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Mortgage Broker Put Away for Loan Fraud

H. Beach Man Targeted Troubled Owners

A Howard Beach man who formerly owned a mortgage modification business was sent to federal prison last Wednesday, Mar. 19, for defrauding distressed homeowners and lenders, it was announced.

Isaak Khafizov, 27, was ordered by U.S. District Judge George B. Daniels to serve nine years behind bars in connection with the scam. Khafizov was convicted in May 2012 of one count of conspiracy to commit mail and wire fraud, one count of mail fraud, and two counts of wire fraud after a 10-day jury trial presided over by Judge Daniels.

“Isaak Khafizov victimized desperate homeowners who were struggling to make their mortgage payments. He preyed on their fears of losing their homes by lying about miracle cures for their financial problems,” said U.S. Attorney for the Southern District of New York Preet Bharara. “Khafizov pretended it was all made possible by government programs that did not exist, by special, powerful relationships with banks that he did not have, and by expertise and experience that he never possessed.”

According to the charges, in the spring of 2008, Khafizov, Jaime Cassuto and David Cassuto founded American Home Recovery (AHR), a mortgage modification business that operated in Manhattan.

From the spring of 2008 through the summer of 2009, Khafizov used AHR to commit a systematic fraud that preyed on distressed homeowners. Khafizov and AHR’s salespeople fraudulently induced distressed homeowners all over the United States to pay AHR thousands of dollars in up-front fees.

Reportedly, the company falsely promising the homeowners that AHR could get them better interest rates and lower monthly fees, all within a short timeframe; AHR would return the up-front fees if it did not succeed in getting the homeowners the mortgage modifications they desired; the homeowners had been “preapproved” for mortgage modifications by their lenders; AHR was affiliated with government agencies and programs established by the Economic Stimulus Act of 2008; AHR possessed special expertise in mortgage modifications, and AHR had special relationships with lenders.

After receiving up-front fees from the distressed homeowners, Khafizov and AHR did little or no work to try to renegotiate the homeowners’ mortgages. On those rare occasions when Khafizov succeeded in getting a homeowner a mortgage modification, it was noted, he typically did so by coaching the homeowner to lie about his or her income and assets on forms submitted to the mortgage lender.

All told, Khafizov and AHR defrauded financially struggling customers across the country out of over half a million dollars in fees. Furthermore, because Khafizov and AHR did not do the work they had promised, and because Khafizov specifically directed the distressed homeowners to stop paying their mortgages and to pay AHR its fees instead, many of AHR’s customers wound up in foreclosure as a result of the scheme.

In sentencing Khafizov, Judge Daniels remarked that victims who feared “being thrown out of their homes” were “desperately seeking help” from Khafizov because he “promised to solve what, for most of these people, was the most serious problem that they had ever encountered in their lives.” But Khafizov “took advantage of every one” of them, and “hellip; showed a callous disregard for the consequences of his criminal conduct on the victims he swindled.”

Jaime Cassuto and David Cassuto each pled guilty to multiple counts of fraud in April 2012. They await sentencing.

Bharara praised the Federal Bureau of Investigation and the Special Inspector General of the Troubled Asset Relief Program for their work on this case.

This case is being prosecuted by the Office’s Complex Frauds Unit. Assistant U.S. Attorneys Niketh Velamoor and Nicole Friedlander are in charge of this prosecution.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Bharara serves as a co-chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.

With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.

For more information on the task force, please visit www.StopFraud.gov.

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