MN Broker Indicted for Flipping in Straw buyer Scheme

The United States Attorney’s Office in Minnesota unsealed the federal indictment on December 10th in regard to two individuals who ran American Choice Lending, Inc in Minnetonka, Minnesota. The pair is accused of conducting a mortgage fraud scheme that resulted in losses to mortgage lenders in an amount over two million five hundred thousand dollars.

Zack Zafer Dyab, age 45 from Golden Valley, Minnesota was indicted with one count of conspiracy to commit wire fraud, six counts of mortgage fraud through interstate wire and one count of engaging in a monetary transaction involving criminally derived property.

Julia Alexander Rozhansky, age 45 from Minnetonka, Minnesota was indicted with one count of conspiracy to commit wire fraud, six counts of mortgage fraud through interstate wire and one count of engaging in monetary transaction involving criminally derived property.

The indictment alleges that the pair submitted thirty five mortgage loans to mortgage lenders from all over the Twin Cities area that were fraudulent. The defendants allegedly defrauded mortgage lenders throughout the United States and had various co-conspirators that were not named in the indictment. The co-conspirators are related to Julia Rozhansky.  The indictment states that during a period between 2003 and 2006 Mr. Dyab and Ms. Rozhansky recruited co-conspirators to act in the capacity of straw buyers to purchase thirty five single family homes in the Twin Cities area.

Mr. Dyab and Ms. Rozhansky prearranged for straw buyers to purchase homes at inflated values from Mr. Dyab or his company American Choice Lending, Inc. in some of the properties involved. The pair prearranged for straw buyers to purchase properties from third party sellers in other cases at inflated property values. The pair in relation to the third party sales required that the seller pay a portion of the sale proceeds to them. The pair also had a real estate broker receive proceeds from the sale as commissions and then had him sign over the proceeds to Mr. Dyab. The pair used the proceeds over the course of the mortgage fraud scheme for personal use.

The pair submitted fraudulent mortgage loan applications that contained false income, assets, liabilities, employment of the straw buyers involved in the case to further the scheme. The pair deposited funds into the straw buyers’ accounts to falsely inflate the accounts to ensure that mortgage lenders would approve the loan applications. They provided straw buyers with funds to bring to the settlement transaction and pass the funds off as their own funds for the down payment on the mortgage loan.  The applications for mortgage loan lead mortgage lenders to believe that the straw buyers were going to live in the properties as their primary residence. The reality was that the straw buyers intended to own the properties for less than one year and then resell the properties to third party straw buyers. The third party straw buyers would then let the properties go into foreclosure.

Mr. Dyab and Ms. Rozhansky will face a possible prison sentence of up to five years in federal prison in regard to the count of conspiracy, twenty years for each count of mortgage fraud and ten years on the monetary transaction count.  The sentence the pair could receive will be determined by a Federal District Court judge. The case is still under the investigation of the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation Division.

Assistant United States Attorney, David MacLaughlin will be prosecuting the case.

Mr. MacLaughlin reaffirmed that an indictment is merely an allegation that a crime has taken place and that the defendants are innocent until proven guilty in a court of law.