SAN DIEGO–A 32 year-old Rancho Cucamonga real estate investor admitted Tuesday that he orchestrated a scheme to steal title to Southern California homes and then sell the properties to unsuspecting buyers before the true owners could put a stop to the sale.
Mazen Alzoubi admitted that from May 2012 through August 2014, he and several co-conspirators fraudulently sold or attempted to sell at least 15 homes worth more than $3.6 million. On at least ten occasions, Alzoubi admitted, he was successful—earning illicit proceeds of nearly $2.2 million, which he then laundered and diverted to overseas bank accounts to ensure that the fraudulently-obtained proceeds could never be recovered.
Alzoubi and his co-conspirators, including Daniel Deaibes and Mohamed Daoud, would generate forged trust deeds, making it appear that the true owner had sold the home to a business Alzoubi controlled, when, in reality, the true owners were entirely unaware of Alzoubi’s actions. They would then record the fraudulent grant deeds at county recorder’s offices, so the deeds appeared legitimate. Once the fraudulent documents were recorded in the chain of title, Alzoubi would pose as the owner and immediately try to sell the properties. Alzoubi used a web of aliases (including “John Moran,” “Enrique Lopez,” “Dan Cox,” and “Zubu Wawa”) and a host of sham businesses (with names like “Land Investments 01”) to pose as the owner of properties he listed for sale. Alzoubi and his co-conspirators set up bank accounts for the sham companies, so that the proceeds could be diverted directly to them. In this way, Alzoubi collected all the sale proceeds, and the true owners were left with nothing.
In some cases, the real owners discovered the fraud, and made efforts to re-gain control of their property. In one instance, true owner Fannie Mae discovered that a fraudulent grant deed had been recorded relating to property it owned in Rowland Heights, California. Shortly after discovering the fraudulent deed, Fannie Mae filed a lawsuit to recover control over the property and recorded a lis pendens, notifying prospective buyers that Fannie Mae was challenging the fraudulent deed. Undeterred, Alzoubi and his co‑schemers created a fake “Withdrawal of Lis Pendens” in an effort to proceed with their fraudulent sale. When Fannie Mae won a judgment in its favor and obtained a court finding that the deed was fraudulent, Alzoubi and his co-schemers created a fake “Satisfaction of Judgment” and recorded that fraudulent document as well.
Alzoubi and his co-conspirators assumed the identities of others in order to keep the scheme going, and used the forged signatures and notary stamps of notaries to make fake documents look legitimate, and of lawyers to prepare and file fraudulent court documents. As a result, Alzoubi was charged with, and pleaded guilty to, aggravated identity theft, which carries a mandatory sentence of two years in prison in addition to his sentence for the fraud and money laundering.
Alzoubi’s co-conspirator Daniel Deaibes pleaded guilty in March 2015. As part of his plea, Deaibes admitted that he participated in the scheme according to Alzoubi’s directions. He used the alias “John Moran” to pose as the seller’s representative in several of the fraudulent sales. Deaibes went so far as to introduce himself as “Moran” and present a fake driver’s license to two notaries public in 2014. He admitted that he signed fraudulent documents using this alias in an effort to sell or encumber properties that belonged to unsuspecting owners.
Mohamed Daoud also pleaded guilty, in July 2015, admitting that he helped Alzoubi launder the proceeds of the scheme. Alzoubi used Daoud’s company, “Norway LLC,” to pretend to acquire title to some of the properties, by forging fake deeds and then recording the forgeries at county recorder’s offices. Daoud admitted that during his participation in the money laundering conspiracy, Alzoubi induced at least six different buyers to purchase properties he did not own, leaving them with worthless claims to title and generating at least $1.4 million in proceeds from the fraud. Daoud received approximately $270,000 of the proceeds.
Alzoubi, and his co-conspirators generated nearly $2.2 million in profits from the scheme. In each case, the unwitting third party buyer paid for homes Alzoubi and his co-schemers pretended to lawfully own. Most of these properties were post-foreclosure properties owned by banks or institutions such as Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac are government-sponsored enterprises with a mission to provide liquidity, stability, and affordability to the United States housing and mortgage markets. As part of this mission, Fannie Mae and Freddie Mac purchase residential mortgages in the secondary market, enabling lenders to replenish their funds to finance additional single family loans. Fannie Mae and Freddie Mac can become the property owners if they own the mortgage loan at the time a home is foreclosed.
“We are committed to protecting the recovering housing market and the public’s confidence in the security of their most important investment, their homes,” said U.S. Attorney Laura Duffy. “Prosecuting people who continue to prey on and profit from the devastating mortgage meltdown is a top priority because they play such a significant role in our nation’s financial turmoil, and because the economic damage to taxpayers is immense.”
Federal Housing Finance Agency – Office of Inspector General Special Agent in Charge Leslie DeMarco said, “We will not let individuals such as Mazen Alzoubi chip away at the housing market nor the taxpayers who ultimately bear the burden of such ludicrous schemes. The actions of Alzoubi and his co-conspirators were brazen and we are committed to finding justice for all who were harmed.”
“Sophisticated financial fraud schemes cost American taxpayers millions of dollars each year,” commented FBI Special Agent in Charge, Eric S. Birnbaum. “The FBI is resolute in using our intelligence and investigative expertise to mitigate complex financial fraud schemes that threaten our financial system.”
Alzoubi’s guilty plea was taken before U.S. Magistrate Judge Jan Adler. Alzoubi is scheduled to be sentenced by U.S. District Judge Cynthia Bashant on March 21. Daoud’s sentencing is scheduled for the same date and time, and Deaibes’s sentencing is slated for May 23 both also before Judge Bashant.