California Real Estate Fraud Report

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03
Jun

Good Cop – Bad Cop: Police Officer Accused of Committing Mortgage Fraud

While reading this story, ask yourself how the accused had enough time to both work full-time and commit fraud. More curious is how the FBI had the time to investigate this small ($) potatoes case while turning away cases from victims who have been defrauded out of much more money.

Elk Grove police officer Hidayatullah Ali Khalil, 29, was arrested and taken into custody by the FBI on May 28 for allegedly committing mortgage fraud – several times. He was later released on bond after making an appearance at the federal court in in Sacramento. Chief of Police Robert Lehner was quick to state that the accusations of mortgage fraud against Officer Khalil were unrelated to his job.

Khalil is accused of a common mortgage fraud scheme that many now-bankrupt investors practiced: buying more than one home at the same time, so that each lender does not know there is another loan application in process, and declaring each home as a primary residence.

Why? Interest rates are higher for non-owner-occupied homes because lenders believe a homeowner will fight harder to keep a home than an investor. In the early 2000s, when the market was hot, “investors” – nothing more than gamblers who attended investor “boot camps” to learn how to get rich using OPM – Other People’s Money (the bank’s money) – bought multiple homes by investing little or no cash, then rented them out. The unforeseen situation was that so many homes were being rented out that in certain regions of the country, notably Las Vegas, Phoenix, parts of Florida, to name a few, that literally the supply of renters was exhausted. When rents got too high from increasing home prices and there was no longer anyone to rent to, the investors lost their properties like a deck of cards that collapsed.

The accusations against Khalil involve more a matter of equity draining than trying to build a phony landlording business. Khalil’s crimes, according to the FBI, are that he made false statements in order to obtain loans and performed illegal transactions between 2005 and 2006. The false statements are that Khalil claimed to be earning more than $6,000 per month as the owner of a business called EZ Towing. Khalil additionally claimed that he had income from working as a security employee for a San Francisco jewelry business. All this while he was a full-time police offier.

Khalil refinanced both properties, taking cash out each time. Both properties went into foreclosure in 2008.

In the meantime, he is on administrative leave from the Elk Grove Police Department, pending a separate investigation, where Khalil and his wife, Muzdha, are suspected of committing mortgage fraud.

Read the Full Article in the Elk Grove Citizen.

© Copyright 2007-2017 Monique Bryher

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The information and notices contained on The California Real Estate Fraud Report are intended to summarize recent developments in real estate fraud, mortgage fraud, short sale fraud, REO fraud, appraisal fraud, loan modification scams, loan modification fraud and other real estate related crimes occurring in Los Angeles and California. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about real estate fraud, mortgage fraud and appraisal fraud matters or who believe they require legal counsel should seek the advice of an attorney.

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