OAKLAND, Calif. (CN) - Federal prosecutors unsealed an indictment against a former president of Discovery Sales, of Concord, Calif., accusing him of submitting $227 million in fraudulent mortgage applications to banks, $154 million of which went into foreclosure or short sales.
The United States of America sued Ayman Shadid, vice president of sales and then president of Discovery Sales Inc., which sold homes built by affiliated construction companies, including (nonparties) Discovery Builders and Albert D. Seeno Construction Co.
Prosecutors claim that Shadid defrauded banks from November 2006 through October 2008 by causing them "to make residential home mortgage loans to purchasers of homes sold by DSI based on false and misleading loan applications, and in amounts greater than the properties' true market value. The aggregate sales price of these properties was in excess of $227 million. As a result of the actions of Shadid and others working with him, mortgage loans having a value in excess of $154 million went into foreclosure or short sale proceedings."
Shadid is accused of bank fraud conspiracy and bank fraud. The United States seeks forfeiture of assets and other relief. The case was filed under seal on May 15 and unsealed by court order on Monday.