Connecticut man admits role in $7m mortgage scam

by Ryan Smith18 Mar 2014
A Connecticut man has admitted his role in a mortgage fraud conspiracy that cost lenders more than $7 million.

Mohammed N. Islam, 38, pleaded guilty to conspiracy to commit wire fraud and bank fraud. According to prosecutors, between 2006 and 2013, Islam participated in a scam that involved the purchase of various single- and multifamily properties, mostly in Bridgeport and Stamford, Conn. He and his co-conspirators recruited straw buyers for homes, obtaining mortgages by submitting fraudulent loan applications that included false income and down-payment verifications and phony Department of Housing and Urban Development forms.

Islam admitted that the straw buyers he recruited had no financial stake in the properties, and that he was actually the intended owners and collected rents from the properties. Many of the properties involved in the scheme ended up in foreclosure or in short sale transactions, according to the FBI.

Islam faces up to 30 years in prison for his role in the scheme. He is scheduled to be sentenced in June.
 

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