Mother And Daughters Will Go To Jail For $16 Million Real Estate Scam

Photo: Orange County’s District Attorney’s Office

A California mother and her two daughters have been convicted of a $16 million mortgage fraud, reports Vik Jolly with the Orange County Register.Suniti Shah, 51, Supriti Soni, 52, conspired with their mother Sushama Devi Lohia, 74, and one of their husbands to rack up 15 fraudulent mortgages between 2006 and 2009, according to prosecutors.

They will serve up to 10 years.

To pull off the scam, prosecutors say the family asked people with good credit––called “straw buyers”––to take out  mortgage loans. To make the straw buyer’s credit more attractive, they falsified income and employer records on their loan applications. 

This is all part of a so-called “straw buyer” scheme, which is one of the most common mortgage scams and also pretty complicated. With help from the FBI, here’s the gist of it: 

-Once the loan is secured, the straw buyer recruits a victim (usually seniors) to “purchase” the property. 
-Once the victims have lived there for more than 60 days, the real estate agent and straw buyer work together to apply for a reverse mortgage on the victim’s behalf. 
-Then the victims are pressured to take out lump sump disbursements from the equity. 
-That cash never makes it to the victim’s hands and instead is divvied up between the straw buyer and real estate agent (or a settlement attorney in some cases).

Lohia pleaded guilty in December to almost 70 felony counts and was sentenced to eight years in prison. Shah and Soni were both sentenced this week to eight and 10 years in prison, respectively.

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