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Banks Loose Millions In Michigan Scam

Leader Of Mortgage Fraud Conspiracy Sentenced To 10 Years For Bank Fraud

Detroit, MI. -- (October 3, 2007) -- Safi Sobh, 34, of Dearborn, was sentenced to serve ten years in prison after being convicted by a jury of leading a mortgage fraud conspiracy that obtained inflated appraisals on residential properties, created false applications and obtained millions of dollars in bank loans, United States Attorney Stephen J. Murphy announced today.

Murphy was joined in the announcement by Andrew G. Arena, Special Agent In Charge of the Detroit Field Office of the Federal Bureau of Investigation.

Sobh was also ordered to pay restitution of $1,256,579, and to serve 3 years under the supervision of the Court upon his release from the custody of the Bureau of Prisons. The sentence was imposed by U.S. District Judge Patrick J. Duggan. Judge Duggan took the government's request for an order of forfeiture under advisement.

The evidence presented during trial established that between July 2002 and December 2005, Sobh led a large conspiracy that successfully corrupted the system of checks and balances lending institutions rely upon to determine how much money they can safely lend on a property, and whether a particular borrower is qualified to repay the loan. Ohio Savings Bank, Commercial Federal Bank and several other federally insured financial institutions relied upon the false representations of the conspirators and loaned millions of dollars, most of which has not been recovered. Working out of his realty, The Success Group, Sobh hand-picked and taught his co-conspirators how to commit these crimes. Eight indicted co-conspirators pleaded guilty to acting as corrupt loan originators, processors, appraisers, and straw buyers.

United States Attorney Stephen J. Murphy said, "Today's 10-year prison sentence of this mortgage fraud ring leader should leave no doubt that schemes undermining the integrity of the banking system will not go unpunished. The successful investigation of this highly complex and sophisticated fraud case, which culminated in a three-week jury trial, required a significant commitment of resources by the FBI and by the trial team from my office, and I commend them for their efforts." U.S. Attorney Murphy stated.

U.S. Attorney Murphy thanked the FBI for the successful investigation of the case, which was prosecuted by Assistant United States Attorneys Cynthia Oberg and Julie Beck.

SOURCE: Department of Justice - Eastern District of Michigan
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