From 2012 to 2014, Saoud (Sam) Rihan – who will be serving 30 years in prison – and other co-conspirators worked on a shotgunning scheme that ripped nearly three and a half million dollars from local banks. In a shotgun scheme, multiple loan applications are sent into various banks with false information. These applications, seeking home equity lines of credit, are then either rejected or accepted by the banks, who unknowingly disperse funds to a fraudulent person or company.
Rihan and Simon Curanaj (65) – yet to be prosecuted – cooked up a scheme involving two individuals from New York who served as straw buyers: personas used to submit applications for loan amounts that are eventually transferred to a real estate business or fraudulent company. These straw buyers were allegedly promised ten thousand dollars each for their involvement in the scheme but never received payment.
As part of the large scheme in 2013, a single property in Bronx, New York was pledged as collateral for three separate home equity lines of credit – each approximately $750,000. After each bank had deposited more than $370,000 into the straw buyers’ accounts, the individuals transferred the money to Rihan and his associates, then defaulted on the loans in 2014.
Rihan is also responsible for a one million dollar fine to help compensate the banks for their losses throughout the scheme. Unfortunately, this case serves as a reminder that we need to trust those we enter into contracts with, either at work or when buying a home. Though it’s easiest for fraudulent acts to be profitable on more high-end properties, we should all be on high alert when buying property.