Sacramento real estate agent Behrooz Badie has been convicted of of mail fraud in a mortgage fraud case.
A federal jury in Sacramento found Badie, 53, guilty of 13 counts of mail fraud following a six-day trial before U.S. District Judge Edward J. Garcia, according to a federal Department of Justice news release.
According to evidence presented at trial, Badie, with co-defendants Derek Davis and Dino Rosetti, participated in a scheme to defraud mortgage lenders from June 2005 to December 2006. Davis and Rosetti previously pleaded guilty in the case.
Badie was the buyer's real estate agent for the purchase of 16 residential properties by four straw buyers. Rosetti served as the mortgage broker for 15 of the purchasers and Davis orchestrated the scheme, officials said.
With Badie's assistance, Harriette Davis, Derek Davis' ex-wife, purchased six residential properties, and Kristina Harvey, Davis' girlfriend, purchased five. William Emmons, an elderly friend of Davis, purchased four of the properties, and Alan Bolton, to whom Davis owed money, purchased one.
Each of the purchase agreements drafted by Badie indicated the offer was being submitted by one of these buyers who intended to occupy the property as his or her primary residence. Badie, however, knew that Davis was purchasing the properties with plans to remodel and sell them. The individuals named on the purchase agreements, at least two of whom Badie never met, never planned to live in the residences, officials said.
Badie submitted the offers on behalf of the buyers so that 100 percent financing could be obtained for each purchase. In furtherance of that goal, Rosetti submitted loan applications that, in every case, substantially overstated the income and understated the liabilities of each buyer, according to the news release.
The purported prices on the purchase agreements that Badie drafted overstated the true price of each property. The prices included not only the amount to be paid to the respective seller of the property, but also a substantial cash-back payment that would be made from the seller to Calorneva Land Co. at the close of escrow ranging from $42,094 to $137,980. These payments were agreed to in an addenda Badie drafted, indicating the payments to Calorneva were for repairs or improvement to the properties. Although the purchase agreements were provided to the lenders and the appraiser for each transaction, the addenda were not, officials said.
Upon acceptance of the offers, Badie asked the listing agent to increase the publicly available Multiple Listing Service price for a particular property to the inflated purchase price in the agreement he drafted. This was done to make it appear that Badie was simply submitting full-price offers, rather than offers well over the asking price. Thus, neither the lender nor the appraiser was aware of the cash-back payments to Calorneva, or that the true market value of the properties was considerably less than that offered by Badie, according to the news release.
At the close of escrow, the difference between the inflated purchase price and the amounts the sellers were actually willing to accept for their properties was diverted to Calorneva. In all, officials said, Calorneva received more than $1.3 million in such payments. Badie received more than $260,000 in commissions.
The case resulted from an investigation by the Internal Revenue Service-Criminal Investigation, the Federal Bureau of Investigation and the California Department of Real Estate.
Badie is to be sentenced by Judge Garcia on Aug. 28.