Thursday, April 1, 2010

Real Estate Investor Pleads Guilty in $6.2 Million Loan Fraud Scheme

DETROIT—Paul Bashi, 27, of Royal Oak, and formerly of Washington Township, Michigan, pleaded guilty before U.S. Chief District Judge Arthur J. Tarnow this afternoon to a federal information that charges him with conspiracy to commit wire fraud, United States Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Andrew G. Arena, Special Agent-In-Charge of the Federal Bureau of Investigation in Detroit and William Callahan, Special Agent-In-Charge of the United States Secret Service in Detroit.

During today's plea hearing Bashi admitted that, from September 2006 to March 2008, he recruited straw borrowers and assisted them in applying for loans to purchase residential property based on false information and fraudulent documentation with regard to employment, income, and/or assets, among other things. Bashi, who was mostly doing business as JP Land Development Inc., was responsible for completing the loan applications and gathering the necessary supporting documentation. Mortgages totaling almost $6 million were issued on 10 properties by various financial institutions. All of the loans resulted in foreclosure.
In addition, Bashi facilitated several individuals in obtaining other types of loans including vehicle, personal line of credit, and installment loans based on similarly false information. Loans totaling $480,000 were issued by area banks and credit unions, which were never paid back.
Under the terms the plea agreement, Mr. Bashi is facing a sentence ranging from 92 months to 115 months. A sentencing date will be set by the court. The case is being prosecuted by Assistant U.S. Attorney Frances Lee Carlson

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