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Oakland Federal Jury Indicts Man in Financial Crisis Loan Plot

Earlier this month, a federal grand jury in Oakland indicted Ayman Shahid, 38, of Danville, with conspiracy to commit bank fraud and 17 individual counts of bank fraud, alleging that he masterminded a scheme during the height of the financial crisis whereby banks approved home mortgage loans for unqualified buyers.

Shahid is said to have managed Discovery Sales, Inc., which handled home sales for associated construction companies, including Discovery Home Builders and Albert D. Seeno Construction Co.

He is alleged to have intentionally schemed to have appraisers and bank underwriters approve unqualified buyers for loans for homes that Discovery sold, to ensure that the company could keep selling homes through the crisis.

The U.S. Attorney’s Office for the Northern District of California says that the false qualification plan impacted homes with an aggregate sales price of almost $230 million, and that some $150 million in loans went into foreclosure or short sale proceedings.

Nine additional individuals who played different roles in the overall scheme have already been charged. Of those, seven have pleaded guilty, including two direct subordinates of Shahid, Carey Hendrickson, and Jason Sterlino. Jennifer Xiao is a fugitive.

In 2009, sources reported to the Federal Bureau of Investigation (FBI) that Discovery was paying undisclosed incentives to home buyers at the Discovery Builders development at Leona Quarry in Oakland.

Subsequently, the FBI searched the offices of Discovery Sales and affiliated companies in 2010.

If convicted, Shahid could face a maximum sentence of 30 years in prison and a fine of $1 million, plus restitution if appropriate, for each of the 18 violations alleged in the indictment.

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