A 29-year-old New London man was ordered to spend a decade in prison today for his role in a multimillion dollar mortgage fraud.
Syed A. Babar, also known as "Ali" and "Asad," pleaded guilty on Feb. 1 to one count of conspiracy, eight counts of wire fraud, one count of mail fraud, and four counts of making false statements to the government. United States District Judge Alvin W. Thompson sentenced him to 10 years in prison with three years of supervised release. Babar must also pay $4,749,024.76 in restitution to lenders defrauded in the scam.
“Mr. Babar earned this significant sentence by orchestrating a wide-ranging mortgage fraud scheme that led to millions of dollars in losses and left tens of abandoned houses in its wake,” U.S. Attorney David Fein said in a statement. “The U.S. Attorney’s Office, [Federal Bureau of Investigation], [Department of Housing and Urban Development - Office of the Inspector General] and the other participants in the Connecticut Mortgage Fraud Task Force are committed to investigating and prosecuting those who are responsible criminally for creating blight in our communities and contributing to our nation’s banking crisis.”
According to Fein's statement, Babar sought to obtain millions of dollars in residential real estate loans, including loans insured by the Federal Housing Administration, through a variety of fraudulent means. These included paying straw purchasers to enter into sales agreements on homes for more than the prices the seller would receive, submitting false documentation with false appraisals. A fake construction company was established to accept proceeds from the fraud and also used to inflate real estate prices by claiming renovations and improvements that never occurred.
Fein described Babar as the "de facto leader and organizer of the conspiracy," in which he and the straw purchasers split proceeds among themselves. He said the co-conspirators never occupied the homes as their primary residences and defaulted on the loans to let the properties go into foreclosure. The scheme was used on about 30 properties in the state, Fein said, and cost lenders approximately $4.75 million.
Babar has been imprisoned since May of 2010.
The case was investigated by the FBI and HUD-OIG and prosecuted by Assistant United States Attorneys Eric J. Glover, Susan Wines and Liam Brennan. The Connecticut Mortgage Fraud Task Force includes representatives from the U.S. Attorney’s Office, FBI, Internal Revenue Service – Criminal Investigation, U.S. Postal Inspection Service, HUD-OIG; Federal Deposit Insurance Corporation, Office of Inspector General, and State of Connecticut Department of Banking.