Zahid and Riffat Ali, who have been wanted by federal authorities on bank fraud charges since 1996, are fugitives no longer. They surrendered to agents of the FBI at San Francisco International Airport after their flight from Pakistan arrived, and they now have pleaded guilty in federal court in San Jose to bank fraud.
The Alis, husband and wife, were indicted by a federal grand jury in 1996 for bank fraud in violation of 18 U.S.C. § 1344. Before they could be arrested, they departed for their native Pakistan. Efforts to extradite them failed. Recently, in a deal worked out with prosecutors ahead of time, they agreed to voluntarily return.
According to the indictment, the Alis defrauded Home Savings of America of $438,866 by submitting a loan application that contained false statements and by submitting false back up documents in support of the application. They submitted the application in the name of a third party, or “straw borrower,” to a relative, Mujeebullah Mujahid Khan, who was a loan officer at Home Savings. Khan pleaded guilty to bank fraud in 1997.
Now, the Alis have pleaded guilty to bank fraud in front of the U.S. District Judge Lucy H. Koh in San Jose. Both defendants were released after they each posted $50,000 bail.
In pleading guilty, both defendants admitted that during the summer of 1994, they owned a residence in San Jose, California. Between approximately July 2, 1994 and September 9, 1994, they convinced a man who was living with them rent-free to apply for a loan to purchase the house from them. They admitted that they knew that his income and assets would not qualify him for a loan if the loan application had contained a truthful explanation of his circumstances. So, they filled out a draft of the loan application that contained several falsehoods, including the following:
- They falsely claimed that the man was earning $13,000 per month.
- They falsely claimed that he was employed by a company named Reffko, a company created by Mr. Ali.
- They also falsely claimed that the man had $85,000 worth of stock.
- Finally, in order to corroborate the man’s alleged income, they deposited $60,000 to $80,000 of their own funds into his bank account and falsely confirmed his employment and income when Home Savings called to verify his employment at Reffko.
The sentencing hearing is scheduled for March 26, 2014, before Judge Koh. The maximum statutory penalty for bank fraud, in violation of 18 U.S.C. § 1344, is 30 years in prison and a fine of $1 million, plus restitution.
Contact the author at email@example.com.
For more information about LexisNexis products and solutions connect with us through our corporate site.