Simon Aouad, 35, pleaded guilty to charges of conspiracy, mail fraud and bank fraud in U.S. District Court in Philadelphia, according to a press release Monday from the U.S. attorney’s office in the Eastern District of Pennsylvania. He was ordered to pay $5.5 million in restitution and to forfeit $3.7 million in addition to his 70-month prison term.
Aouad participated in three separate fraud schemes along with co-conspirators, according to the release. In the first, he recruited buyers to purchase properties primarily located in North Wildwood, N.J., for inflated sale prices. The buyers took out loans to buy the properties by submitting false information about their income and assets and in turn received kickbacks “totaling tens of thousands of dollars,” according to the release.
In a similar plot, Aouad identified fake buyers to buy properties in Dorchester, Mass., from his co-conspirators at inflated prices, according to the release. They split the proceeds of the sales.
The borrowers in both plots defaulted on their mortgages, resulting in lender losses of more than $5 million, according to the release.
In the third scheme, Aouad identified borrowers willing to falsify information about their income and employment in order to take out lines of credit at Wachovia Bank, which merged with Wells Fargo in 2008. He received payments from a loan broker, Gerald Cathie, in exchange for his help, according to the release. Daniel Mumbower, a former loan officer at Wachovia, was also involved in the plot. The loans later went into default, costing Wachovia roughly $400,000, according to the release.
Mumbower pleaded guilty to his role in the bank fraud and North Wildwood schemes and was sentenced in March to 41 months in prison, a $2.7 million restitution and a $2.5 million forfeiture. Cathie was sentenced to 22 months in prison. The other conspirators in the North Wildwood scheme, John Lucidi Jr., Timothy Cook, Eric Maratea and Eric Itzi, have pleaded guilty for their roles in the plot and are scheduled for sentencing this summer, according to the U.S. attorney’s office.