

According to statements made in court, NAWAZ is alleged to have conspired with Syed A. Babar and others in a mortgage fraud scheme involving real estate throughout Connecticut. As part of the scheme, it is alleged that NAWAZ purchased homes in New London and sold them to straw buyers at artificially inflated prices that, typically, were supported by fraudulent appraisals. Although the straw buyers would represent that they intended to occupy the homes as their primary residence, they had no intention of doing so, defaulted on the loans and allowed the homes to go into foreclosure. The co-conspirators are alleged to have profited from the proceeds of the fraudulently inflated loans.

According to statements previously made in court, it is alleged that members of the conspiracy conducted this scheme on more than 25 properties in New London, New Haven, and other locations in Connecticut. As a result, it is alleged that various lenders suffered a loss of at least $2.5 million.

Babar was indicted on related charges on April 27, 2010, and was arrested on May 14. On May 20, it is alleged that NAWAZ met with a co-conspirator in the case and advised him about certain evidence that the government had presented during Babar’s detention hearing. During their meeting, it is alleged that NAWAZ instructed the co-conspirator as to what he should and should not admit knowing to government investigators.

The charge of conspiracy to commit wire fraud carries a maximum term of imprisonment of 20 years and the charge of obstruction of justice carries a maximum term of imprisonment of 10 years.

U.S. Attorney Fein stressed that a criminal complaint is only a charge and is not evidence of guilt. The defendant is entitled to have this matter presented to a grand jury and, in the event an indictment is returned, he is entitled to a trial at which it will be the government’s burden to prove guilt beyond a reasonable doubt.

U.S. Attorney Fein stated that the investigation is ongoing.

This case is being investigated by the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development, Office of Inspector General. The case is being prosecuted by Assistant United States Attorney Eric J. Glover.

In July 2009, the U.S. Attorney’s Office and the Federal Bureau of Investigation announced the formation of the Connecticut Mortgage Fraud Task Force to investigate and prosecute mortgage fraud cases and related financial crimes occurring in Connecticut. In addition to investigating past mortgage fraud schemes, the Task Force will focus on emerging crime trends that are associated with the growing tide of foreclosures, including foreclosure rescue schemes and short sale schemes. Citizens are encouraged to report any suspected mortgage fraud activity by calling 203-333-3512 and requesting the Connecticut Mortgage Fraud Task Force, or by sending an e-mail to ctmortgagefraud@ic.fbi.gov.

The Connecticut Mortgage Fraud Task Force includes representatives from the U.S. Attorney’s Office; Federal Bureau of Investigation; Internal Revenue Service – Criminal Investigation; U.S. Postal Inspection Service; U.S. Department of Housing and Urban Development, Office of Inspector General; Federal Deposit Insurance Corporation, Office of Inspector General, and State of Connecticut Department of Banking.